Salary Cap? | Page 7 | Vital Football

Salary Cap?

"Payments directly linked to a Club’s progression in cup competitions or promotion are excluded from the Cap."

So does that mean a club can actually offer a player £2,000 per week plus a bonus of £50,000 for reaching the FA Cup second round? Or a bonus of £250,000 for winning promotion?
 
nlondonimp said:
would actual profit levels be a safer gauge though, rather that potential profit? as newcastle have found out, possible/imminent takeovers don't always happen.
re: your thoughts on turnover - it is only a good gauge of squad spending power if all other club admin costs are under control, imo. as an example sunderland's basic setup costs a lot more to run than accrington's.
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Absolutely, which is why I think these rules need to be more clearly defined.
 
Although an across the board salary cap has its faults (as any system does in all honesty), there needed to be a something imposed to try and ensure that the 72 EFL clubs continue to exist so I am pleased that it has been introduced. Yes it would almost certainly mean that should we get into the Championship, that visit may be only 12 months long, but a cap was needed, and to have a one rule for all system is far easier to police than have a system based upon each clubs individual income/expenditure
 
Scotimp said:
"Payments directly linked to a Club’s progression in cup competitions or promotion are excluded from the Cap."

So does that mean a club can actually offer a player £2,000 per week plus a bonus of £50,000 for reaching the FA Cup second round? Or a bonus of £250,000 for winning promotion?
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Promotion bonuses will be included in contract discussions as would cup success, though any club offering a bonus for winning one game are dicing with financial death I would suggest. But that's akin to a performance/results based contract which exists in many facets of industry and the workplace. Pretty sure I'd rather a player earn a bonus for success than just be happy to take the money for doing relatively little
 
sedgleyimp said:
Promotion bonuses will be included in contract discussions as would cup success, though any club offering a bonus for winning one game are dicing with financial death I would suggest. But that's akin to a performance/results based contract which exists in many facets of industry and the workplace. Pretty sure I'd rather a player earn a bonus for success than just be happy to take the money for doing relatively little
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But will that encourage clubs to offer more than they can afford in bonuses?
 
Scotimp said:
But will that encourage clubs to offer more than they can afford in bonuses?
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Some clubs who run themselves very much by the seat of their pants yes very probably. You've still got the caveat of a financial boost for the following season if promotion bonuses are paid out by virtue of that promotion. If you don't go up, bonuses are not paid.
It's imperfect agreed, but required in some form and as I mentioned earlier easier for the EFL to monitor if it's a one rule for all. They really couldn't cope with the management of it if they imposed different limits for different clubs in the same division and would also open themselves up to accusations of favouritism.
 
Apparently, the Championship clubs are set to vote against a salary cap. That really would create a chasm between the second and third tiers.
 
As far as I can establish, the dissenters were Portsmouth, Sunderland, Oxford, Plymouth and Ipswich; presumably the other two were Hull and Charlton?

Perhaps the abstention came from Peterborough: Darragh MacAnthony said he was in favour of a salary cap, but he was strongly in favour of it being linked to turnover. He even compiled a report on the subject and sent it to the EFL.
 
Scotimp said:
The obscene and bloated world of football is located in the Premier League, not Leagues One and Two.

I am all for salary caps, but not in this format. This makes no sense for Sunderland, Ipswich, Portsmouth and a few others, who will be making large sums of money on the gate but cannot use it. It means that Sunderland with an average gate of 31,000 can only spend the same on players as Accrington with an average gate of 2,800. So Sunderland can take £9 million per season on the gate alone, but can only allocate £2.5 million to their playing squad. That may benefit the likes of Lincoln, but it is far from being fair. Sunderland will be a rich football club with a poor football team. If they have a poor football team, the only outcome is falling gates and stagnation.

And what about the likes of Oxford, who have developed younger players - which is exactly what the football authorities want clubs to do - and sold them on for millions? They are only permitted to spend £2.5 million on wages too, so what do they do with the surplus they have generated through running their club in the right way? Where is the incentive for continuing with that trading model if it does not benefit the club and allow it to advance?

There is an inherent flaw with this, and it is a serious one: it really ought to be a figure linked to turnover, not a flat number. That is the only way to make clubs live within their means.

Furthermore, I reckon the cap will not affect 15 of the clubs in League One because they were not spending £2.5 million anyway. Therefore, I am struggling to see which clubs' finances this is designed to correct. It appears almost irrelevant to the majority, and punitive to a small number.

Will the better players be less willing to drop down to League One if the average wage is 'only' £2,400 per week, or to League Two where the average would be £1,450? Does that mean that the overall standard of football in the lower divisions will drop?

Looking a bit further ahead, what happens to a club promoted from League One (with a salary cap of £2.5 million) to the Championship where the cap could be £18 million? It makes it almost impossible for the promoted clubs to compete at the higher level, which means more promoted clubs will be relegated straight back to League One. What is created therefore, is an ersatz Premier League 2. Is that actually the intention?

I am thinking aloud with this, but my head is full of questions.
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Phil, we could debate this for hours but here are some quick points.

The squad salary caps that were voted in are a long way from perfection and there are a few clauses that we are not happy with. However, it's a massive improvement on SCMP which is just not fit for purpose.

You mentioned Oxford and what they might be able to do with any surplus they generate. They incurred a loss of £4.3million in their last published accounts and have net current liabilities of £16.5million. So in addition to reducing losses and paying off debt they still have the ability to pay higher transfer fees, pay more for their manager and backroom staff, improve facilities or build a war chest that can enable them to be more competitive if they get to the Championship.

The average player expenditure in L1 over the last 3 years was way over the new limit of £2.5million with on average 16 clubs exceeding this new limit each season over that period.

You already have a massive gap between the Championship and L1. Charlton are coming straight back down, so would have Barnsley if not for Wigan and Luton just survived. The only way to reduce the gaps between the divisions is a complete revamp of the distributions across the pyramid but I wouldn't hold my breath waiting for that.
 
nlondonimp said:
"Clubs will be fined or face further sanctions if they exceed the spending limits.".
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There is an interesting question - if a club like Sunderland has a cash surplus of x and the 'fine' for breaking the quota is y then if x > y+additional salary spend why shouldn't Sunderland break the rules, take the fine and use their resources anyway. They would still be operating a sensible financial model (all other things being equal).

No penalty points? No adverse consequences for breaking the rules?

What is the point of the rules? What are they trying to achieve?
 
I think its a good idea extra revenue can keep facilities for all clubs up to scatch also help academies prosper and maybe help the ones who have let academies go ramp up a bit. Non league will have to follow suit ?
 
I think we must see the cap as an interim measure. Sunderland won't be getting 30,000 crowds in the foreseeable future. If spectators return, it will give them an opportunity to reduce their current debts.

I doubt next season (if things are back to "normal") that the cap (if it still applies) will remain at £2.5m.
 
We appear to be moving from a position of clubs asking ‘where are we going to get the money to pay the bills’ to one of ‘what are we going to do with our surplus profits’. Surely this means that football finances are heading in the right direction.
 
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