Salary Cap? | Page 8 | Vital Football

Salary Cap?

How will the championship clubs implement cuts from Championship to league 1 ?Will have to work contracts so upon relegation contracts are null and void automatically

will the salary cap incude all pro contract players including 1st 2nd year pros etc loans etc

Not sure why the pfa are against it surely they are better off with more players playing then losing many due to clubs inability to survive ?
 
I don't think the PFA are completely against it. If you look at the link on post #94 you will see that their major issues were absence of consultation and a poorly thought through implementation.
 
imps1 said:
It will be interesting to hear more from Clive and Liam about this.

I know Liam has often given updates on Radio Lincs on Saturdays afternoon but now it has passed and hopefully all the details are know it will be good to hear how important this was for our club.
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Liam's on Radio Lincs this afternoon but I'm sure Hortin will put it in the podcast later.
 
SAToffeeImp said:
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.
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Thanks as ever for your engagement, Clive, your contributions are much appreciated.

I understand the position at Oxford, and how badly run they have been, but their transfer dealings during the current financial year will return a profit for the last two years. Perhaps that means the model is bearing fruit after years of mismanagement? Or have they just been lucky? I presume the model we are following is the same ideal with less expenditure?

It would be interesting to see the actual figures: how many of those 16 clubs are overspending by a great deal? I am actually surprised to learn that.

My basic concern remains: the hard cap instead of a link to revenue. How difficult would it have been to give 'revenue' a fixed definition and use that instead? I cannot see how a level playing field can be created where clubs are not permitted to use income they have generated through legitimate means.
 
Scotimp said:
Thanks as ever for your engagement, Clive, your contributions are much appreciated.

I understand the position at Oxford, and how badly run they have been, but their transfer dealings during the current financial year will return a profit for the last two years. Perhaps that means the model is bearing fruit after years of mismanagement? Or have they just been lucky? I presume the model we are following is the same ideal with less expenditure?

It would be interesting to see the actual figures: how many of those 16 clubs are overspending by a great deal? I am actually surprised to learn that.

My basic concern remains: the hard cap instead of a link to revenue. How difficult would it have been to give 'revenue' a fixed definition and use that instead? I cannot see how a level playing field can be created where clubs are not permitted to use income they have generated through legitimate means.
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Suspect the rent deal for the Kassam is what is killing them, not something we have to deal with.

https://www.oxfordmail.co.uk/news/4788111.kassam-stadium-rent-deal-stifles-united/
 
Scotimp said:
Thanks as ever for your engagement, Clive, your contributions are much appreciated.

I understand the position at Oxford, and how badly run they have been, but their transfer dealings during the current financial year will return a profit for the last two years. Perhaps that means the model is bearing fruit after years of mismanagement? Or have they just been lucky? I presume the model we are following is the same ideal with less expenditure?

It would be interesting to see the actual figures: how many of those 16 clubs are overspending by a great deal? I am actually surprised to learn that.

My basic concern remains: the hard cap instead of a link to revenue. How difficult would it have been to give 'revenue' a fixed definition and use that instead? I cannot see how a level playing field can be created where clubs are not permitted to use income they have generated through legitimate means.
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There would be similarities with their model but very different in terms of expenditure. Even pre-Covid there is no way we could fund a loss anywhere close to £4.3m.

On average the top 13 would be above £3m, top 5 above £4m and the top team would be above £10m. There have been figures produced of losses incurred by clubs but these have not been adjusted for the benefits of tax losses and also contain inflated sponsorship and commercial income and donations from owners which are difficult in many cases to quantify. I can't get away from what I have done for the last 40 years so often look at the published accounts of clubs. Below is the profits/(losses) from the accounts of various clubs I monitor from their last published accounts in L1.

Charlton (10.4m)
Wigan (7.7m)
Fleetwood (6.0m)
MK Dons (4.5m)
Oxford (4.3m)
Bristol Rovers (3.3m)
Scunthorpe (3.1m)
Northampton (2.0m)
Doncaster (1.8m)
Peterborough (1.4m)
Rochdale (1.2m)
Rotherham (0.5m)
Walsall - break even
Shrewsbury 2.3m after 3.8m in profits from player sales

They clearly illustrate an unsustainable future especially as most of those losses are funded from increasing loans from owners.

It could be linked to revenue but you would have grey areas like the true value of sponsorship and commercial income from owners or connected parties. You only have to look at Manchester City and Everton in the Premier League for examples of how that could be problematic. Revenue figures could also only be verified retrospectively.

Using a turnover figure would undoubtedly benefit the top third of clubs but would prejudice the majority of clubs and have the effect of driving player costs higher across the division.

As I said the regulations are not perfect but I believe they are a start to a more sustainable and possibly more competitive future within each division. Much more however needs to be done to ensure the sustainability of clubs.
 
I assume the salary caps include related add-ons such as Employers NI and ER pension contributions.
 
buckielugger said:
But does not include any monies accidentally deposited in brown envelopes by a certain Mr Evans.
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Which of course is the perpetual challenge of establishing and maintaining any fair system whether its FFP or salary cap.

Some will always try to exploit or cheat the system. No doubt some owners and clubs will be looking at how the cap can be circumvented.

If it is based on turnover, that will be open season on massaging of figures, over-repirting of attendances etc.

I can well understand where Clive us coming from on this.
 
Would be interesting to see the contract lengths remaining on the high earners from the so called big clubs of Sunderland, Portsmouth and Ipswich and anyone else who is paying 3k a week to players if thats where the wage limit is set.
If the likes of them dont get back to the Championship this season and those contracts run out theres no way they will be hanging on to the to those prized assets the following season.
 
Luke Imp said:
A breakdown here with key points.

https://www.doncasterfreepress.co.u...fect-clubs-including-doncaster-rovers-2936369
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Really good article, explains things well.
And looks like the rules put in place ought to be fairly workable.
Clubs are still free to spend more if that's their choice but will have to pay a fine accordingly, distributed amongst the clubs who keep within the limit. So Sunderland can still make use of their much bigger income but the more they go over the cap, the more it will cost them to do so. A good little rule.

And existing bigger contracts are dealt with sensibly. Doubtless most players at clubs relegated from Championship will be on more (and often considerably more) than the £3k average, so seems sensible to treat any such players as receiving that notional average until their existing contracts have run out.

Only thing not specified it would seem is what the bigger punishment would be for clubs who totally take the piss, it just says they'll be referred for further disciplinary action. It ought to say they will be demoted without question and rule out any of these silly "independent panels".
 
Spilsby52 said:
Build a 4th side to their ground ;)
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Oxford are at loggerheads with the owner of their ground (their former owner). At one point Oxford were only allowed into their ground on a part-time basis without paying extra on an ad-hoc basis.

https://www.oxfordmail.co.uk/news/16898218.kassam-says-relations-oxford-united-all-time-low/

https://www.oufc.co.uk/news/2019/april/firoka-statement/

The club are being ripped off and there's not much they can do about it.

It does appear that relations between landlord and club are improving, but there is still a whole lot of tension bubbling underneath - especially amongst the fans. Apparently the club are actively seeking alternative sites for a stadium.

https://www.oxfordmail.co.uk/sport/...dium-session-symbolic-improving-links-firoka/

So I don't think the Kassam Stadium will be receiving a 4th side any time soon...
 
markhonesmagicstuds said:
Oxford are at loggerheads with the owner of their ground (their former owner). At one point Oxford were only allowed into their ground on a part-time basis without paying extra on an ad-hoc basis.

https://www.oxfordmail.co.uk/news/16898218.kassam-says-relations-oxford-united-all-time-low/

https://www.oufc.co.uk/news/2019/april/firoka-statement/

The club are being ripped off and there's not much they can do about it.

It does appear that relations between landlord and club are improving, but there is still a whole lot of tension bubbling underneath - especially amongst the fans. Apparently the club are actively seeking alternative sites for a stadium.

https://www.oxfordmail.co.uk/sport/...dium-session-symbolic-improving-links-firoka/

So I don't think the Kassam Stadium will be receiving a 4th side any time soon...
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Be careful who owns your ground!
 
One bit I am struggling with, which not seen covered; transfer fees - can they be reinvested?

Peterborough seems obvious example. Say they sell Toney for £5 million. Can they use that money on top of the wage cap? If not, it massively reduces the temptation to sell surely?
 
clanfordimp said:
Would be interesting to see the contract lengths remaining on the high earners from the so called big clubs of Sunderland, Portsmouth and Ipswich and anyone else who is paying 3k a week to players if thats where the wage limit is set.
If the likes of them dont get back to the Championship this season and those contracts run out theres no way they will be hanging on to the to those prized assets the following season.
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Only if they are over 24. If they aren't, presuming i'm reading it correctly, they can be paid anything and it will only count as the capped level.

I wonder how it deals with player/coaches? Does it count the whole wage as a player?
 
My reading is that transfer fees are not part of the Salary Cap. That said, the general feeling is that L1 and L2 clubs are unlikely to spend much on transfers this season because of uncertainty over Coronavirus and income.

I suppose the there is an issue if Sunderland want to spend a couple of million on a new player, but if they do, whatever they pay that player will come out of the Salary Cap budget.
 
Gaz_Imp said:
One bit I am struggling with, which not seen covered; transfer fees - can they be reinvested?

Peterborough seems obvious example. Say they sell Toney for £5 million. Can they use that money on top of the wage cap? If not, it massively reduces the temptation to sell surely?
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My understanding is you can use it to buy new players... but not pay their wages.
It’s not a transfer cap, it’s a salary cap.

The motives for selling a player could be

Plug the hole in your bank balance
Improve your squad generally - buy three good players by losing one
Improve facilities etc
Let an ambitious player go for a good fee before he feels you are holding him back.

They will all still be available. The difficulty will be tempting a replacement to move sideways or down the pyramid without paying them more than they are on now.

But that is to some extent the whole point of the salary cap. Previously some clubs have paid massive wages and driven the whole wages structure to unsustainable levels for too many clubs.
 
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