General New EFL rule - Clubs have to make a profit

[Steve Gilbert]

No

All clubs receive the same amount of money from the EFL no matter where they end up in the league. So even winning the league doesn’t get you any extra money other than an increase in TV revenue and higher PL payment.

 

[tonyw]

The wage cap will punish us ‘lower downs’ because it isn’t about proportionate losses or how caps are proportionately different in this league versus that one. If a club comes down from the Championship with a wage bill 5/6 times the size of the maximum wage bill we are allowed to have, they might not be allowed to spend any more money but they will be allowed to keep what they’ve got in terms of those under contract. They can’t just pop the balloon overnight and demand people go from 15m per season to 2.5m, so they will be allowed to keep players who are contracted who want to stay. This gives an enormous advantage to the teams coming down because now we are starting from much further behind. As it stands a team can already come down with a 15m-odd budget, but plenty of teams at this level are already operating at 4, 5, 6m. Under the new rules, we won’t be as competitive versus what they are allowed to carry with them. We will be made to take two steps back from where we usually are when the race begins.

Except a bunch of teams are coming down into League One with much, much higher budgets than that. Remember, the average Championship wage bill is currently 34m.

When Sunderland came down, they were operating on a wage bill the previous season of 47m.
It's a tribute to how badly that money was wasted that they still couldn't get promoted with that squad, even after having to do some trimming.

The like of Blackburn, Bolton (the first time), Wigan all came down with wage bills that were bigger than the cap that's potentially about to be imposed. Hence the fact that they all bounced straight back up - they were all operating at a massive financial advantage to the rest of the division. We are already two steps behind most of the teams that have come down from the Championship when the race begins! That's why there's been so much yo-yoing recently.

I'll say it again, the proposed wage cap is not creating a massive financial gap between League One and Championship. That gap is already there. The worst it is doing is formalising the gap.

 

[Fred]

Except a bunch of teams are coming down into League One with much, much higher budgets than that. Remember, the average Championship wage bill is currently 34m.

When Sunderland came down, they were operating on a wage bill the previous season of 47m.
It's a tribute to how badly that money was wasted that they still couldn't get promoted with that squad, even after having to do some trimming.

The like of Blackburn, Bolton (the first time), Wigan all came down with wage bills that were bigger than the cap that's potentially about to be imposed. Hence the fact that they all bounced straight back up - they were all operating at a massive financial advantage to the rest of the division. We are already two steps behind most of the teams that have come down from the Championship when the race begins! That's why there's been so much yo-yoing recently.

I'll say it again, the proposed wage cap is not creating a massive financial gap between League One and Championship. That gap is already there. The worst it is doing is formalising the gap.

It is quite staggering how bad some clubs are run! I big playing budgets don't always equal success!

 

[Fred]

I assumed you did

So there is no advantage finishing 11th instead of 12th?

 

[bazzer9461]

All clubs receive the same amount of money from the EFL no matter where they end up in the league. So even winning the league doesn’t get you any extra money other than an increase in TV revenue and higher PL payment.

I know but was answering @Fred question do clubs get money for where they finish in the league.

 

[West Oxon U’s]

https://twitter.com/x/status/1291049486555533313

 

[tonyw]

I was trying to crunch the numbers in my head to work out if this is going to pass for League One.

It needs a 2/3 majority so if nine clubs or more vote against then it will fail.

Portsmouth, Sunderland, Ipswich, Hull, Peterborough, Wigan, & Charlton would presumably all be against as they can all run sustainably with a budget bigger than 2.5m (or, in the case of Posh, are just angry and want to throw money at their revenge season). So that's 7.

Then MK Dons? Doncaster? Plymouth? Would only take one of those clubs to turn down these proposals as being too limiting for us to have the deciding vote!

Then I presume that Tiger would vote against it? Wouldn't he?

Strikes me that it's more likely to pass in League Two. There's not many big clubs left down there.

 

[Fred]

As Oxford Fans what do we think? I trust Tiger, but do Clubs need a restriction? Is this the method being proposed because it is easy to monitor? Shouldn't it be linked to turnover? Although that helps bigger supported clubs.

 

[tonyw]

As Oxford Fans what do we think? I trust Tiger, but do Clubs need a restriction? Is this the method being proposed because it is easy to monitor? Shouldn't it be linked to turnover? Although that helps bigger supported clubs.

I mean I'm sure that's the case.

They've tried FFP regulations based around turnover, and it's been an epic disaster that's not really changed behaviors other than encouraging a bunch of teams to get creative with their accounting (too creative in the case of Wednesday).

The benefit of a flat cap is that it's simple to apply and police.

And yeah, I think something is necessary - although probably even more at the Championship level than in the lower leagues. You look at the way that a bunch of Championship clubs are behaving in pursuit of the Premier League and it's absolutely insane. I find it impossible to believe that there won't be more Portsmouths/Boltons in the years to come unless something changes.

 

[Fred]

I mean I'm sure that's the case.

They've tried FFP regulations based around turnover, and it's been an epic disaster that's not really changed behaviors other than encouraging a bunch of teams to get creative with their accounting (too creative in the case of Wednesday).

The benefit of a flat cap is that it's simple to apply and police.

And yeah, I think something is necessary - although probably even more at the Championship level than in the lower leagues. You look at the way that a bunch of Championship clubs are behaving in pursuit of the Premier League and it's absolutely insane. I find it impossible to believe that there won't be more Portsmouths/Boltons in the years to come unless something changes.

I suppose a wage cap can still be abused though? Agents will be losing money as well?

 

[Fred]

Once a wage cap is implemented it should encourage ambitious well supported clubs to spend money on club infrastructure and youth etc

 

[RyanioBirdio]

Once a wage cap is implemented it should encourage ambitious well supported clubs to spend money on club infrastructure and youth etc

How long until other areas are rife with overspending as clubs hunt for any edge or advantage they can get? At what point does that 150k a year that a club wasn’t allowed to spend on an extra player turn into 350k extra being spent on scouting, or 250k extra on additional specialist coaches? Sure, people could say that it’s better to spend money on developing players with extra coaches or on scouting more kids etc, but it’s still ‘overspending’. And none of it matters anyway if you can’t get players into that first team budget at the end of it. If a club wants to spend a small fee on securing a Dickie, or a Brannagan, or a Sykes in January, knowing full well that within 2/3 years they will be sold for ten times that amount, is that really helping clubs survive? Would it be in the best interests of a club for the league to tell them they can’t spend 50k and a grand a week in wages on a diamond who might well net them a couple of million quid in 18 months time, even though they can take that money plus 50% and spend it on some new changing rooms? Or is it going to end up helping the teams higher up who have six times the budget, and can get around any potential limits on squad sizes by classifying them as an Under 23?

Rules will always be prodded and squeezed as people try to wriggle around them and stretch them to their limits. That’s just life and requires as stringent policing as possible from the relevant authorities - that’s what they’re paid for. What any sort of black and white, flat rate does is make it require less management in principle, but creates a whole wealth of problems and disadvantages down the line and in other areas, away from the first team payslips. I really don’t trust the EFL to consider or be bothered with thinking about or safeguarding any of these things. I think they just want a flatpack solution that allows them to wash their hands, first and foremost.

It’s an extremely complex issue that requires an even more rigorous and meticulous solution. What you don’t want is to shove through an ‘over ready’ piece of legislation that it turns out nobody understood or even read properly a few months down the line.

 

[werthersoriginal]

If it does get voted in are the amounts fixed, or will they be tweaked every season without a vote? I’d expect the latter.

 

[Fred]

How long until other areas are rife with overspending as clubs hunt for any edge or advantage they can get? At what point does that 150k a year that a club wasn’t allowed to spend on an extra player turn into 350k extra being spent on scouting, or 250k extra on additional specialist coaches? Sure, people could say that it’s better to spend money on developing players with extra coaches or on scouting more kids etc, but it’s still ‘overspending’. And none of it matters anyway if you can’t get players into that first team budget at the end of it. If a club wants to spend a small fee on securing a Dickie, or a Brannagan, or a Sykes in January, knowing full well that within 2/3 years they will be sold for ten times that amount, is that really helping clubs survive? Would it be in the best interests of a club for the league to tell them they can’t spend 50k and a grand a week in wages on a diamond who might well net them a couple of million quid in 18 months time, even though they can take that money plus 50% and spend it on some new changing rooms? Or is it going to end up helping the teams higher up who have six times the budget, and can get around any potential limits on squad sizes by classifying them as an Under 23?

Rules will always be prodded and squeezed as people try to wriggle around them and stretch them to their limits. That’s just life and requires as stringent policing as possible from the relevant authorities - that’s what they’re paid for. What any sort of black and white, flat rate does is make it require less management in principle, but creates a whole wealth of problems and disadvantages down the line and in other areas, away from the first team payslips. I really don’t trust the EFL to consider or be bothered with thinking about or safeguarding any of these things. I think they just want a flatpack solution that allows them to wash their hands, first and foremost.

It’s an extremely complex issue that requires an even more rigorous and meticulous solution. What you don’t want is to shove through an ‘over ready’ piece of legislation that it turns out nobody understood or even read properly a few months down the line.

I understand Liverpool have a throw in coach! That's a bit extreme.

 

[tonyw]

Just as an addendum to my previous post - it actually seems as if I was wrong, and Peterborough will be voting for the wage cap (even though their chairman thinks it's a dumb and unfair idea......because it will benefit them compared to the biggest clubs in League One). But Plymouth have come out publicly against it.

So it's likely still seven votes squarely in the no column (Portsmouth, Sunderland, Ipswich, Hull, Plymouth, Wigan, & Charlton). Plus Us? Then we'll have to wait and see.....Doncaster have been making negative noises about it, but at the last interview hadn't made their minds up.

 

[warksox]

Just as an addendum to my previous post - it actually seems as if I was wrong, and Peterborough will be voting for the wage cap (even though their chairman thinks it's a dumb and unfair idea......because it will benefit them compared to the biggest clubs in League One). But Plymouth have come out publicly against it.

So it's likely still seven votes squarely in the no column (Portsmouth, Sunderland, Ipswich, Hull, Plymouth, Wigan, & Charlton). Plus Us? Then we'll have to wait and see.....Doncaster have been making negative noises about it, but at the last interview hadn't made their minds up.

If we include Tigers recent comments on RadOx, I think there are only 5 clubs who have stated publicly they are against the cap:
Oxford, Portsmouth, Sunderland, Ipswich and Plymouth Argyle.
I agree that Hull and Charlton will also likely vote against.
Wigan are not so straightforward - their vote will be cast by an administrator who is talking about the urgent need to slash their wage bill. He may think it easier to find a buyer for the club if a salary cap is already in place.
All the other clubs I've seen who've made their views known, including Peterborough, have come out in favour.
So maybe only 7 votes against, in which case it will pass, unless Doncaster and one other can be persuaded to abstain.

 

[Marked Ox]

If we include Tigers recent comments on RadOx, I think there are only 5 clubs who have stated publicly they are against the cap:
Oxford, Portsmouth, Sunderland, Ipswich and Plymouth Argyle.
I agree that Hull and Charlton will also likely vote against.
Wigan are not so straightforward - their vote will be cast by an administrator who is talking about the urgent need to slash their wage bill. He may think it easier to find a buyer for the club if a salary cap is already in place.
All the other clubs I've seen who've made their views known, including Peterborough, have come out in favour.
So maybe only 7 votes against, in which case it will pass, unless Doncaster and one other can be persuaded to abstain.

The Wigan administrator might find the cap a hindrance to a buyer as buyers might be put off by such stringent limits affecting future opportunity. One that can go either way so interesting in a dispassionate way.

 

[warksox]

The Wigan administrator might find the cap a hindrance to a buyer as buyers might be put off by such stringent limits affecting future opportunity. One that can go either way so interesting in a dispassionate way.

I think it may well put off the mega-rich foreign investors who want a sh*t or bust punt at returning Wigan to the PL.
Equally, it may attract more local or UK investors of more limited resources like, say, Darryl Eales who would probably offer a more sustainable future for the club.
After the last ownership fiasco, and with Lisa Nandy watching his every move, I suspect the administrator would rather go with the second option.

 

[tonyw]

The season that Wigan won League One, they had revenues of 9.3m.
OK, that was augmented by a good cup run but still - they can easily sustain a wage budget well in excess of 2.5m. It would be crazy for an administrator - or any future owner - to support a wage cap that arbitrarily removed their competitive advantage at this level. If they were talking about capping wages at 5m, maybe. But 2.5m - way too low for a club like Wigan.

By the way, their wage bill that season? 13.6m! No wonder they won the league and gave us a good shoeing with that sort of financial advantage!

 

[warksox]

The season that Wigan won League One, they had revenues of 9.3m.
OK, that was augmented by a good cup run but still - they can easily sustain a wage budget well in excess of 2.5m. It would be crazy for an administrator - or any future owner - to support a wage cap that arbitrarily removed their competitive advantage at this level. If they were talking about capping wages at 5m, maybe. But 2.5m - way too low for a club like Wigan.

By the way, their wage bill that season? 13.6m! No wonder they won the league and gave us a good shoeing with that sort of financial advantage!

The Wigan Athletic you are referring to is gone.
The Wigan that comes out of administration, if a buyer is found, will be a shadow of the previous club.
Listen to what is coming from their administrator (strangely, remarkably similar to what the Bolton administrator was saying a year ago):
-They have debtors owed £millions.
-They have a huge wage bill that urgently needs paring (= fire sale of 1st team squad).
-Their ground sponsor (DW Sports) is also now in administration. (= more lost revenue).
-Unlikely any buyer in place before next season starts (= no buyer in talks).
So they start next season still in administration having sold any player they had that was worth anything, and unable to sign anyone other than frees and loans.
Chances of a quick return to the Championship = nil.
Chances of another unknown rich overseas 'punter' taking over is less likely after the last fiasco and given the scrutiny of the local MP.
I think all this points to a more modest investor where a salary cap might appeal.