General New EFL rule - Clubs have to make a profit

The relegation from Championship issue is what makes this flat cap so unworkable. Absolutely no way a team can cut its wage bill from the Championship enough in one summer to comply, so those teams have to be given special dispensation - which immediately undermines the whole point of a league-wide wage bill. You can say ‘just get players to sign a relegation wage reduction clause in their contract’, but good luck trying to get anyone signing any kind of employment contract with such a clause. Championship wage gap looks likely to be set at 18m (if it gets passed). League 1’s will be 2.5m. That’s about 7 times higher. Assuming your relegation clause looks to reduce the players’ wages in line with the league limits, you’re basically asking a player to agree to about an 85% wage drop. What person in their right mind is going to agree to that?!

I also don’t understand what ‘any signing completed before the vote takes place will contribute to the league average’ means in practice. Would be grateful if someone could explain. Why does the league average make any difference when there’s an established flat cap?

My biggest issue with this whole thing is that it’s completely rushed and hasn’t really been called for at all. The argument that it will help clubs deal with the economic fallout of covid is totally disingenuous, surely - clubs outgoings will still be more or less the same in the short term, and it’s the short term loss of revenue that covid has caused. Who, even three or four months ago, was calling for a league-wide salary cap? Would a salary cap actually protect against the most flagrant abuses of football club ownership that we have seen recently, like with Wigan?

Finally, I would also like fans to be given a say in this, as they stand to gain or lose the most from this vote. We have not even been explained in detail what the terms of this plan are, let alone been given a chance to voice concerns and have an impact on the final decision. All we’ve had are confused sound bites from managers and journalists that leave a lot of questions unanswered. It seems mad that a decision of such monumental significance to clubs in the football league hasn’t even been properly explained to supporters of those clubs.
 
The relegation from Championship issue is what makes this flat cap so unworkable. Absolutely no way a team can cut its wage bill from the Championship enough in one summer to comply, so those teams have to be given special dispensation - which immediately undermines the whole point of a league-wide wage bill. You can say ‘just get players to sign a relegation wage reduction clause in their contract’, but good luck trying to get anyone signing any kind of employment contract with such a clause. Championship wage gap looks likely to be set at 18m (if it gets passed). League 1’s will be 2.5m. That’s about 7 times higher. Assuming your relegation clause looks to reduce the players’ wages in line with the league limits, you’re basically asking a player to agree to about an 85% wage drop. What person in their right mind is going to agree to that?!

I also don’t understand what ‘any signing completed before the vote takes place will contribute to the league average’ means in practice. Would be grateful if someone could explain. Why does the league average make any difference when there’s an established flat cap?

My biggest issue with this whole thing is that it’s completely rushed and hasn’t really been called for at all. The argument that it will help clubs deal with the economic fallout of covid is totally disingenuous, surely - clubs outgoings will still be more or less the same in the short term, and it’s the short term loss of revenue that covid has caused. Who, even three or four months ago, was calling for a league-wide salary cap? Would a salary cap actually protect against the most flagrant abuses of football club ownership that we have seen recently, like with Wigan?

Finally, I would also like fans to be given a say in this, as they stand to gain or lose the most from this vote. We have not even been explained in detail what the terms of this plan are, let alone been given a chance to voice concerns and have an impact on the final decision. All we’ve had are confused sound bites from managers and journalists that leave a lot of questions unanswered. It seems mad that a decision of such monumental significance to clubs in the football league hasn’t even been properly explained to supporters of those clubs.
good post...raising some good points ^^
 
Wouldn't it be better to say owners have personal liability and responsibility to clear all debts when they sell a club, so clubs have a clean slate after each sale. Would also force serious consideration about budgets and surely easier to police with a mandatory section in all contracts of sale of clubs. It would probably make clubs more expensive to buy but not necessarily a bad thing, might weed out some of the chancers we've seen owning clubs down the years.

Probably wishful thinking and not practical!
 
Maybe follow the Rugby model?


"The current level of the Salary Cap for 2017-18 is £7m, plus two Excluded Players whose salaries sit outside the cap, enabling clubs to recruit and retain world class talent. Within the £7 million Salary Cap ceiling, clubs are encouraged to develop home grown talent by accessing up to £600,000 of Home Grown Player Credits. Also, they can provide an unlimited education (academic or vocational) fund to their players, and can replace long-term injured players without impacting on their Salary Cap ceiling.

The "big" clubs coming down could retain their highest earners as "excluded players" and build from that. Whilst the numbers may be different in football the theory works in Rugby and even gave the clubs protection from Covid with the ability to defer a % of payments if the player agreed. If not.... toodle pip.
 
Maybe follow the Rugby model?


"The current level of the Salary Cap for 2017-18 is £7m, plus two Excluded Players whose salaries sit outside the cap, enabling clubs to recruit and retain world class talent. Within the £7 million Salary Cap ceiling, clubs are encouraged to develop home grown talent by accessing up to £600,000 of Home Grown Player Credits. Also, they can provide an unlimited education (academic or vocational) fund to their players, and can replace long-term injured players without impacting on their Salary Cap ceiling.

The "big" clubs coming down could retain their highest earners as "excluded players" and build from that. Whilst the numbers may be different in football the theory works in Rugby and even gave the clubs protection from Covid with the ability to defer a % of payments if the player agreed. If not.... toodle pip.
Sounds like a lot more thought has gone into this
 
I also don’t understand what ‘any signing completed before the vote takes place will contribute to the league average’ means in practice. Would be grateful if someone could explain. Why does the league average make any difference when there’s an established flat cap?

My understanding is that the EFL are accepting that clubs can't retroactively change player wages - and it would be impossible for everyone to get themselves under the cap for this season.

So what they are saying is that anyone who is already under contract that earns more than the league average wage (which is £1,300) is counted under the cap as if they're being paid the League One average wage. Anyone who is signed in the future, their full wage will count against the cap.
 
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.

You might be right.

I think it would be very short-sighted for Wigan - because once this salary cap is in place, chances are it's not going away again any time soon (they would presumably then need two thirds of clubs to vote for its removal......and there's always going to be a bunch of clubs in League One that are going to benefit from this leveling of the playing field).

They have shown that, even in League One, they can regularly pull 9-10k fans. With the associated commercial revenue, and the TV money, that's a fanbase that can comfortably sustain a wage bill north of £2.5m. So whilst a wage cap could help them stay solvent today (or at least help them stay competitive today), it would hinder them in the future if and when they get their finances sorted out.

But hey, I guess administrators are paid to think short term!
 
My understanding is that the EFL are accepting that clubs can't retroactively change player wages - and it would be impossible for everyone to get themselves under the cap for this season.

So what they are saying is that anyone who is already under contract that earns more than the league average wage (which is £1,300) is counted under the cap as if they're being paid the League One average wage. Anyone who is signed in the future, their full wage will count against the cap.
So could a team hypothetically be over the wage cap right from the outset, even with the under-estimated average wages of some players, if they have a big enough squad?
 
My understanding is that the EFL are accepting that clubs can't retroactively change player wages - and it would be impossible for everyone to get themselves under the cap for this season.

So what they are saying is that anyone who is already under contract that earns more than the league average wage (which is £1,300) is counted under the cap as if they're being paid the League One average wage. Anyone who is signed in the future, their full wage will count against the cap.
Which means that in the coming season the clubs relegated from the Championship will have an unfair advantage over the rest of the clubs in League 1.
 
Which means that in the coming season the clubs relegated from the Championship will have an unfair advantage over the rest of the clubs in League 1.
The clubs that already spent more than us will be able to keep the high earners that got them relegated.
 
So could a team hypothetically be over the wage cap right from the outset, even with the under-estimated average wages of some players, if they have a big enough squad?

If all three divisions pass the wage cap, then there will be a cap on squad sizes (at least for Over-21s) as well.

No idea how long they're planning to give teams to comply with that - but whilst it's probably possible that this season you could be over the cap from the outset even with under-estimated wages, that's not likely to be the case in the future, even for teams coming down from the Championship.
 
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