Salary cap confirmed

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RyanioBirdio said:
So how do we reduce the debt by reducing what we can spend on players, when we are incapable of generating the income just to break even without buying and selling? Outside of match tickets it’s pretty much our only source of income due to our circumstances. We would be in a world where our owner is the only person who can keep offsetting the debt singlehandedly - especially since covid has meant we don’t even get a big chunk of the revenue we normally would - and they also can’t choose to try to move us forward because there’s a spending cap in place that would reduce our wage bill to what it used to be in L2. Why would the owner keep offsetting all of our (growing) losses? He / they might not be so keen on floating around achieving L1 mediocrity because at least it’s not too hot and it’s not too cold. That there’s already been a hint today of one of our backers being put off at the thought of not being able to invest should be somewhat of a concern. Where is the return on investment?

It’s a very complex issue, of course, but I don’t think this blanket, black and white approach is going to be the saviour. For some clubs potentially including us, it could actually affect us for the worse.
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To play devils advocate:

How are we going to reduce the debt? By making a profit. How are we going to make a profit? By reducing our spending to less than our turnover. Why do we spend more than we make? Because everyone else does.

How are we going to generate a big pay off for our owner? By outmanaging the other teams. If we can't outmanage the other teams then why does our owner deserve to have a big pay off? Because he was rich already and had a lot of money to throw about? That stinks.

I agree that absolutely no approach is just going to be a homerun success. I'm not even sure I favour the salary cap - certainly I don't if not implemented with care and thought - but I favour a more detailed consideration of any proposal before I make my mind up, and always will do until someone answers that question of mine: what happens to OUFC if Tiger gets bored?
 
RgYellows said:
I think the Man City example shows that it's far more than just the lack of punishment, it is also the complexity of the rules which means it takes years of legal disputes to decide if someone broke them in the first place.

It is much easier to say "make the rules clear" that it is to make them clear. You only thought to include ground sales because some brainbox realised you could sell the ground to get around FFP. However you choose to define income and capital, I think someone will find the loophole.

In the NFL, big markets like New York get to spend the same as Green Bay and Kansas. It worked alright for them.
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The rules can be made clear such as stating what can and can't be included in income. And if a loophole is found then the independent body closes it asap. Revisions can be made in the rules, they aren't literally set in stone.
 
Marked Ox said:
The rules can be made clear such as stating what can and can't be included in income. And if a loophole is found then the independent body closes it asap. Revisions can be made in the rules, they aren't literally set in stone.
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They can be made, once you have clocked what someone is doing and why, paid the consultants to work out how to stop it, had a league vote and got the majority to stop it, and paid the lawyers to argue about it in court. And hey, you have added another few paragraphs to your complex set of rules.

By which time the big club with the billionaire owner in question has already smashed the FFP limit, risen up the league and gained more influence, maybe got to the top flight and out of the EFL rules altogether.

And when you've done it, the next loophole emerges.

You cannot possibly state everything that can and can't be included in income, unless you are to list every single object in the world that exists or may exist. Anything you miss, becomes an opportunity to break a rule.
 
Marked Ox said:
That sort of things applies to any system as described above about loopholes.
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It does, which is why I think there's more to be said for blunt instruments than adding layers of complexity in some cases.
 
So where is the biggest earner we have ever had signing? Unless he was on about the shirt sponsor being the biggest player.
 
RgYellows said:
It does, which is why I think there's more to be said for blunt instruments than adding layers of complexity in some cases.
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So your system has loopholes, mine does, so the loopholes argument you make is made redundant. Supposed simplicity/blunt instruments can cause more problems than they are supposed to solve and complexity is necessary when it is a complex situation.
 
RgYellows said:
Okay, lets use an example. You said we write a list of what is included as income, and what isn't included as income. I'm going to give myself a couple of minutes, and confine myself solely to the sales of snacks, and give you a few items they'd need to consider:

Will sales of crisps be allowed in FFP? Can a rich chairman pay £1m for a bag of crisps?
What about purchases of crisps to sell? Can a chairman buy enough crisps to last a year, and sell them to the club for £1?
Maybe we can cover all snacks. But what is a snack? Is fruit a snack? What if we call a bag of crisps and tea a meal, is that a snack or is a meal different from a snack?
Surely drinks aren't snacks?
What about if we sell the snack stand itself, is that capital or revenue?
What about if we sell the beer pumps, is that capital or revenue?
Surely the plastic cups must be revenue, or are they capital?
Okay lets just say all the stuff sold under the East Stand is fine. What about dinners in the Boxes?
What about the Boxes themselves, can we include income the Chairman pays for a box?
What about if the Box has a season ticket?
What about if we sell a ten year season ticket for the Box? Is that capital or revenue?
What about a 100 year?
What about if we sell the rights to sell snacks under the East Stand to a company owned by the Chairman? Is that capital or revenue?
What if the Chairman buys a licence to share in the profits of the snack stands? Does it matter if it's one year or ten years? When's the cut off? Can a chairman pay £10m to share in the profits of one of our snack stands for a year?

We can go on forever.
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If you read the actual EFL rules on FFP, you wouldn't need to ask these questions.

EFL Official Website - Appendix 5 - Financial Fair Play Regulations

www.efl.com www.efl.com

Scroll down to:
PART 3 – LEAGUE ONE SALARY COST MANAGEMENT PROTOCOL (SCMP) GUIDANCE NOTES
APPENDIX A – DEFINITION OF RELEVANT TURNOVER AND FOOTBALL FORTUNE INCOME

The current rule is League 1 clubs can spend a maximum of 60% of their turnover on wages.
The definition of turnover is pretty clear.
The problem is not the rule. The problem is that the EFL have failed to enforce compliance.
 
Marked Ox said:
So your system has loopholes, mine does, so the loopholes argument you make is made redundant. Supposed simplicity/blunt instruments can cause more problems than they are supposed to solve and complexity is necessary when it is a complex situation.
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I dont really think the salary cap is "my" system but I suppose my argument is that it has less loopholes that I can see, and that I can think of an obvious and high profile example of it working. Plus from a selfish point of view, I would like to be reassured that the survival of my club is not dependent on the whims of one man.
I see all the points you're making, I just don't really see much support for them. But then I think I've made that point enough times here now, so let's just agree to disagree.
 
RgYellows said:
I dont really think the salary cap is "my" system but I suppose my argument is that it has less loopholes that I can see, and that I can think of an obvious and high profile example of it working. Plus from a selfish point of view, I would like to be reassured that the survival of my club is not dependent on the whims of one man.
I see all the points you're making, I just don't really see much support for them. But then I think I've made that point enough times here now, so let's just agree to disagree.
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Yes, agree to disagree.
 
ttg17 said:
The thing is, this argument about loopholes could be made whatever the regulations in place ultimately end up being. Take introducing a wage cap. If a richer club buys houses for all its players that the players can live in free of charge, thus saving them a lot of money on rent, does that count as contribution towards a 'wage cap'? If a club's policy is that all players have a very low base salary but massive performance-related bonuses, how are those counted for the purpose of an 'average wage'? What about a massive signing-on fee?

I think basically whatever you do is going to be hard to enforce and will have issues. So you take the policy right back to its roots: what is the purpose of the rule that is being implemented? If it is to 'prevent clubs spending outside their means', which I think we would all agree is the general idea, a blunt salary cap does not do this - for one thing, the salary cap may be too high for some clubs, which continue to overspend. A club's 'means' are dependent on a huge number of factors, and are not uniform, so to introduce a regulation that works on the idea that they are is foolhardy. A 'percentage of income' model, while imperfect, take this into account.

Also, I don't think the analogy with the NFL really works. Entire states can be literally obsessed with their football team. I literally couldn't name anything I associate with Wisconsin beyond cheese and the Packers - their football team is a HUGE part of the state's DNA. That market is comfortably bigger than, say, a New York, where there are multiple different teams from multiple different sports competing for punters' dollars.
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Completely agree with the bit about the NFL, the tv revenue these teams generate makes the salary cap viable, they also have a draft every year from collegiate level to supply the teams. Also the Green Bay Packers have a waiting list of five years for a season ticket, so its a bit different from EFL league one :p
 
The salary cap works in US sports because they are closed systems. No promotion or relegation, teams will even tank seasons to be competitive the next. Can't say I'm a huge fan of FFP either. Seems to help bigger clubs keep the smaller clubs at bay and has done nothing to stop teams going bankrupt or selling their grounds.
 
Marked Ox said:
That sort of things applies to any system as described above about loopholes.
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Clubs managed to get round FFP and cheat the system so I can’t see how a cap would improve the cheating that will go on
 
warksox said:
If you read the actual EFL rules on FFP, you wouldn't need to ask these questions.

EFL Official Website - Appendix 5 - Financial Fair Play Regulations

www.efl.com www.efl.com

Scroll down to:
PART 3 – LEAGUE ONE SALARY COST MANAGEMENT PROTOCOL (SCMP) GUIDANCE NOTES
APPENDIX A – DEFINITION OF RELEVANT TURNOVER AND FOOTBALL FORTUNE INCOME

The current rule is League 1 clubs can spend a maximum of 60% of their turnover on wages.
The definition of turnover is pretty clear.
The problem is not the rule. The problem is that the EFL have failed to enforce compliance.
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And Bournemouth were spending 85% of their income where the think it was supposed to be 65%
 
bazzer9461 said:
Been away for a few days can someone enlighten me is it tomorrow that the EFL bore on a wage cap? If so would it take into account the players already with clubs as part of the wage cap as I see Bristol Rovers have signed 7 players
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No, the salary cap will only apply to contracts signed after tomorrows vote, anything before is deemed to be league average
 
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