Salary Caps in Leagues One and Two

[claretgoss]

'League One and League Two clubs vote for salary caps'

https://www.skysports.com/share/12044401

Formally approved, though the PFA aren't in favour

[FCBurnley]

2.5 million and 1.5 million per what ?

[NottsClaret]

Interesting development this, sounds positive but going to throw up a lot of curious legal scenarios.

[claretgoss]

2.5 million and 1.5 million per what ?

I'm assuming per season (though not even the EFL's own article specifies!)

[claretgoss]

Interesting development this, sounds positive but going to throw up a lot of curious legal scenarios.

Yeah, on the face of it it sounds like a step in the right direction. We'll see how it plays out in reality though

[FCBurnley]

I'm assuming per season (though not even the EFL's own article specifies!)

I assume that also but to run a D1 team on 2.5 mill per year seems very low.
1 player on 5k a week is 250k a year which is 10% of the overall budget.
Squad of 20 players averaging 1k per week is over 1 million.

[claretburns]

Interesting development this, sounds positive but going to throw up a lot of curious legal scenarios.

Not sure what legal scenarios can come up? Players currently on contracts at the club will surely stay on the same amount? But incoming new players will be subject to the new salary cap, then it is up to that individual player to accept the contract or not?

Only legal problems this could cause are teams going over the salary caps and potential punishments.

Also Championship teams being relegated will surely have a grace period of 1-2 years to bring their salaries under the cap, but whilst the hope would be the caps make it more even in these leagues, in League One especially it will help the relegated Championship teams more than anyone.

[claretgoss]

I assume that also but to run a D1 team on 2.5 mill per year seems very low.
1 player on 5k a week is 250k a year which is 10% of the overall budget.
Squad of 20 players averaging 1k per week is over 1 million.

I think 5k a week may be top end in League One though. If the average wage through a squad is around 2-3k it seems achievable enough

[ksrclaret]

Very good news. Hopefully just the start of taking back control of the ludicrous state of finances in football.

The EFL clubs are in much safer hands with Dave Baldwin in charge.

[Paul Waine]

Quoting from Sky link:

"Expenditure that will contribute towards the salary cap includes wages, taxes, bonuses, image rights, agents' fees and other fees paid directly or indirectly to registered players."

"Payments directly linked to promotion or a club's performance in cup competitions are excluded from the cap, while income from players leaving on loan will be deducted."

Seems pretty comprehensive - all fees paid directly or indirectly to registered players....

No wonder PFA - that's the players' union - don't like it.

£1.5 million - across 25 registered players is an average of £60,000 per player. The gov't National Insurance is currently 13.8% of wage - so, this takes maybe £6,000 of this number.

We can imagine League 2 clubs will not keep 25 man squads - and some may even go part-time...

I wonder if there's a limit on how many "player-coaches" a club can employ?

Similar maths for League 1: £2.5m = average £100,000. It's still a good wage for working out doors and kicking a ball around.

[Paul Waine]

Not sure what legal scenarios can come up? Players currently on contracts at the club will surely stay on the same amount? But incoming new players will be subject to the new salary cap, then it is up to that individual player to accept the contract or not?

Only legal problems this could cause are teams going over the salary caps and potential punishments.

Also Championship teams being relegated will surely have a grace period of 1-2 years to bring their salaries under the cap, but whilst the hope would be the caps make it more even in these leagues, in League One especially it will help the relegated Championship teams more than anyone.

Maybe the Championship teams will all need to adopt relegation clauses? If they get relegated they have to bring their player costs into line immediately they go down. if they don't then points deduction at the end of the season - and down they go again.

I feel sorry for all the agents....

[GodIsADeeJay81]

Not sure what legal scenarios can come up? Players currently on contracts at the club will surely stay on the same amount? But incoming new players will be subject to the new salary cap, then it is up to that individual player to accept the contract or not?

Only legal problems this could cause are teams going over the salary caps and potential punishments.

Also Championship teams being relegated will surely have a grace period of 1-2 years to bring their salaries under the cap, but whilst the hope would be the caps make it more even in these leagues, in League One especially it will help the relegated Championship teams more than anyone.

Sod giving relegated teams a couple of years to sort their wage bills out, just make relegation clauses mandatory, that gets the wage bill under control in a matter of weeks instead of years.

The likes of Bolton and Sunderland still haven't got theirs under control and they've had years, same with Rovers.
The League aren't forceful enough with this.

[CardiffClaret]

I wonder if this will result in some of the better off National League clubs being able to entice players from League Two, with more attractive salary packages?

[GodIsADeeJay81]

Wouldn't be any point would there, because upon promotion they'll have to meet the salary cap.

[Foulthrow]

Will we not see some rule bending regardless? Players being “employed” at the owner’s other business or players being classified as academy coaches? Or maybe another Derby situation with Tom Ince’s mum getting a job.

[CardiffClaret]

Wouldn't be any point would there, because upon promotion they'll have to meet the salary cap.

I don't know about that. I would have thought it would be the same scenario as it would be for Championship clubs being relegated into League One. i.e. all existing contracts would remain on the terms that were agreed, but new contracts would have to work towards meeting the criteria, presumably with some defined grace period. So they could potentially be allowed to break the budget rules for a few years after promotion.

[wilks_bfc]

I think 5k a week may be top end in League One though. If the average wage through a squad is around 2-3k it seems achievable enough

For a squad of 22 over a year it works out at

£1.5m - £1300 each per week
£2.5m - £2185 each per week

Even at an average, I can see a lot of players having to take a cut

[GodIsADeeJay81]

I don't know about that. I would have thought it would be the same scenario as it would be for Championship clubs being relegated into League One. i.e. all existing contracts would remain on the terms that were agreed, but new contracts would have to work towards meeting the criteria, presumably with some defined grace period. So they could potentially be allowed to break the budget rules for a few years after promotion.

They need mandatory relegation clauses to stop clubs breaking the new caps.

As for promoted clubs, if they're allowed an inflated wage cap when they enter the league then it's all fairly pointless restricting others.

[mdd2]

What splendid news this could be with the possibility at long last that some sense is coming back into the game. Who on here wouldn't mind £5k a week?
I have had a very well paid job and never got anywhere near that level of remuneration.

[ClaretTony]

PFA have criticised the decision from the league and said it is both unlawful and unenforceable

[FCBurnley]

Great opportunity for PL clubs to take over D1/2 clubs and use them as feeder teams for developing young players. The new salary caps make this a very viable proposition. So who should we take over ?

[Chester Perry]

Will we not see some rule bending regardless? Players being “employed” at the owner’s other business or players being classified as academy coaches? Or maybe another Derby situation with Tom Ince’s mum getting a job.

The cap is not for the playing staff is is for the whole club - first thing we will see is a lot of non football staff transfer to another business and services being contracted in - a few clubs do this already including Derby and Man City (both not affected by salary cap I know = Sunderlands last accounts showed wage spend of £27m in the 2018/19 accounts (in League 1) that will have dropped during last season but shows just how far they will have to come down.

The cap is interesting especially for clubs like Sunderland - as they will be in the final year of the Parachute payments this coming season and in normal circumstances would be generating £20m or so of income, on their own.

[Foulthrow]

What splendid news this could be with the possibility at long last that some sense is coming back into the game. Who on here wouldn't mind £5k a week?
I have had a very well paid job and never got anywhere near that level of remuneration.

Bear in mind that they are likely to be on £5k a week for - what - 5 to 10 years at best. They have also probably had to sacrifice a great deal just to get to that level and may well have nothing to go to once they have finished in football.

[Rowls]

Well intentioned but misguided.

I can't see this lasting long before some kind of challenge.

What is really required is fiscal discipline at club level.

[mdd2]

in mind that they are likely to be on £5k a week for - what - 5 to 10 years at best. They have also probably had to sacrifice a great deal just to get to that level and may well have nothing to go to once they have finished in .

Like everybody else they need to plan ahead as many do rather than squander it and end up bankrupt like so many do.
Most people who have to climb any kind of professional ladder have made many sacrifices and for far less reward and in the light of the present pandemic have risked more than dodgy knees

[aggi]

Will we not see some rule bending regardless? Players being “employed” at the owner’s other business or players being classified as academy coaches? Or maybe another Derby situation with Tom Ince’s mum getting a job.

I imagine the first thing would be to TUPE all your turnstile staff, coaches, stewards, cleaners, ticket office staff, etc over to a new company and then have that company charge the club for services.

Or just sack them all and contract G4S or someone.

Then you can look at things like those which Saracens were doing, setting up joint companies and the like.

Obviously this is if it doesn't all get thrown out as restraint of trade.

[ClaretTony]

Great opportunity for PL clubs to take over D1/2 clubs and use them as feeder teams for developing young players. The new salary caps make this a very viable proposition. So who should we take over ?

No thanks, would destroy the whole game in this country.

[fatboy47]

If the PFA are against it then I'm all for it.

Bunch of snotgobblers.

[AfloatinClaret]

PFA have criticised the decision from the league and said it is both unlawful and unenforceable

I don't see why, several sports both home and abroad have salary caps. To decree that 'no one player can be paid more than x pounds per week/month/year' would certainly be unlawful, but a squad cap certainly isn't. As with Rugby Union at the moment, there will have to be a transition period to allow existing contracts to be honoured (the bypass there has been with the wealthier clubs rushing through long, highly paid contracts for 'star' players ahead of the cap coming into force) but beyond that, as a Plc which most football clubs are, the figures need to be published in the annual tax return; I'm sure that there will be ways to sneak a bit more through, but cheating by a significant amount would be difficult over an extended period. 'Hiding' the odd million might be feasible in the books of an EPL club, but not in the sort of numbers that D1/D2 clubs show in there annual returns; as suggested earlier, the most likely cheat will be players being employed part-time by the club to play football and part-time to do a n other job for wealthy supporters of that club, that was hoe Rugby Union stayed 'amateur' for so long and was no doubt utilised in football during the days of the maximum-wage?

[Colburn_Claret]

The PFA should be prioritising that their members have a job, rather than get as much money as they can. I do understand where they are coming from, but surely common sense dictates that saving jobs is the first order of the day. Unless the EFL enforce sustainability more and more clubs are going to go to the wall. The clubs seem happy to oblige.

[GodIsADeeJay81]

PFA and common sense don't often go together

[taffy]

Surely the clubs would pay the wage they are told to then pay certain players exorbitant bonus payments, which would be entertaining if they only got a win bonus but we all know that players get appearance money and so forth, how would they regulate bonus payments

[Claretmatt4]

Surely it had to be done for everyone not just these two leagues? Championship clubs will just be able to gazump the best players in L1 and L2.

It's putting these clubs at a significant disadvantage.

It's successful in the US because there is no relegation and these are franchises not clubs.

[ClaretTony]

PFA and common sense don't often go together

They have one responsibility and that’s their members. They get a bad press but I’ve come across far worse trade unions.

[FCBurnley]

No thanks, would destroy the whole game in this country.

It’s already destroyed.

[ClaretTony]

It’s already destroyed.

Anything but destroyed. It’s struggling because of the current situation but the day we start having feeder clubs as you suggest it will be the end.

[Paul Waine]

Portsmouth FC statement on their website: https://www.portsmouthfc.co.uk/news/202 ... eague-two/

EFL Statement: 'Squad Salary Caps' Introduced In League One And League Two
Pompey campaigned against the proposal

[Chester Perry]

Prior to the vote the PFA commissioned a report and shared it with all clubs

News release
https://www.thepfa.com/news/2020/8/6/pf ... egulations

The report
https://www.thepfa.com/-/media/Files/PF ... .pdf?la=en

[Erasmus]

Regarding player salaries, I noticed the other day that Hamilton Academical players in the Scottish Premiership have an average annual salary of £45,000. If that is workable in that league, I don't see why similar levels couldn't be viable in League 2.

[dsr]

The cap is not for the playing staff is is for the whole club - first thing we will see is a lot of non football staff transfer to another business and services being contracted in - a few clubs do this already including Derby and Man City (both not affected by salary cap I know = Sunderlands last accounts showed wage spend of £27m in the 2018/19 accounts (in League 1) that will have dropped during last season but shows just how far they will have to come down.

The cap is interesting especially for clubs like Sunderland - as they will be in the final year of the Parachute payments this coming season and in normal circumstances would be generating £20m or so of income, on their own.

Where does it say that it's for the whole club? The linked article says it's for players. It won't include youth players, it won't include other staff, it won't include coaches I wouldn't have thought. It will be the senior registered players. The FL will have already worked out that if it includes tea ladies and turnstile operators then clubs will contract them out; they aren't dim enough not to make allowances for that.

Cattermole was allegedly earning, in Sunderland's first season in the third division, £70k per week. He would have blown the entire budget with room to spare. That would bring a new meaning to a one-man team!

[dsr]

Surely the clubs would pay the wage they are told to then pay certain players exorbitant bonus payments, which would be entertaining if they only got a win bonus but we all know that players get appearance money and so forth, how would they regulate bonus payments

PAYE records for one, and strong penalties for clubs that pay dodgy BVI companies in the players' names.

[FCBurnley]

Anything but destroyed. It’s struggling because of the current situation but the day we start having feeder clubs as you suggest it will be the end.

Some people are just dinosaurs and we know what happened to them. The times they are a changing

[Woodleyclaret]

A positive step now this needs extending to include the Championship then the problem of parasitic agents ,another cause for financial issues,needs nailing.

[CharlieinNewMexico]

Regarding player salaries, I noticed the other day that Hamilton Academical players in the Scottish Premiership have an average annual salary of £45,000. If that is workable in that league, I don't see why similar levels couldn't be viable in League 2.

I hear they have a great keeper ....

[ClaretTony]

Some people are just dinosaurs and we know what happened to them. The times they are a changing

Ha ha - what a load of nonsense.