To be fair, the salary cap was a crap idea but the motivation behind it was to stop clubs gambling their all and ending up as Bury or Macclesfield. I'm glad it's gone but those underlying problems haven't gone away - Andy Holt's points about FFP not working are bang on (as we've seen with the Massives, WRDC, etc).
We currently have an owner with bigger pockets than most others in this division, but I still want to see us run sustainably because we've seen what happens otherwise.
FFP isn't perfectly constructed, sure, but by far its biggest problem is that EFL's implementation has been ludicrous. Punishments handed to blatant rule breakers have been woefully inadequate and risibly inconsistent. The owners of Birmingham, SheffW and Derby knew all along and have carried on in the certain knowledge they'd get off scot free.
The absence of this version of the salary cap makes how much difference to Charlton's/anybody's wages budget in League 1. They're all still constrained to 60% of Turnover (that's income, revenue from all sources). All Charlton has had for 12 months is the money from EFL. Match day income is effectively nil. Charlton's commercial income is among the lowest in the division. The twunt saw to it that CAFC as a commercial concern was stunted and increasingly isolated from all sorts of revenue streams. TS might be our wealthiest and most enthusiastic owner for a dozen years or so but 60% of fuck all still don't amount to lucrative contracts for promising players. Nonetheless now might be the moment to secure Stockley and Shinnie(?) on permanents and offer decent contracts to some we'd like to hang on to.
The salary cap may well have gone, but the spending restrictions that were previously in force will come back in- player related expenditure set at a maximum of 60% of turnover.
Not sure how this is going to pan out for any clubs this season with no "customers" through the turnstiles.
The salary cap may well have gone, but the spending restrictions that were previously in force will come back in- player related expenditure set at a maximum of 60% of turnover.
Not sure how this is going to pan out for any clubs this season with no "customers" through the turnstiles.
I’m guessing there will be some leeway. It’s difficult to punish a club when the reduced expenditure is due to a global pandemic.
The big thing is that our calculation will include the player sales and sell on fees we have received. These will be a lot higher than most teams in our division and should give us more room to manoeuvre.
The salary cap may well have gone, but the spending restrictions that were previously in force will come back in- player related expenditure set at a maximum of 60% of turnover.
Not sure how this is going to pan out for any clubs this season with no "customers" through the turnstiles.
I’m guessing there will be some leeway. It’s difficult to punish a club when the reduced expenditure is due to a global pandemic.
There will be leeway this season on the 60% rule. But even that doesn’t stop an owner spending his own money as long as it is not a loan on the balance sheet (that’s as I understand it anyway).
The salary cap may well have gone, but the spending restrictions that were previously in force will come back in- player related expenditure set at a maximum of 60% of turnover.
Not sure how this is going to pan out for any clubs this season with no "customers" through the turnstiles.
I’m guessing there will be some leeway. It’s difficult to punish a club when the reduced expenditure is due to a global pandemic.
There will be leeway this season on the 60% rule. But even that doesn’t stop an owner spending his own money as long as it is not a loan on the balance sheet (that’s as I understand it anyway).
I think investment converted to equity counts as income. I am not sure how "market value" sponsorship works in the EFL though.
To be fair, the salary cap was a crap idea but the motivation behind it was to stop clubs gambling their all and ending up as Bury or Macclesfield. I'm glad it's gone but those underlying problems haven't gone away - Andy Holt's points about FFP not working are bang on (as we've seen with the Massives, WRDC, etc).
We currently have an owner with bigger pockets than most others in this division, but I still want to see us run sustainably because we've seen what happens otherwise.
FFP isn't perfectly constructed, sure, but by far its biggest problem is that EFL's implementation has been ludicrous. Punishments handed to blatant rule breakers have been woefully inadequate and risibly inconsistent. The owners of Birmingham, SheffW and Derby knew all along and have carried on in the certain knowledge they'd get off scot free.
The absence of this version of the salary cap makes how much difference to Charlton's/anybody's wages budget in League 1. They're all still constrained to 60% of Turnover (that's income, revenue from all sources). All Charlton has had for 12 months is the money from EFL. Match day income is effectively nil. Charlton's commercial income is among the lowest in the division. The twunt saw to it that CAFC as a commercial concern was stunted and increasingly isolated from all sorts of revenue streams. TS might be our wealthiest and most enthusiastic owner for a dozen years or so but 60% of fuck all still don't amount to lucrative contracts for promising players. Nonetheless now might be the moment to secure Stockley and Shinnie(?) on permanents and offer decent contracts to some we'd like to hang on to.
It's not only the EFL's implementation. The EPL and UEFA have probably been worse!
All sporting bodies seem to be totally piss poor. I can't actually think of a good one.
To be fair, the salary cap was a crap idea but the motivation behind it was to stop clubs gambling their all and ending up as Bury or Macclesfield. I'm glad it's gone but those underlying problems haven't gone away - Andy Holt's points about FFP not working are bang on (as we've seen with the Massives, WRDC, etc).
We currently have an owner with bigger pockets than most others in this division, but I still want to see us run sustainably because we've seen what happens otherwise.
FFP isn't perfectly constructed, sure, but by far its biggest problem is that EFL's implementation has been ludicrous. Punishments handed to blatant rule breakers have been woefully inadequate and risibly inconsistent. The owners of Birmingham, SheffW and Derby knew all along and have carried on in the certain knowledge they'd get off scot free.
The absence of this version of the salary cap makes how much difference to Charlton's/anybody's wages budget in League 1. They're all still constrained to 60% of Turnover (that's income, revenue from all sources). All Charlton has had for 12 months is the money from EFL. Match day income is effectively nil. Charlton's commercial income is among the lowest in the division. The twunt saw to it that CAFC as a commercial concern was stunted and increasingly isolated from all sorts of revenue streams. TS might be our wealthiest and most enthusiastic owner for a dozen years or so but 60% of fuck all still don't amount to lucrative contracts for promising players. Nonetheless now might be the moment to secure Stockley and Shinnie(?) on permanents and offer decent contracts to some we'd like to hang on to.
It's not only the EFL's implementation. The EPL and UEFA have probably been worse!
All sporting bodies seem to be totally piss poor. I can't actually think of a good one.
The salary cap may well have gone, but the spending restrictions that were previously in force will come back in- player related expenditure set at a maximum of 60% of turnover.
Not sure how this is going to pan out for any clubs this season with no "customers" through the turnstiles.
I’m guessing there will be some leeway. It’s difficult to punish a club when the reduced expenditure is due to a global pandemic.
There will be leeway this season on the 60% rule. But even that doesn’t stop an owner spending his own money as long as it is not a loan on the balance sheet (that’s as I understand it anyway).
I think investment converted to equity counts as income. I am not sure how "market value" sponsorship works in the EFL though.
I suspect we will see Zynex Sparrows Lane shortly if FFP regulations stay as they are
It will help Thomas as income can come into the club from outside his direct pockets; brings revenue into the club; and unlike Everton’s USM Finch Farm, the marketing value to a medical devices company active in the UK market will be more useful than that to a Russian holding company, and therefore clearly demonstratable as being at arms-length market value
To be fair, the salary cap was a crap idea but the motivation behind it was to stop clubs gambling their all and ending up as Bury or Macclesfield. I'm glad it's gone but those underlying problems haven't gone away - Andy Holt's points about FFP not working are bang on (as we've seen with the Massives, WRDC, etc).
We currently have an owner with bigger pockets than most others in this division, but I still want to see us run sustainably because we've seen what happens otherwise.
FFP isn't perfectly constructed, sure, but by far its biggest problem is that EFL's implementation has been ludicrous. Punishments handed to blatant rule breakers have been woefully inadequate and risibly inconsistent. The owners of Birmingham, SheffW and Derby knew all along and have carried on in the certain knowledge they'd get off scot free.
The absence of this version of the salary cap makes how much difference to Charlton's/anybody's wages budget in League 1. They're all still constrained to 60% of Turnover (that's income, revenue from all sources). All Charlton has had for 12 months is the money from EFL. Match day income is effectively nil. Charlton's commercial income is among the lowest in the division. The twunt saw to it that CAFC as a commercial concern was stunted and increasingly isolated from all sorts of revenue streams. TS might be our wealthiest and most enthusiastic owner for a dozen years or so but 60% of fuck all still don't amount to lucrative contracts for promising players. Nonetheless now might be the moment to secure Stockley and Shinnie(?) on permanents and offer decent contracts to some we'd like to hang on to.
Amongst the lowest in the Championship maybe, but surely amongst the highest in L1
As soon as a band has more than one club in it then it's legally questionable. Supposedly rival companies conspiring to artificially deflate wages, with some healthy age discrimination mixed in, is just a non-starter.
Unless you move to a franchise model (obviously no chance), flat limits on expenditure with absolutely no reference to revenue are totally unworkable and inequitable.
It's a race to the bottom for the larger/more aspirational clubs and arguably puts pressure on smaller clubs to spend more.
The concept was fatally flawed from Day 1. Thanks to a host of self-interested parties who believed they would benefit and the EFL's standard incompetence well summarised by @Henry Irving above, 48 clubs have been spending the last 6 months constructing their squads to live by a rule that should never have been implemented in the first place.
Will be interesting to see if anyone wants to have a pop at a claim.
It strikes me Andy Holt is someone who thinks the need to justify their job is to come up with an idea & keep ploughing on through until the bitter end. Time to give up me-thinks.
Early
this week an eminent independent arbitration tribunal upheld the claim
brought by the Professional Footballers’ Association (PFA), the players’
union, that the EFL had breached its legal obligations by introducing a
salary cap in League One and League Two in August last year without the agreement of, or consultation with, the PFA.
The
case is significant because, in the tradition of cases brought by other
players asserting their rights such as George Eastham in 1963 and
Jean-Marc Bosman in 1995, it has led to the EFL changing its rules, as
it immediately scrapped the first salary cap in European football.
The
EFL — like the Premier League, the FA and the PFA — is party to the
Professional Football Negotiating and Consultative Committee (PFNCC),
a collective bargaining agreement under trade union law. The PFNCC
constitution requires that “no major changes to the regulations of the
leagues affecting a player’s terms and conditions of employment shall
take place without full discussion and agreement in the PFNCC”. When the
EFL decided to introduce a salary cap, it refused to consult with, or
obtain the agreement of, the PFNCC.
The
salary cap is no more and the EFL’s prospects of bringing in another
controversial cap in the Championship look unlikely. But everyone in
football agrees that there needs to be a functioning system of financial
controls to stop clubs that overspend becoming insolvent — as happened
with Bury in 2019.One
of the problems with the salary cap was that it prevented clubs who
could afford to pay higher salaries than others from doing so. A club
with income five times that of another was forced to pay the same wages
as the smaller club, limiting competition between clubs and driving
players’ wages down to the minimum.Such
a cap is incompatible with the pyramid structure of English football,
which encourages clubs to try to achieve promotion and then compete in
higher leagues. It is incompatible with a transfer system in which clubs
can buy and sell players at whatever price they choose. That is why
most sports that operate successful salary caps, mainly in the United
States, have closed leagues, without promotion and relegation, and do
not operate a transfer system. US salary caps are also the product of
collective bargaining with players’ unions.Financial
controls that limit the amount a club can spend compared with their
income make more sense, but two major problems arise here too. First,
the EFL’s rules in the Championship limit club owners from investing in
clubs by treating such investment as debt. That acts to discourage
investment in football when it is most needed, encourages clubs to seek
loopholes and means far too many clubs breach the rules.The
second problem is the opposite one — the old salary cost management
protocol rules in League One and Two, which limited spending on player
wages to a percentage of turnover, did allow owners to invest but failed
to put in place appropriate rules and procedures to prevent an owner
from “turning off the tap” and allowing a club to go under.The
best outcome from the salary-cap case will be for all the football
stakeholders, from clubs and the players’ union in each of the leagues,
to engage in consultation to create new financial rules that encourage
investment, secure the long-term future of clubs and can be fairly
enforced. Such a process should be linked with a fairer distribution of
football revenues throughout the leagues. The window of opportunity is
open; the football industry and fans can only hope it is not closed by a
rush to bring in new rules without proper thought or consultation.•Nick
De Marco, QC, along with Ravi Mehta of Blackstone Chambers (instructed
by Mills & Reeve), represented the PFA in the salary-cap case.
Early
this week an eminent independent arbitration tribunal upheld the claim
brought by the Professional Footballers’ Association (PFA), the players’
union, that the EFL had breached its legal obligations by introducing a
salary cap in League One and League Two in August last year without the agreement of, or consultation with, the PFA.
The
case is significant because, in the tradition of cases brought by other
players asserting their rights such as George Eastham in 1963 and
Jean-Marc Bosman in 1995, it has led to the EFL changing its rules, as
it immediately scrapped the first salary cap in European football.
The
EFL — like the Premier League, the FA and the PFA — is party to the
Professional Football Negotiating and Consultative Committee (PFNCC),
a collective bargaining agreement under trade union law. The PFNCC
constitution requires that “no major changes to the regulations of the
leagues affecting a player’s terms and conditions of employment shall
take place without full discussion and agreement in the PFNCC”. When the
EFL decided to introduce a salary cap, it refused to consult with, or
obtain the agreement of, the PFNCC.
The
salary cap is no more and the EFL’s prospects of bringing in another
controversial cap in the Championship look unlikely. But everyone in
football agrees that there needs to be a functioning system of financial
controls to stop clubs that overspend becoming insolvent — as happened
with Bury in 2019.
One
of the problems with the salary cap was that it prevented clubs who
could afford to pay higher salaries than others from doing so. A club
with income five times that of another was forced to pay the same wages
as the smaller club, limiting competition between clubs and driving
players’ wages down to the minimum.
Such
a cap is incompatible with the pyramid structure of English football,
which encourages clubs to try to achieve promotion and then compete in
higher leagues. It is incompatible with a transfer system in which clubs
can buy and sell players at whatever price they choose. That is why
most sports that operate successful salary caps, mainly in the United
States, have closed leagues, without promotion and relegation, and do
not operate a transfer system. US salary caps are also the product of
collective bargaining with players’ unions.
Financial
controls that limit the amount a club can spend compared with their
income make more sense, but two major problems arise here too. First,
the EFL’s rules in the Championship limit club owners from investing in
clubs by treating such investment as debt. That acts to discourage
investment in football when it is most needed, encourages clubs to seek
loopholes and means far too many clubs breach the rules.
The
second problem is the opposite one — the old salary cost management
protocol rules in League One and Two, which limited spending on player
wages to a percentage of turnover, did allow owners to invest but failed
to put in place appropriate rules and procedures to prevent an owner
from “turning off the tap” and allowing a club to go under.
The
best outcome from the salary-cap case will be for all the football
stakeholders, from clubs and the players’ union in each of the leagues,
to engage in consultation to create new financial rules that encourage
investment, secure the long-term future of clubs and can be fairly
enforced. Such a process should be linked with a fairer distribution of
football revenues throughout the leagues. The window of opportunity is
open; the football industry and fans can only hope it is not closed by a
rush to bring in new rules without proper thought or consultation.
•Nick
De Marco, QC, along with Ravi Mehta of Blackstone Chambers (instructed
by Mills & Reeve), represented the PFA in the salary-cap case.
I usually agree with most of what Andy Holt says, he's a sensible owner in the main and has football at heart compared to many.
We'll never know if it would have saved Bury but it certainly would have helped rather than been a hindrance.
The problem with the current status quo is you can have an owner who can inject funds if they wish to enable the club to run at a major loss, i.e. signing players and paying salaries far greater than the clubs income.
That all sounds fine, until the owner stops putting in those funds, you generally then have a club losing millions as you can't immediately cancel all contracts and break even, in essence that's what happened to Bury, their outgoings far exceeded their income and the then owners weren't prepared to fund the difference. Ultimately then a club is busted.
An adaption of the current rule could happen where an owner who wishes to inject cash and run at a loss over and above a certain level has to fund the club not just for the next month or six months but for a set period, say three years (just an example).
Very interesting reading through Andy Holt’s twitter feed. He’s not a happy bunny.
Because the cap favours him. Him calling out Salford is because the abolishment of the cap favours Salford. Every decision and action makes someone happy and someone sad.
So the salary cap broke the rules from the start but the EFL management just let it be implemented anyway.
As a result they had to defend this arbitration.
Any decent administration would have strongly pointed out at the time that any significant change would need PFA approval and to put it in hold until such approval was gained.
But no, they didn't do that.
Like waiting for the child to stick it's hand in the fire before warning them it burns.
All investment as equity, no debt. Spend what you like owner but you can't call it a loan and get it back
Fully costed business plans every summer as in France. You can't pay silly wages unless you show how you're funding it. Basically the fit and proper test repeated every year.
Failure to deliver business plan or unable to prove funding = automatic relegation as it France. Here Bury ignored the fit and proper test but the EFL not only let them do it but ratified their promotion.
I really dont know why he doesnt suggest a Salary Cap based on a club's turnover?
Of course it means that a Charlton will be able to spend more than an Accrington because we get more fans, because we've got a damned good Academy etc. It also stops a similar sized club like Salford from bullying their way past clubs like his.
Although I imagine there are enough smaller clubs who would be against doing that themselves as it doesnt create enough of a level playing field in League One, especially when more and more historic clubs are getting relegated from the Championship
I don't have a problem with what Salford are doing, and I've always seen FFP as a way to load competitions for established clubs.
The French model is the best, you get your license to play based on that business plan, it embeds PSG place, but that's French footballs problem that Marseille are a basketcase, and Nice aren't doing it
The other thing is that Andy Holt has done a great job with Accrington but he's a millionaire who saved the club when it was about to go out of business. Nothing wrong with that but it seems it's OK that Accrington have a sugar daddy when it suits them and allows them to play at the highest level ever (since the new club were formed in 1968).
Fleetwood are similar in having a rich owner who has taken them from very minor leagues in 1997 to league one.
Now it appears that both owners want a much more controlled investment regime than was in place when they took over.
As for Salford, yes they pay a lot more then they generate from the gate but that is the same for many clubs. As long as it is not putting the long term existence of the club at risk, as at Leeds in the 90s, then let it continue.
The salary cap was like using a sledgehammer to fix a delicate Swiss watch.
Comments
The absence of this version of the salary cap makes how much difference to Charlton's/anybody's wages budget in League 1. They're all still constrained to 60% of Turnover (that's income, revenue from all sources). All Charlton has had for 12 months is the money from EFL. Match day income is effectively nil. Charlton's commercial income is among the lowest in the division. The twunt saw to it that CAFC as a commercial concern was stunted and increasingly isolated from all sorts of revenue streams.
TS might be our wealthiest and most enthusiastic owner for a dozen years or so but 60% of fuck all still don't amount to lucrative contracts for promising players.
Nonetheless now might be the moment to secure Stockley and Shinnie(?) on permanents and offer decent contracts to some we'd like to hang on to.
All sporting bodies seem to be totally piss poor. I can't actually think of a good one.
They are a paragon of what a sporting body should be.
It will help Thomas as income can come into the club from outside his direct pockets; brings revenue into the club; and unlike Everton’s USM Finch Farm, the marketing value to a medical devices company active in the UK market will be more useful than that to a Russian holding company, and therefore clearly demonstratable as being at arms-length market value
Apparently Gary Neville forced Bury and Notts County to spend too much money. As hot takes go...
It's a race to the bottom for the larger/more aspirational clubs and arguably puts pressure on smaller clubs to spend more.
The concept was fatally flawed from Day 1. Thanks to a host of self-interested parties who believed they would benefit and the EFL's standard incompetence well summarised by @Henry Irving above, 48 clubs have been spending the last 6 months constructing their squads to live by a rule that should never have been implemented in the first place.
Will be interesting to see if anyone wants to have a pop at a claim.
Early this week an eminent independent arbitration tribunal upheld the claim brought by the Professional Footballers’ Association (PFA), the players’ union, that the EFL had breached its legal obligations by introducing a salary cap in League One and League Two in August last year without the agreement of, or consultation with, the PFA.
The case is significant because, in the tradition of cases brought by other players asserting their rights such as George Eastham in 1963 and Jean-Marc Bosman in 1995, it has led to the EFL changing its rules, as it immediately scrapped the first salary cap in European football.
The EFL — like the Premier League, the FA and the PFA — is party to the Professional Football Negotiating and Consultative Committee (PFNCC), a collective bargaining agreement under trade union law. The PFNCC constitution requires that “no major changes to the regulations of the leagues affecting a player’s terms and conditions of employment shall take place without full discussion and agreement in the PFNCC”. When the EFL decided to introduce a salary cap, it refused to consult with, or obtain the agreement of, the PFNCC.
The salary cap is no more and the EFL’s prospects of bringing in another controversial cap in the Championship look unlikely. But everyone in football agrees that there needs to be a functioning system of financial controls to stop clubs that overspend becoming insolvent — as happened with Bury in 2019.One of the problems with the salary cap was that it prevented clubs who could afford to pay higher salaries than others from doing so. A club with income five times that of another was forced to pay the same wages as the smaller club, limiting competition between clubs and driving players’ wages down to the minimum.Such a cap is incompatible with the pyramid structure of English football, which encourages clubs to try to achieve promotion and then compete in higher leagues. It is incompatible with a transfer system in which clubs can buy and sell players at whatever price they choose. That is why most sports that operate successful salary caps, mainly in the United States, have closed leagues, without promotion and relegation, and do not operate a transfer system. US salary caps are also the product of collective bargaining with players’ unions.Financial controls that limit the amount a club can spend compared with their income make more sense, but two major problems arise here too. First, the EFL’s rules in the Championship limit club owners from investing in clubs by treating such investment as debt. That acts to discourage investment in football when it is most needed, encourages clubs to seek loopholes and means far too many clubs breach the rules.The second problem is the opposite one — the old salary cost management protocol rules in League One and Two, which limited spending on player wages to a percentage of turnover, did allow owners to invest but failed to put in place appropriate rules and procedures to prevent an owner from “turning off the tap” and allowing a club to go under.The best outcome from the salary-cap case will be for all the football stakeholders, from clubs and the players’ union in each of the leagues, to engage in consultation to create new financial rules that encourage investment, secure the long-term future of clubs and can be fairly enforced. Such a process should be linked with a fairer distribution of football revenues throughout the leagues. The window of opportunity is open; the football industry and fans can only hope it is not closed by a rush to bring in new rules without proper thought or consultation.•Nick De Marco, QC, along with Ravi Mehta of Blackstone Chambers (instructed by Mills & Reeve), represented the PFA in the salary-cap case.We'll never know if it would have saved Bury but it certainly would have helped rather than been a hindrance.
The problem with the current status quo is you can have an owner who can inject funds if they wish to enable the club to run at a major loss, i.e. signing players and paying salaries far greater than the clubs income.
That all sounds fine, until the owner stops putting in those funds, you generally then have a club losing millions as you can't immediately cancel all contracts and break even, in essence that's what happened to Bury, their outgoings far exceeded their income and the then owners weren't prepared to fund the difference. Ultimately then a club is busted.
An adaption of the current rule could happen where an owner who wishes to inject cash and run at a loss over and above a certain level has to fund the club not just for the next month or six months but for a set period, say three years (just an example).
As a result they had to defend this arbitration.
Any decent administration would have strongly pointed out at the time that any significant change would need PFA approval and to put it in hold until such approval was gained.
But no, they didn't do that.
Like waiting for the child to stick it's hand in the fire before warning them it burns.
All investment as equity, no debt. Spend what you like owner but you can't call it a loan and get it back
Fully costed business plans every summer as in France. You can't pay silly wages unless you show how you're funding it. Basically the fit and proper test repeated every year.
Failure to deliver business plan or unable to prove funding = automatic relegation as it France. Here Bury ignored the fit and proper test but the EFL not only let them do it but ratified their promotion.
Of course it means that a Charlton will be able to spend more than an Accrington because we get more fans, because we've got a damned good Academy etc. It also stops a similar sized club like Salford from bullying their way past clubs like his.
Although I imagine there are enough smaller clubs who would be against doing that themselves as it doesnt create enough of a level playing field in League One, especially when more and more historic clubs are getting relegated from the Championship
The French model is the best, you get your license to play based on that business plan, it embeds PSG place, but that's French footballs problem that Marseille are a basketcase, and Nice aren't doing it
Fleetwood are similar in having a rich owner who has taken them from very minor leagues in 1997 to league one.
Now it appears that both owners want a much more controlled investment regime than was in place when they took over.
As for Salford, yes they pay a lot more then they generate from the gate but that is the same for many clubs. As long as it is not putting the long term existence of the club at risk, as at Leeds in the 90s, then let it continue.
The salary cap was like using a sledgehammer to fix a delicate Swiss watch.