Argyle not in favour of a salary cap

[cheshiregreen]

Salary caps to start immediately!
In effect clubs with large crowds and generate more revenue are penalised.

Promotion bonus payments are excluded so I would imagine player contracts would be incentivised, as Lowe has done with the new signings.
I suppose the spare money we have now could be spent on the Academy?

EFL statement

Based on a squad of 25 players that equates to £100,000 per player. Not a bad salary.

The inclusion of agent fees much cause a bit of concern for some Clubs.

Is it 2.5m Gross or net? Does it include employers NI etc?

Suspect this cap will present Sunderland with some challenges.

 

[cheshiregreen]

Salary caps to start immediately!
In effect clubs with large crowds and generate more revenue are penalised.

Promotion bonus payments are excluded so I would imagine player contracts would be incentivised, as Lowe has done with the new signings.
I suppose the spare money we have now could be spent on the Academy?

EFL statement

Based on a squad of 25 players that equates to £100,000 per player. Not a bad salary.

The inclusion of agent fees much cause a bit of concern for some Clubs.

Is it 2.5m Gross or net? Does it include employers NI etc?

From the statement

When calculating total salary spending, the ‘cap’ includes:

Basic Wages;
Taxes;
Bonuses;
Image rights;
Agents’ fees and;
Other fees and expenses paid directly or indirectly to all registered players

 

[Joe Totale]

This is unbelievable. Salary caps are designed to ensure clubs don't spend beyond their means, yet how will this stop imposter clubs like Fleetwood and Salford from doing that? They'll be delighted with this news as it's given them the green light to continue their inorganic spending.

If the news stories were to be believed, Salford were spending close to £2 million a year on wages in the Conference. Their spending has gone mad since then on players such as James Wilson and Bruno Andrade so you'd hope that this wage cap will have a big impact on them.

That's if it's actually enforced, we shall wait and see.

 

[WoodsyGreen]

This is unbelievable. Salary caps are designed to ensure clubs don't spend beyond their means, yet how will this stop imposter clubs like Fleetwood and Salford from doing that? They'll be delighted with this news as it's given them the green light to continue their inorganic spending.

If the news stories were to be believed, Salford were spending close to £2 million a year on wages in the Conference. Their spending has gone mad since then on players such as James Wilson and Bruno Andrade so you'd hope that this wage cap will have a big impact on them.

That's if it's actually enforced, we shall wait and see.

True, though nowhere near as big an impact if their spending had to be capped to a percentage of organic turnover.

I'd love to see Neville trying to sign decent players on 50% of a 2,500 gate.

They'd go straight back to where they came from.

 

[Quinny]

I don’t understand this cap at all, why didn’t they just better enforce the existing rules by which you couldn’t spend more than a certain percentage of income on wages?

Because clubs will always look to find ... colourful ... ways to circumvent the rules, especially when it comes to the definition of "income". It's easier to set a salary cap (although, personally, I can see it ending up in the courts and ultimately being scrapped).

 

[Brixton 'ill Pilgrim]

This is unbelievable. Salary caps are designed to ensure clubs don't spend beyond their means, yet how will this stop imposter clubs like Fleetwood and Salford from doing that? They'll be delighted with this news as it's given them the green light to continue their inorganic spending.

There's maybe one or two plastic clubs that fall into this category in the lower leagues. It's annoying but it's not an endemic problem that threatens the existence/integrity of lower league football.

By contrast, the number of clubs unsustainably exceeding the £2.5m cap is an existential issue.

Argyle ourselves were on the edge of oblivion a few years ago . We're currently losing money hand over fist and are living on borrowed time before Simon Hallett's final cash injection runs out.

A fixed cap enables us to get ourselves into a sustainable position without disadvantaging ourselves relative to our competitors (because they'll also be having to comply with the new rules). A cap as a proportion of revenue would be better in a perfect world but in reality it's totally unenforceable. Look how ineffective 'financial fair play' has been in UEFA competition.

 

[Joe Totale]

I don’t understand this cap at all, why didn’t they just better enforce the existing rules by which you couldn’t spend more than a certain percentage of income on wages?

Because clubs will always look to find ... colourful ... ways to circumvent the rules, especially when it comes to the definition of "income". It's easier to set a salary cap (although, personally, I can see it ending up in the courts and ultimately being scrapped).

Yep. Man City are a great example of exploiting the loopholes present in financial fair play. The recent successful appeal by Man City means that they and other clubs will carry on exploiting the loopholes.
A salary cap is a lot easier to enforce in theory.

Doing some fag packet maths, I doubt Argyle would have spent £2.5m a year on wages anyway. A club like Sunderland will have serious issues though.

 

[Brixton 'ill Pilgrim]

There's an interesting twitter thread here, mainly about Sunderland FC but providing a lot of information about the finances of League 1 clubs in 2018/19 (when Argyle were in the division).

https://twitter.com/SwissRamble/status/ ... 6812804096

Two immediate insights:

1) Almost every team in the division would have to massively reduce their wage bill to comply with a £2.5m cap (even if the wage figures in the thread cover all employees, not just the first team squad, and include pay items that don't count towards the cap)

2) A cap based on a proportion of revenue would benefit Argyle if we have higher revenue than at least half the teams in the division but that's far from certain, despite our higher crowds. Walsall and Burton, for example, generate nearly £4m each in commercial income (eg sponsorship or conferencing and banqueting), the second and third highest totals in the division and more than three times their gate receipts.

 

[Quinny]

A club like Sunderland will have serious issues though.

As I understand it, the fag-packet maths is based on an average per week salary. For those on existing contracts which are in excess of that then, for now, they would not be penalised for being in breach of that: their salaries are virtually capped at the upper limit. It would come an issue when those contracts are due for renewal, though...

 

[Tugboat]

PFA have declared the proposal as unlawful.

 

[Ottawa Green]

Here in the USA and Canada, most of the major sports leagues have salary caps, and they are strictly enforced by the leagues, each year they adjust the salary cap, up or down, the cap is based on TV money, advertising, attendance, etc.

 

[PL2 3DQ]

There's an interesting twitter thread here, mainly about Sunderland FC but providing a lot of information about the finances of League 1 clubs in 2018/19 (when Argyle were in the division).

https://twitter.com/SwissRamble/status/ ... 6812804096

Two immediate insights:

1) Almost every team in the division would have to massively reduce their wage bill to comply with a £2.5m cap (even if the wage figures in the thread cover all employees, not just the first team squad, and include pay items that don't count towards the cap)

2) A cap based on a proportion of revenue would benefit Argyle if we have higher revenue than at least half the teams in the division but that's far from certain, despite our higher crowds. Walsall and Burton, for example, generate nearly £4m each in commercial income (eg sponsorship or conferencing and banqueting), the second and third highest totals in the division and more than three times their gate receipts.

The facilities in the new grandstand would also help us to generate income and revenue 7 days a week from conferencing and banqueting so it seems we are being penalised twice by this salary cap, 1 for having large crowds and 2 for having good facilities to generate commercial income.
Success/promotion under the salary cap system will come from good coaching and (eventually) a good academy.

 

[HC Green]

There's an interesting twitter thread here, mainly about Sunderland FC but providing a lot of information about the finances of League 1 clubs in 2018/19 (when Argyle were in the division).

https://twitter.com/SwissRamble/status/ ... 6812804096

Two immediate insights:

1) Almost every team in the division would have to massively reduce their wage bill to comply with a £2.5m cap (even if the wage figures in the thread cover all employees, not just the first team squad, and include pay items that don't count towards the cap)

2) A cap based on a proportion of revenue would benefit Argyle if we have higher revenue than at least half the teams in the division but that's far from certain, despite our higher crowds. Walsall and Burton, for example, generate nearly £4m each in commercial income (eg sponsorship or conferencing and banqueting), the second and third highest totals in the division and more than three times their gate receipts.

The facilities in the new grandstand would also help us to generate income and revenue 7 days a week from conferencing and banqueting so it seems we are being penalised twice by this salary cap, 1 for having large crowds and 2 for having good facilities to generate commercial income.
Success/promotion under the salary cap system will come from good coaching and (eventually) a good academy.

Even with ‘big crowds’ Argyle have been losing money, even before the pandemic , so maybe the salary cap is a good thing for Argyle

 

[davie nine]

I am sure that, during the short period from 1st January to ‘lockdown’, our income would have made the owner and Board feel optimistic that the club’s stated aim to become self sustainable was making solid progress.

 

[Drake]

The other significant impact of this is that it makes it far more difficult for teams going up into the Championship to be competitive. It’s a stealth way of effectively closing off the top two divisions and paves the way for a Premier League 2.