A salary cap is expected to be introduced at £1.5m in League Two and £2.5m in League One, which you can see below will penalise football clubs with far greater revenues in League One, such as Sunderland, Portsmouth and Ipswich Town. Unfortunately, the vote has now been delayed by another week, until 6th August.
Speaking on Twitter yesterday, Imps Chairman Clive Nates said: “We were in favour of the salary cap concept but absolutely share the outrage in the way the EFL is handling the process allowing the chancers to benefit.
A 30 June cut off date set out in the original documentation was emphatically reaffirmed at the 10 July meeting of L1 clubs.”
Below is a post from one of our members, Gaz_Imp:
Something needs to change.
I am not convinced a straight forward salary cap is all that’s needed though. Let’s say we have 3 clubs:
Accrington: Revenue £2 million
Lincoln: Revenue £4 million
Sunderland: £8 million
Made those revenue figures up for those clubs, but you get the idea. Let’s say a wage cap is introduced of £3.5 million.
Your mid-sized League One club, us in the case, could probably go close to that cap and be able to survive.
But your smaller club, in this case Accrington, well they can’t afford it. But actually, I fear what a cap could do here is give them an incentive to gamble. ‘Big clubs can only spend £3.5 million, we’ve got a good manager we believe in, let’s borrow £1.5 million, match the big clubs and go for it!’ – therefore I think there should be a set cap plus a maximum % of revenue that can be spent, whichever is less. For example, if we said a cap £3.5 million or 80% of revenue, whichever is least, this would stop this potential problem. In that case Accrington could not spend more than £1.6 million.
But then what about Sunderland in this example? They are being penalised for generating a lot of revenue which is there’s to spend really. Perhaps we should just say clubs can spend 80% of revenue? But we have seen how this can be manipulated, for example through owners paying in sponsorship money. So again, I think something different should be done here. Again, not using exact figures, more informed people would need to decide on actual figures, but I think something like this would work this way: ‘A wage cap of £3.5 million plus 25% of revenue over £5 million’. This means clubs who generate plenty of revenue see some sort of reward in their playing budget. But if owners want to try and find loopholes to put revenue in to their club, well they can, but would need to put in a million to generate 250K in the playing budget.
So overall a wage cap with two provisions:
1. A maximum of 80% of revenue can only be spent where this is less than the wage cap.
2. Where a clubs revenue exceeds a certain amount they can spend a certain percentage of this in addition to the wage cap.
There is then still a lot to think about in terms of relegated clubs!
You can discuss this post on 100% Imps HERE!
More views following this post:
hulloutpost: “You make some valid points especially in theory. Unfortunately in practice don’t we already have something based around percentage income that some clubs get around by for example dubious ground sales. I believe the drive towards a fixed amount whilst far from ideal may be more about making it transparent, fixed criteria and easier to police.”
Scotimp: “So what do the likes of Sunderland do with the huge surplus income generated?
If they have an average home gate of 30,000 paying, say, £12 per head, that generates around £360,000 per game; that equates to £8.3 million per season from gate money alone, without taking sponsorship and other commercial income into account. A salary cap of £2.5 million could leave them with an extra £7.5 million in income that they are unable to use. That renders 75% of their support base financially irrelevant.
There has to be a link to income, surely? I cannot see any way this can work otherwise.”
Huntsward: “I assume those with a surplus would spend it on improving infrastructure, facilities, better managers and coaching staff, sports science, scouting, youth and academies, etc. Perhaps some form of work around would involve providing better accommodation for players, education for their kids, happy wife happy life. This could make the difference in the quality of player willing to sign whilst maintaining a level playing field with regards to wages. I don’t see a problem with that. The richer clubs should be entitled to make use of their financial advantage whilst ensuring that all clubs are able to compete and most importantly survive within their means, which is surely the main objective of introducing a salary cap.”
Scotimp: “Taking the Sunderland example further, let’s apply the same process to other clubs using £12 per head (which is an arbitrary figure based upon the £11 per head Lincoln quoted a few years ago). Remember this is league games only – any income from cup ties and commercial activities would be in addition.
The lowest average attendance in L1 last season was 2,862 at Accrington. The figure of £12 per head gives gate income of £790,000 per season. That is well below the proposed salary cap, so would a club of that size be encouraged to live beyond its means in order to compete? Probably not Accrington because of its ownership, but lots of others would be tempted.
So the best-supported club in League One (Sunderland) generates £8.3 million in gate receipts and the worst supported club (Accrington) £790,000 using our £12 per head assumption.
At what point does a club’s average attendance equate to the proposed £2.5 million cap?
The answer is 9,057. Lincoln’ average attendance in L1 last season was 8,985 – just 72 below that proposed cap. So would Lincoln be affected by the imposition of that cap? We don’t know, because we have no idea what Lincoln’s salary expenditure was last season, but their average attendance generates £2.48 million at £12 per head.
There were 17 clubs in L1 last season with lower average attendances than Lincoln, so does that suggest that only 5 clubs would be adversely affected by a salary cap set at £2.5 million? If so, what is the point? In my experience, it is not the likes of Ipswich and Sunderland in danger of folding – it is the smaller clubs with average income well below that £2.5 million.
On that basis, it would appear that a salary cap of £2.5 million basically means ‘business as usual’ for the majority of clubs. That may indicate why there are only a few dissenting voices in L1 – probably Sunderland, Ipswich and Portsmouth because they would be the only clubs affected by it.”
If you haven’t already had a go at our quizzes, this is a great way to learn some random information about the Football Club, as well as helping us generate much-needed page views: Quiz No.1, Quiz No.2, Quiz No.3, Quiz No.4, Quiz No.5, Quiz No.6, Quiz No.7, Quiz No.8, Quiz No.9, Quiz No.10, Quiz No.11, Quiz No.12, Quiz No.13, Quiz No.14, Quiz No.15, Quiz No.16, Quiz No.17, Quiz No.18, Quiz No.19, Quiz No.20, Quiz No.21, Quiz No.22, Quiz No.23, Quiz No.24, Quiz No.25, Quiz No.26, Quiz No.27 and Quiz No.28.
— Vital Lincoln City (@VitalLincoln) July 25, 2020