EFL Salary Cap

[RientO]

https://www.thetimes.co.uk/article/efl- ... -twl5c0hgh

Unlikely to affect Os (I guess) but wonder how this would work when teams get relegated? Would there be different caps in different divisions? Would players have to take wage cuts when relegated?

Good idea in principle, but not sure how it would work in practice. Pretty sure there would be some creative ways of paying players.

[slacker]

That article is paywalled for me.

The current EFL L2 FFP rules are the salary cap management protocol (SCMP) regulations shown on their website (part 4 of this doc - about 3/4 of the way down)
https://www.efl.com/-more/governance/ef ... gulations/

Basically, total player wages are capped at 50% of operating turnover plus 100% of total other eligible income. But we still see club’s getting into debt with loans secured against assets.

I’d be intrigued to know what current FL1&2 clubs are debt free and make a profit. Not many, I reckon. Apart from Bury & Bolton there’s plenty of other EFL clubs flying far too close to the wind.

[Rich Tea Wellin]

Also, i guess that you get some sort of parachute payment when you get relegated in order to help with players on bigger wages.

[spen666]

There are legal problems with putting a cap on individual players salaries eg saying no L2 player can earn more than £x

The FFP rules are an attempt to bring in fiscal controls without breaching the laws re restraint of trade etc by individual salary caps.


As I have said before, I am not an employment law specialist and don't know the inns and outs of this topic of law.



Clubs Debt Free? I doubt there are many, even those making profits as loans will be needed for major capital expenditure in the same way we need mortgages to buy our houses, but may otherwise be debt free

[RientO]

I’d be intrigued to know what current FL1&2 clubs are debt free and make a profit.

Sorry about paywalled link. It was also discussed on ITN https://www.itv.com/news/2019-08-22/bur ... terialise/

While the Premier League is highly lucrative, the Championship, League 1 and League 2 lost a combined £411 million in the year 2017-2018, according to Deloitte analysis.

About 1m 15s into video the total annual pre-tax losses for all clubs in League One was around £80m and League Two was only £10m (which surprised me, expected it to be closer to League One). For Championship clubs it was a eye-watering £320m. And that doesn't mention the levels of debt some of these clubs have.

[spen666]

I’d be intrigued to know what current FL1&2 clubs are debt free and make a profit.

Sorry about paywalled link. It was also discussed on ITN https://www.itv.com/news/2019-08-22/bur ... terialise/

While the Premier League is highly lucrative, the Championship, League 1 and League 2 lost a combined £411 million in the year 2017-2018, according to Deloitte analysis.

About 1m 15s into video the total annual pre-tax losses for all clubs in League One was around £80m and League Two was only £10m (which surprised me, expected it to be closer to League One). For Championship clubs it was a eye-watering £320m. And that doesn't mention the levels of debt some of these clubs have.

Those debts need to be put into the context of clubs income.

For example someone earning £1 million pounds per year and having debt of £1m is in a better financial position than someone earning £25,000 with a debt of £100,000. So although the debt is 10 times more, they are in less financial trouble than the lower earner with lower debts