| Releasing Players 09:11 - Jul 25 with 1154 views | IpswichRising |
If you release a current player and pay his contract up does that count towards the salary cap? |  | | |  |
| Releasing Players on 09:20 - Jul 25 with 1100 views | clive_baker |
Not to be a pedant but there's no 'salary cap' per se anymore. There was a time when L1 clubs could ony spend a maximum of £2.5m per year on wages, which has been done away with. The rule now is that clubs can only spend a maximum of 60% of turnover, so in theory salaries are unlimited and for each additional £1 of turnover we can spend a further 60p of wages. Only mentioning that as it is a subtle but significant change, especially as owners can inject cash that counts towards the turnover figure for the purposes of this calculation. So in theory if you're £600k over the salary % they can chuck £1m in and bring it in line.
Re. paying up a contract yes I would assume it still counts. |  |
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| Releasing Players on 09:46 - Jul 25 with 1002 views | xrayspecs |
Yes
Same comment about salary cap as earlier poster. | | | |
| Releasing Players on 11:37 - Jul 25 with 870 views | HighgateBlue |
| Releasing Players on 09:20 - Jul 25 by clive_baker |
Not to be a pedant but there's no 'salary cap' per se anymore. There was a time when L1 clubs could ony spend a maximum of £2.5m per year on wages, which has been done away with. The rule now is that clubs can only spend a maximum of 60% of turnover, so in theory salaries are unlimited and for each additional £1 of turnover we can spend a further 60p of wages. Only mentioning that as it is a subtle but significant change, especially as owners can inject cash that counts towards the turnover figure for the purposes of this calculation. So in theory if you're £600k over the salary % they can chuck £1m in and bring it in line.
Re. paying up a contract yes I would assume it still counts. |
Sorry to be even more of a pedant, assuming the SCMP rules remain the same as for 2021/22, in short we can use 100% of cash injections on wages, and not merely 60%. This appears to be a common misconception.
There is a distinction between the "Club's Relevant Turnover" and the "Football Fortune Income". You can use 60% of the former towards Player Related Expenditure but the full 100% of the latter.
By para 1.2 of Appendix 5 Part 2, a Club's Player Related Expenditure may not exceed the SCMP Requirement. The SCMP Requirement is the aggregate of 60% of the "Club's Relevant Turnover" and 100% of the "Football Fortune Income". Appendix A to Part 2 of Appendix 5 to the EFL Regulations defines "Club's Relevant Turnover" and "Football Fortune Income".
"Football Fortune Income" includes cash injections and equity injections (see paras 2.6 and 2.7 of the definition in Appendix A). We can use 100% of any such sums towards wages, not merely 60%. So the recent £14m received in respect of the share issue could, if the club wanted, be used ENTIRELY on salaries. (Salaries are, as you would expect, part of Player Related Expenditure at para 4 of Appendix B).
Last season's regulations are at the link below. This season's regulations SHOULD be on the EFL website, but nobody apart from me seems to have noticed that Appendix 5 stops after Part 1 (i.e. it only contains the championship rules and not league one).
https://www.efl.com/contentassets/b3cd34c726c341ca9636610aa4503172/regulations-s |  | | |
| Releasing Players on 11:53 - Jul 25 with 828 views | clive_baker |
| Releasing Players on 11:37 - Jul 25 by HighgateBlue |
Sorry to be even more of a pedant, assuming the SCMP rules remain the same as for 2021/22, in short we can use 100% of cash injections on wages, and not merely 60%. This appears to be a common misconception.
There is a distinction between the "Club's Relevant Turnover" and the "Football Fortune Income". You can use 60% of the former towards Player Related Expenditure but the full 100% of the latter.
By para 1.2 of Appendix 5 Part 2, a Club's Player Related Expenditure may not exceed the SCMP Requirement. The SCMP Requirement is the aggregate of 60% of the "Club's Relevant Turnover" and 100% of the "Football Fortune Income". Appendix A to Part 2 of Appendix 5 to the EFL Regulations defines "Club's Relevant Turnover" and "Football Fortune Income".
"Football Fortune Income" includes cash injections and equity injections (see paras 2.6 and 2.7 of the definition in Appendix A). We can use 100% of any such sums towards wages, not merely 60%. So the recent £14m received in respect of the share issue could, if the club wanted, be used ENTIRELY on salaries. (Salaries are, as you would expect, part of Player Related Expenditure at para 4 of Appendix B).
Last season's regulations are at the link below. This season's regulations SHOULD be on the EFL website, but nobody apart from me seems to have noticed that Appendix 5 stops after Part 1 (i.e. it only contains the championship rules and not league one).
https://www.efl.com/contentassets/b3cd34c726c341ca9636610aa4503172/regulations-s |
That's interesting, thanks Highgate, I wasn't aware of that. So the end of year true up need only be to the absolute £ value of the overspend, rather than sufficient injection to maintain the 60% figure. E.G.
£10m T/O
£7m wages
That's 70% Wages : T/O, or £1m overspend relative to relevant t/o. That would require £1.67m injection to T/O to bring that down to 60%. However under these rules it's just the £1m offset against wages. | |
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| Releasing Players on 12:35 - Jul 25 with 714 views | HighgateBlue |
| Releasing Players on 11:53 - Jul 25 by clive_baker |
That's interesting, thanks Highgate, I wasn't aware of that. So the end of year true up need only be to the absolute £ value of the overspend, rather than sufficient injection to maintain the 60% figure. E.G.
£10m T/O
£7m wages
That's 70% Wages : T/O, or £1m overspend relative to relevant t/o. That would require £1.67m injection to T/O to bring that down to 60%. However under these rules it's just the £1m offset against wages. |
Yes that's right. I don't know whether any significant transfer fees are intended, or what our turnover is likely to be for the year, and I do appreciate that the Club has many any varied running costs, but the £14m injection from the share issue must indicate some serious intent as regards wages.
It seems to me that the SCMP rules are more intended to ensure some semblance of sustainability rather than trying to create a level playing field between clubs. It allows massive benefaction in a way that FFP rules (at least if they operate as intended) would not. | | | |
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