Clubs Vote in Favour of Salary Cap
Friday, 7th Aug 2020 14:02
League One and Two clubs have voted in favour of introducing the EFL's salary cap proposal.
The Blues were one of the sides to speak out against the initiative which will see League One wages limited to £2.5 million.
It's understood seven clubs voted against the proposal and one abstained with 16 in favour. Nine would have been enough to prevent the required two-thirds majority. Town, Portsmouth, Sunderland, Hull City, Charlton, Wigan, Doncaster and Oxford were the clubs understood not to be keen on the initiative prior to the vote.
An EFL statement reads: “Clubs in League One and League Two have today voted for the introduction of new financial controls in the form of ‘Squad Salary Caps’ into their respective divisions which take effect immediately.
“The decision follows extensive and comprehensive consultation with all clubs in respect of addressing sustainability and wage inflation issues across the EFL which were initiated prior to the suspension of football in March following the Covid-19 outbreak and have continued during the course of the summer.
“Those discussions culminated in today’s divisional vote, with representatives of League One and League Two clubs opting to implement the new measures in place of the existing Salary Cost Management Protocols (SCMP), with fixed caps of £2.5 million and £1.5 million respectively.
“Discussions continue with Championship clubs in respect to amendments to their own financial controls.
“League One and Two clubs are also going to continue discussions towards the introduction of additional measures aimed at addressing club financial sustainability.
“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.
“Payments directly linked to a club’s progression in cup competitions or promotion are excluded from the cap, while any income generated from players going out on loan is deducted from the club’s salary cap calculation.
“Transition arrangements have been incorporated in respect of a club’s squad salary cap calculation with the key element of these aimed at addressing committed contracts and relegated clubs.
“Any contract entered into on or prior to today’s vote will be capped at an agreed divisional average until that contract expires.
“Moving forwards, clubs that are relegated will be permitted to cap all contracts at the divisional average prior to the club’s relegation until those contracts expire.
“An ‘overrun’ concept is also included if a club’s total squad salary payments exceed the cap by up to 5 per cent, whereby dependent on the percentage level of the overrun, a financial penalty [reportedly £3] would be payable for every £1 in excess.
“Clubs exceeding the ‘overrun’ would be referred to an Independent Disciplinary Commission, although the EFL will monitor the cap on a real-time basis throughout the season as is the current position with SCMP measures across the two divisions.
“Where breaches do occur, sanction guidelines are in place to be considered as appropriate by an independent Disciplinary Commission.”
Commenting on the decision, EFL CEO, David Baldwin said: “The term ‘salary cap’ is an emotive one, creating the impression of a restrictive measure but we are clear in our view that this is neither the objective nor the likely effect of these changes to EFL regulations.
“The financial impact of Covid-19 will be profound for EFL clubs and today’s vote will help ensure clubs cannot extend themselves to the point that could cause financial instability.
“Over the last two weeks the discussions amongst clubs in both Leagues One and Two have been healthy and constructive, allowing us to reach a clear consensus today and I am pleased that the clubs have determined to adopt the new approach.
“We will now work with all clubs, the PFA and, where appropriate, other stakeholders to implement the new rules and continue our efforts to bring long-term sustainability to the EFL.”
The Blues are among the League One clubs most hit by the cap. In their last season in the Championship Town's overall wage bill was £18.95 million with player wages understood to have made up around £11-£12 million of that figure.
After relegation, many players’ salaries dropped as a result of clauses in their deals, by as much as 60 per cent in some cases, however, the player wage bill is almost certainly still more than double, perhaps three times higher than the limit and will be one of the largest in the division.
It’s understood the wages of players aged under 21 wouldn’t count towards the £2.5 million figure, while squad sizes will ultimately be limited to 20 senior players aged over 21 after a period of transition with eight of those homegrown.
Town’s general manager of football operations Lee O’Neill told TWTD last month that he was no fan of the cap which he says will hamper owner Marcus Evans’s ability to inject cash into the Blues.
“I understand why it’s on the table and why clubs are looking at it and it brings to light the financial implications around football at the moment and trying to level the playing field from a financial aspect,” he said.
“From an ownership point of view, if you have that luxury of having an owner that is willing to or able to invest more money into the club because he wants to, this obviously reduces the ability to be able to do that and that I don’t think is fair.
“I think Financial Fair Play was put in place to look at those elements, to help the clubs who are big clubs with big fanbases, and that can economically work for most clubs if it’s adhered to. We’ve stuck to that, we’ve definitely adhered to the Financial Fair Play stuff.
“The salary cap has got to be voted through and it’s something that is being talked about. I’m not necessarily a big fan of it for obvious reasons.”
Meanwhile, former Blues right-back Josh Emmanuel, 22, has joined Hull City having been released by Bolton Wanderers at the end of last season.
Photo: Action Images
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