Next Season and Salary Caps

ONIGP

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Just to address a point directly, why would Accrington be less able to bridge the gap to the Championship ? They would have built up reserves in League One due to lower wage levels which would actually make it easier to bridge the gap. As it stands, they are in no position to even compete for the players to give them a chance to challenge for promotion.

A salary cap would reward clubs that are stable and well run, not simply those that have the biggest pockets.
Because the size of the club and its revenues (largely driven by attendances) would make it impossible to build up a sufficient reserve to move from a £2.5m wage bill to one that would be required to compete in the Championship. The likely result would be a promotion followed by immediate relegation.
 
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No I am understanding the impact of a fixed cap. I agree with you that that the advantage of a Sunderland and Portsmouth would be reduced. Why should they be? Why should a large club with a large fan base and large revenues have their advantages removed? This is financial engineering of the worst kind. How can a rise through the divisions work when there is likely to be such a gulf between salaries paid to L1 and Championship players? I'm afraid that a ceiling is effectively created between the 2.

Small, well-run clubs do not need a salary cap by definition. It is the management of poorly-run clubs (whether large or small) that needs to be addressed.

The maximum wage was removed for good reasons. Good businesses should be able to grow and thrive, as should the earning capabilities of all employees. Under these rules Norwood would have had no reason to leave us for Ipswich. Taking our parochial hats off, are we really saying that would have been a good thing?

I agree that FFP has not worked but this is a case of throwing the baby out with the bath water. More effort and regulation should be applied to improve it. In principle it makes sense and shouldn't be scrapped because the EFL are too incompetent to manage or administer it. There is so far to go with improving FFP before such a drastic action as fixed salary caps should be brought in.

A fixed salary cap follows the law of the lowest common denominator.
A large club with a large income is only disadvantaged if it falls way below its natural level, that is, if it is badly run. If it is well run it will be in the top two tiers competing with clubs of similar size.

If you accept that the maximum wage benefitted smaller clubs, then you surely also have to accept that enforced wage restraint now will also benefit smaller clubs.

I still don't see why League One clubs would be less able to compete in the second tier when their income would be completely unchanged. It is their cost base that will have been reduced.

The notion of a 'fairytale' rise through the divisions post Sky Sports does not exist. You either have a billionaire owner, or you don't. That is why reform is needed. Responsible ownership is not currently rewarded; financial recklessness is.

Regarding Norwood, he would have gone to a Championship club rather than Ipswich, which would actually both have benefitted him, and been more logical in terms of career progression.
 

bigmart

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Our chances of competing once in the Championship would probably be greater as we would have built up significant reserves in previous years due to a reduced wage bill. It is the expenses of lower division clubs that will be reduced, not their income. In any case, I think the introduction of a cap in League One would lead to a reduction of wages in the Championship in the long term, as clubs relegated from the second tier would face a points deduction if they went down with too high a wage bill.

Morecambe and Macclesfield would still be in a better position to compete under the new rules than they are now.

Your point about PJ really makes my argument for me. Under the status quo, unless you find a Russian billionaire lime Bournemouth, a small club will never reach the higher levels of the game.
but we had the benefit of the on money now other.clubs are benefiting too
 
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Because the size of the club and its revenues (largely driven by attendances) would make it impossible to build up a sufficient reserve to move from a £2.5m wage bill to one that would be required to compete in the Championship. The likely result would be a promotion followed by immediate relegatio
It is more difficult now to build up sufficient reserves to bride that gap, than it would be under the new proposal. Clubs are overstretched because of high wages and have few, if any, cash reserves, before they even reach the Championship. Under the new regime, they will in a more sustainable position when they go up.
 
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but we had the benefit of the on money now other.clubs are benefiting too
But football has changed and the sums required to reach that level are massive, and exclude the vast majority of small clubs.

When we were in the second tier, we were there with Port Vale, Grimsby, Crewe, Cambridge, Notts County... How many clubs of that size are up there now ?
 
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Jason Koumas / John Morrissey
For what it is worth, I don't think the salary cup would make a material difference to the gulf between the Championship and League One in terms of wages. The current average wage budget in the Championship is £17 million; in League One it is currently £4 million; with the cap it is £2.5 million, although that figure has not been confirmed.

In the long term I think some form of wage restraint in the second tier is also inevitable, as the current situation is unsustainable, with clubs spending over 100% of their income on wages.
 

ONIGP

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A large club with a large income is only disadvantaged if it falls way below its natural level, that is, if it is badly run. If it is well run it will be in the top two tiers competing with clubs of similar size.

If you accept that the maximum wage benefitted smaller clubs, then you surely also have to accept that enforced wage restraint now will also benefit smaller clubs.

I still don't see why League One clubs would be less able to compete in the second tier when their income would be completely unchanged. It is their cost base that will have been reduced.

The notion of a 'fairytale' rise through the divisions post Sky Sports does not exist. You either have a billionaire owner, or you don't. That is why reform is needed. Responsible ownership is not currently rewarded; financial recklessness is.

Regarding Norwood, he would have gone to a Championship club rather than Ipswich, which would actually both have benefitted him, and been more logical in terms of career progression.
The problem with your first comment is that it is being taken as a snapshot in time. Apart from the problems with the notion of "natural level", where a majority of clubs believe they are below their natural level, there are clubs in the top EFL tier who are only there because they are financially mismanaged. Isn't the biggest issue of the Wages : Revenue issue evident in the Championship? To automatically class a Sunderland (with regular 30k attendances) as being more poorly managed at this moment than a Championship club and reduce their opportunity to progress by an artificial financial measure is outrageous. I have chosen Sunderland randomly and not because I particularly understand their finances.

Yes, I accept that the maximum wage benefitted smaller clubs. However, I don't believe that they SHOULD be benefitted. More important than benefitting smaller clubs by artificial financial measures are the principles of supply and demand, and the opportunity for labour to be sold at its true worth. These are key reasons why maximum wages were abolished.

The reason some L1 clubs couldn't compete is exactly because their income would be unchanged. It would in many cases (excluding the "big" clubs") be insufficient to support the increase in costs required to be competitive. The whole idea of building up reserves is a very idealistic one. I suspect that there are a huge number of different financial/ownership models through the pyramid, not all of which would support the development of such reserves. There are certainly people who are into football as an investment and this would grow. There is a risk that the money is taken out of football as profit to owners and shareholders.

Your point about Norwood is valid if we believe he could have gone to a Championship club. It actually supports my point that it becomes more difficult for a player to improve his financial status without moving up a league if cap is in place. We are talking about people's livelihoods and restricting their ability to maximise their incomes.
 
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On your first point, I think it is widely accepted Sunderland have been mismanaged, which is why they are where they are.

The vast majority of clubs of similar size are in the top two divisions and would be unaffected by the proposal. The real impact of the change would not be to impede massive clubs like Sunderland, who are in a tiny minority in the bottom two divisions, but to restrain clubs like Salford, Mansfield and Forest Green, whose spending is entirely supported by debt or the wealth of one individual (or both).

You don't have to be a Marxist to believe that some levelling of opportunity between large and small clubs is a good thing after witnessing the gross inequalities that have developed in football since the creation of the Premier League. That levelling effect would only be within a division and would enhance opportunity, not deny it. The opportunity for progress would be open to pretty much any club based on the quality of management, not simply on wealth. Once at a higher level, they would then of course be in a position to spend more and attract higher quality players.

I am not sure I share your concern for the income levels of lower division footballers. They are still well paid by average standards and those of genuine ability will still get moves to clubs in the top two divisions and increased salaries. To flip your comment around, do you not think it is slightly absurd that Norwood was paid 8k per week to play Third Division football ? I don't begrudge him it, but it is indicative of how ridiculous wage levels have become in football. If he merited a place in a Championship team, he would be paid Championship wages.

Without wage restraint, clubs like ourselves will struggle to behave responsibly and compete. That is the bottom line that Palios clearly appreciates.
 
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To answer your comment about unsustainable spending in the Championship, yes, reform is needed there too and will probably arrive in the near future. Clubs will also be massively affected by the pandemic at that level.

However, their current inaction is not an argument for League One and Two clubs doing nothing and continuing to spend as if Covid 19 never happened.

Reform is incremental. One step at a time.
 

ONIGP

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On your first point, I think it is widely accepted Sunderland have been mismanaged, which is why they are where they are.

The vast majority of clubs of similar size are in the top two divisions and would be unaffected by the proposal. The real impact of the change would not be to impede massive clubs like Sunderland, who are in a tiny minority in the bottom two divisions, but to restrain clubs like Salford, Mansfield and Forest Green, whose spending is entirely supported by debt or the wealth of one individual (or both).

You don't have to be a Marxist to believe that some levelling of opportunity between large and small clubs is a good thing after witnessing the gross inequalities that have developed in football since the creation of the Premier League. That levelling effect would only be within a division and would enhance opportunity, not deny it. The opportunity for progress would be open to pretty much any club based on the quality of management, not simply on wealth. Once at a higher level, they would then of course be in a position to spend more and attract higher quality players.

I am not sure I share your concern for the income levels of lower division footballers. They are still well paid by average standards and those of genuine ability will still get moves to clubs in the top two divisions and increased salaries. To flip your comment around, do you not think it is slightly absurd that Norwood was paid 8k per week to play Third Division football ? I don't begrudge him it, but it is indicative of how ridiculous wage levels have become in football. If he merited a place in a Championship team, he would be paid Championship wages.

Without wage restraint, clubs like ourselves will struggle to behave responsibly and compete. That is the bottom line that Palios clearly appreciates.
I think we are going to have to agree to disagree on this one! I would absolutely support the enforcement of FFP and would 100% support a salary cap proportionate to revenue but find a flat salary cap abhorrent. I genuinely believe that such a move will be significantly more likely, not less, to usher in a kind of football world that I know you are passionately against. I find the speed at which a body, which is hardly known for its dynamism when it comes to introducing things for the betterment of the game as a whole, is looking to bring in such a major change highly disconcerting.
 
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The principle of supply and demand would still exist, because clubs in higher divisions would pay higher wages. In fact, clubs within divisions would still pay different wages, as not every wage budget would be identical. However, the market in football would be regulated, rather than the uber-Thatcherite free for all we have had for the last thirty years.
 
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I think we are going to have to agree to disagree on this one! I would absolutely support the enforcement of FFP and would 100% support a salary cap proportionate to revenue but find a flat salary cap abhorrent. I genuinely believe that such a move will be significantly more likely, not less, to usher in a kind of football world that I know you are passionately against. I find the speed at which a body, which is hardly known for its dynamism when it comes to introducing things for the betterment of the game as a whole, is looking to bring in such a major change highly disconcerting.
For all that I don't like or trust Parry, I think he is right on this issue and his motives are probably sound. Don't forget, he also wants parachute payments scrapped, which actually goes against the wishes of his biggest client group, the large Championship clubs.

Above all else, it is Palios's support for the plan that convinces me that it is the right one.
 
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have to agree with you on this the cap is needed and should be in the top two lgs as well when Championship clubs are spending twice as much as they bring in on wages no business can do that. I for one think its a great idea and the smaller squads to its a great idea to get more youth players involved. if the caps stop clubs going under and stupid clubs overspending then it's all good
 

ONIGP

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The principle of supply and demand would still exist, because clubs in higher divisions would pay higher wages. In fact, clubs within divisions would still pay different wages, as not every wage budget would be identical. However, the market in football would be regulated, rather than the uber-Thatcherite free for all we have had for the last thirty years.
Supply and demand is massively diluted. A large well managed club with 5 times as much revenue as a small well managed club should be able to incur 5 times as much cost. Their profit % will be identical. That is sufficient regulation and is where the effort should be placed. The issue is badly managed clubs and the solution can't be to restrict the ambitions of those that are well managed.
 

ONIGP

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Above all else, it is Palios's support for the plan that convinces me that it is the right one.
I am surprised that they are supporting it but it does have a number of benefits for them. If attendances and profits can be made in L1/L2 in the forthcoming years it protects the investment of both them and Santini and increases the likelihood of that investment growing and paying out benefits. For a well managed club that is happy to survive in L1/L2 it offers protection against the usurpers that you have mentioned (FGR, Salford etc). The financial gap that will emerge between L1 and Championship will, however, become unbridgeable for the many. Whereas previously a steady financial development was possible, it would become reliant on profitable clubs not taking dividends or benefits and leaving the cash in the club ready to accelerate spending in the event of a promotion. I think that is unrealistic.

I actually think that this is a bigger issue than Tranmere Rovers and what is best for Mark Palios. Just because something may suit us now doesn't mean it is to the benefit of football generally. Like every other recent vote by every club the self interest of the owners/lenders will take priority - unfortunately this plays right into the hands of those at the top of the pyramid.
 
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I dont think Palios is thinking purely of our own interests. He thinks the measures are beneficial for the vast majority of lower division clubs.

I doubt there is a single club in League Two whose income is five times the average for the division. There are outliers like Bolton, but they are the exceptions that prove the rule. If you think of the average size of the clubs at that level, revenue levels will be within a pretty narrow band in the majority of cases.

If good governance and management trumps unsustainable speculation at that level, that is fine by me.
 
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The gap between the Championship and League One is already too big to bridge. The wage cap does not materially change that situation. The gap will remain until there is wage restraint in the second tier, which is probably inevitable due to the impact of the virus.
 

ONIGP

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I doubt there is a single club in League Two whose income is five times the average for the division. There are outliers like Bolton, but they are the exceptions that prove the rule. If you think of the average size of the clubs at that level, revenue levels will be within a pretty narrow band in the majority of cases.

If good governance and management trumps unsustainable speculation at that level, that is fine by me.
Five times was an extreme example to highlight my point. For 2 times, 10% more, whatever the point is the same, why should it generate additional profit rather than reinvestment?

Yes, good governance and management should be encouraged and enforced as much as possible. A salary cap calculated as a proportion of revenue would massively assist with this without riding roughshod over market forces.
 
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I don't have any problem with market forces being curbed at an exceptional time like this. The future stability of my and every other lower division club matters more than ideological purity.

As I have said, why does the operation of the market trump responsible ownership, good coaching and good management ? If they become the key determining factors behind success and failure, rather than money, I think it will be good for football.

At the macro level, size of support and investment levels will still largely determine which clubs win the Premier League, qualify for Europe and so on.
 

ONIGP

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The gap between the Championship and League One is already too big to bridge. The wage cap does not materially change that situation. The gap will remain until there is wage restraint in the second tier, which is probably inevitable due to the impact of the virus.
The gap is difficult to bridge organically as is the bridge between Championship and EPL; it is not impossible though. Why should any individual be prevented from financing a football club to bridge those gaps, though? Why should Blackburn be allowed their Jack Walker and Chelsea their Abramovic (etc ad infinitum) but Salford or, God forbid, Tranmere Rovers not theirs? Providing a club is well managed why shouldn't it be supported by new owners who are willing to put their money in? What incentive is there to invest in a L1 team if you can't gain an advantage by paying more wages and recruiting better players?

It is interesting to see how many EPL teams have actually moved by 2 divisions in the past 10 seasons - more than you may think. We have Wolves, Sheff U, Southampton, Brighton, Bournemouth and Norwich in the EPL all of whom we played in our last stint in L1. A fixed salary cap feels like pulling up the drawbridge.

Take away the dreams of the HAVE NOTS and the world looks a far bleaker place.
 
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