New SCMP Financial Control Rules

Anyone who understands the new rules announced today around spending caps able to let us know if it's good or bad for us? Seems like the wages allowance has gone down by 10%

 

The wage cap has been reduced from 60% of turnover to 50% and it now includes manager costs so it's not only a reduction but also an increase in what is included. Within the new rules all equity injections will be capped at 50% that can be spent on wages so a 1mil injection only means wages can increase by 500k, under the old rules you could spend 100% of up to 500k then 50% of anything over it. Also within them clubs coming down from Championship are capped at 65% of turnover compared with the current 75%.
It's hard to tell at this stage whether it is better or not for us as in theory all it means it teams need more income/injections to keep the same wage budget or wages will have to be reduced.

The Championship rules changes to 85% of income should help reduce the gap between league 1 and the Championship.

 

Somebody probably thought this was a good idea in principle but I think all it will build chasm between leagues.

Let's say for example now, city's budget is £6m, what if rupp said we are going all out and im going to put 50% on top, so spend £9m on a squad.

Now with such a big increase in spend theorerically if we were to get promoted we would have the nucleus of a squad to compete in the league above given we had stretched our budget to sign championship ready players.

Under new rules he wouldn't be able to do that, we would have to get promoted using a £6m budget and then essentially rip up the team and start from scratch the following year

 

If someone like Nagle for example, comes along and adds £10 m in “equity” they could still add £5m to the existing wage bill. Is that right?

 

Yes, but under the old rules, it was 100% of the first £500k, 75% of the next £250k, and then 60% thereafter. So, now its £5m added to wages instead of £6.2m.

 

I’m sure a bankrolled club wouldn’t bat an eyelid given that Jimmy, they would just ADD to their “ investment” by printing equity?

 

Isn’t it the case where multiple clubs are under the spotlight for doing what you rightly point out is against footballing regulations . I read somewhere that our close L1 neighbours are worried that they have/ will/ might fall foul of these regulations and the owners solution was to quickly “ invest” in footballing support services?
If big clubs are having to invest HuGe sums , Leicester, Chelsea, Man City to name three , in legal fees then it’s a rule easily circumnavigated and possibly defendable in some courts?
Changing the applicable numbers , ie %ages , does little but mask the Fair Play advantages some clubs gain over others?

 

As long as the definition of turnover hasn't changed then clubs shouldn’t need to do anything creative if the owner is happy to fund big wages. Under the current rules 'owner donations' are classed as turnover so they can continue to gift the club money.

Enough clubs have voted for this and similar rules in the Championship so the clubs must see the benefit of it.

The one positive about the championship rule changes is monitoring can now be done in real time so if a club goes over in November they can be punished then rather than waiting for the current monitoring period late in the season which has caused so many problems of points deductions in the last few weeks.

 

So Wednesday,Leicester and Oxford can spend 65% of their turnover next year ,but everyone else only 50%
Surely this gives them a massive advantage
The cap should be the same for all clubs competing at the same level and if they are bringing players down with them on large salaries
Then tough, don’t hand them out in the first place

 

Thanks , yes I get it, but enough voted for it, us probably included , because the owners are happy to fund part of the budget whist many clubs spiral further into debt? As long as they are happy to continue gifting to keep debt manageable they probable don’t care?

 

Or have clauses in them to account for the drop in division.

 

It would need to be huge wage drop to account for the the huge reduction of turnover due to less TV revenue etc. Huddersfield had a turnover of £18.2m 23/24 in the Championship, last season it was £10.6m. In same period Rotherham went from £19.2m to £10.5. It's complicated a bit by the Championship cap applying to all player and manager spend including transfers so they won't be able to spend 85% on wages but even if we say they both spent 65% Huddersfield would have had to reduce their wages from 11.8m to 5.3m and Rotherham would go down from 12.5m to 5.25m. It would make it very hard to get players in the Championship to commit to long term contracts and if they have a 50% wage cut down they will want the reverse to apply for promotion which clubs won't want.

 

The new rules mean nothing if super rich owners intend to throw money in.
The only thing that would create a level playing field is a salary cap across the board meaning no club can hypothetically bring in Messi and Ronaldo at L1 level and pay them millions to get promoted.
I hate what Wrexham have done with a passion and hope their bubble bursts and they return to their rightful level of non league

 

What Wrexham has done is actually quite incredible. Fair play to them.. let’s not pretend we wouldn’t love going from League 2 to a point off the championship playoffs in consecutive seasons.

 

Thanks that’s great , yes agree , didn’t Lincoln buck that trend , ie performance pay, yet Hudders seem to be lumbered with players they don’t seem to want on long term expensive deals.?