PP payments are killing football, could this be a solution?

[sh1t_ref_again]

Post covid it would seem the have and have nots gap will grow ever wider. Whilst I understand some arguments that PP are needed to soften the blow for relegated premier league clubs, but if we want to stop PP killing football and have a fair competition then something needs to change.  The Crouch report seems to be going nowhere with the great and good of the premier league looking to close ranks and help to ensure if any of them fall foul of relegation they have their advantage intact to bounce back up.  As the PL hold the purse strings, the EFL will be given a few extra pieces of silver to shut up and told to run a long like a good boy and do as you are told.

So what could be done? the simplest answer is to spread more money into all the leagues below, but this would involve the PL giving away too much of its stash so will never happen, having relegation clauses into players contracts with a pay cap would seem a good solution but I have already seen this idea being watered down with it being a % of turnover to try and ensure the same big clubs can have the best players.

So what about the option that if a PL team comes down and wants to benefit from PP to keep it's players, then it incurs a points penalty reduction at the start of the season. After all if any other team falls foul of FFP you incur a point deduction, so would seem fair that clubs wanting to fund better players that would not fall inside the FFP regs should also have points removed.

PP are currently worth approx £90million over 3 years if a team has been in the PL for more than a year and £75 million if not, this is a massive advantage in player quality but what's it worth in points.

Looking over the last 4 seasons (did try to look at longer but effect is distorted due to previous payments over 4 years),

• Teams promoted in green with PP,
• Average points attained or all teams with PP
• Average points attained without PP

On average over these 4 years PP are worth about 9 points per year to a team (this would possible to high a deduction due to the 20-21 figure). Once a correct arbitrary points figure is set, then PP points deductions could be on a sliding scale, against the percentage of PP taken, this would encourage teams to consider their playing staff and cut costs.

Interested in others thoughts, to me it seems a system that could be made fair and level up the disparity between PP or not without bankrupting more clubs or complications of player contracts

[ExiledAjax]

Nice work.

Just on the 9 point calculation. Is it worth looking at how relegated PL teams fared prior to PPs being introduced? Compare their average points to the rest of the league and then we might see whether its fair to lay the blame on PP rather than just having a stronger squad due to being in the Prem for a few seasons.

Then, on the Fan Led Review.

31 minutes ago, sh1t_ref_again said:

The Crouch report seems to be going nowhere with the great and good of the premier league looking to close ranks

I'm not sure it's going nowhere. Right now I think we are waiting on a formal government response, and last I heard Crouch remained hopeful that action in this would be included in the Queen's Speech in the Spring. Whilst the initial talk may have gone quiet, I think this is far from dead in the water.

I would say that PP and related issues was one of the areas that the Review was weaker on. The Review stopped short of actually recommending any changes to parachute payments specifically, favouring instead to make Recommendation 38 as follows:

Football should seek to resolve distribution issues itself. If no agreement can be reached by the end of 2021, the Premier League and EFL should commission research to find a solution, with backstop powers for IREF if a solution is still not found.

I don't believe that "Football" managed to come to an agreement by the end of 2021 (if anyone has seen news to the contrary please let me know), and so we must presume that the Premier League and EFL have commissioned research into this area.

The Review goes on to recommend that the Leagues, FA, and PFA should work together to include a new compulsory clause in the standard player contracts that provides for an automatic adjustment to player salaries at a standard rate upwards on promotion and downwards on relegation.

Then there's the headline grabbing 'solidarity transfer levy' whereby transfers within the PL, and between the PL and foreign leagues, would be subject to a levy/tax of something like 5-10%, and that money would then get distributed through the pyramid. I don't particularly like this solution as I feel it would raise a fairly small amount, and would potentially cause an increase in the PL's predation on the Championship. We're seeing now how Championship clubs are already reliant on large fees received from PL clubs, and this would just exacerbate and reinforce that strategy. I don't think that this proposal has been fully thought through, and would lead to unintended issues building up over a few years.

 

[A Horse With No Name]

How about we scrap parachute payments full stop, and if lower end Prem teams who are in obvious peril of relegation from day one, decide to pay players a salary that they couldnt maintain in the Championship, struggle when they go down, tough. 

Thats how it used to work years ago  . You get relegated, you sell your highest earners.

[Show Me The Money!]

The only way for a level playing field is to spread the TV money to all 92 clubs.

Removing PP will just result in an even less competitive premier league with teams not being able to compete with the long established prem teams.

Penalising clubs getting relegated with points deduction again will just result in clubs who know they will be battling relegation not being able to compete with the established teams ( They struggle to compete as it is as most teams that go up know they have to protect themselves if they go back down again which is more likely than not and so not overspend).

Even if you spread the money evenly to all the 92 the top prem teams will still have a financial advantage due to the greater revenues they generate which is fair enough. The prem teams will lose there competitiveness in the champions league though.

Or, the other option which nobody seemed to like was to let the top prem teams F off and setup a NFL type franchise European super league with no relegation and the rest of the prem and football league clubs carry on with out them but with a level playing field of TV money to all clubs. The quality of the football would likely suffer as all the top players would be in this super league but least it gives all those teams something to play for. To become English champions

 

 

[Bas's perfect hattrick]

39 minutes ago, The Horse With No Name said:

How about we scrap parachute payments full stop, and if lower end Prem teams who are in obvious peril of relegation from day one, decide to pay players a salary that they couldnt maintain in the Championship, struggle when they go down, tough. 

Thats how it used to work years ago  . You get relegated, you sell your highest earners.

Problem with that is, you will make it very difficult for any newly promoted team to compete and the gap between the Premiership and Championship will get even wider. Imagine if we (ever) get promoted - we'd need to spend a significant amount to invest in players capable of keeping us there, but at the huge risk that we go straight back down and then likely go into administration

Interesting idea from the OP regards points deductions. I can't see it passing though. Simply because by definition the bigger clubs (getting PP) get more say in the matter than smaller clubs. 

 

[JoeAman08]

Easiest thing to do is have a wage cap. Relegated teams would likely be above the cap so can’t register any new players unless they sold. They can use 50% of any sales(fees and wages) to bring in 1 new player per 1 leaving. This goes for players leaving on frees but can only bring in a free on half the wages. This until PP payments run out or they go below wage cap. Whichever happens first. 
 

This still gives them a massive advantage and they are safe from going broke. It just prevents them from spending the PP money as a transfer kitty. A team like Norwich would likely thrive under this and not be bothered too much.
 

Fulham on other hand spent 20m in a covid market while only selling a few mil worth of players. Most likely increasing their wage bill.  Not to mention luring a very good manager to the championship with most likely a lot of cash. That is what we are trying to stop. 
 

As for the wage cap, it needs to be a fair amount so there is a scope for everyone else to improve. I am no expert on this. Seen maybe 17m. Not sure if this is a lot or not. A lot less than we have been spending on wages the last few seasons. 
 

It would need to make some things clear. Maybe like u23 wages don’t count unless a player plays more than a certain amount of minutes. Are non playing staff wages part of it? Maybe have a designated player like the MLS if the owner wants to fund it(up to a certain amount of course). 
 

There is a lot to talk about to make the championship better. Hopefully sooner rather than later solutions can come about. We need to sort ourselves out first though before we get too worried about all of that. 

[Davefevs]

18 minutes ago, JoeAman08 said:

Easiest thing to do is have a wage cap. Relegated teams would likely be above the cap so can’t register any new players unless they sold. They can use 50% of any sales(fees and wages) to bring in 1 new player per 1 leaving. This goes for players leaving on frees but can only bring in a free on half the wages. This until PP payments run out or they go below wage cap. Whichever happens first. 
 

This still gives them a massive advantage and they are safe from going broke. It just prevents them from spending the PP money as a transfer kitty. A team like Norwich would likely thrive under this and not be bothered too much.
 

Fulham on other hand spent 20m in a covid market while only selling a few mil worth of players. Most likely increasing their wage bill.  Not to mention luring a very good manager to the championship with most likely a lot of cash. That is what we are trying to stop. 
 

As for the wage cap, it needs to be a fair amount so there is a scope for everyone else to improve. I am no expert on this. Seen maybe 17m. Not sure if this is a lot or not. A lot less than we have been spending on wages the last few seasons. 
 

It would need to make some things clear. Maybe like u23 wages don’t count unless a player plays more than a certain amount of minutes. Are non playing staff wages part of it? Maybe have a designated player like the MLS if the owner wants to fund it(up to a certain amount of course). 
 

There is a lot to talk about to make the championship better. Hopefully sooner rather than later solutions can come about. We need to sort ourselves out first though before we get too worried about all of that. 

The previous draft salary cap proposal was that each team could have a squad of 25 @ £720k p.a thus £18m total. £720k p.a was the average Championship salary in 19/20.

Relegated teams would have in contract players over the £720k counted as £720k, so if a player was on £50k p.w his £2.6m p.a would be counted as £720k.  You may argue, how is that fair?  But wait

So, if all 25 players were above the cap, therefore counting as £720k, firstly they can’t bring anyone in.  Secondly if they sell a player, they can only replace with a new player up to £720k p.a.  So they can’t buy big.  Also as contracts expire they have to fall within the wage cap, so that £50k player has to accept £14k p.w or his club gets a fine / points penalty, depending on how far it goes over.

I’m sure in the early seasons they have to put a moratorium on all existing contracts, but again over time as players renew they’d have to fall in line.

It wouldn’t stop you pay 10 player higher than £720k, as long as the other 15 are paid low enough to keep them under £18m.

I think it has a lot of legs.  The amounts might need reworking but I like the principle.

Whether there is a need for PPs or not I’m not sure, perhaps save the money so if they get promoted they can invest in their squad.  Ideally I want to do away with them.

Edited January 17, 2022 by Davefevs

[semblar]

A slightly different take I saw on @Davefevs salary cap quote was to allow the PPs to continue for cashflow purposes - but to only allow some of it to count as income for FFP/P&S purposes, enough only to cover pre-existing wages above the specified divisional average

[Littlesh*t]

8 hours ago, Bas's perfect hattrick said:

Problem with that is, you will make it very difficult for any newly promoted team to compete and the gap between the Premiership and Championship will get even wider. Imagine if we (ever) get promoted - we'd need to spend a significant amount to invest in players capable of keeping us there, but at the huge risk that we go straight back down and then likely go into administration

Interesting idea from the OP regards points deductions. I can't see it passing though. Simply because by definition the bigger clubs (getting PP) get more say in the matter than smaller clubs. 

 

Surely teams should have to negotiate with players that in the case of relegation that they have a reduction in wages. After all they are part of the issue that said club got relegated. That way they get there nice big prem wage which reduces as they go down. To protect the player as well they could have it written in that on relegation the club has to accept bids of a certain value if they want an easy release to get back to a top flight club.

[Pezo]

16 minutes ago, Littlesh*t said:

Surely teams should have to negotiate with players that in the case of relegation that they have a reduction in wages. After all they are part of the issue that said club got relegated. That way they get there nice big prem wage which reduces as they go down. To protect the player as well they could have it written in that on relegation the club has to accept bids of a certain value if they want an easy release to get back to a top flight club.

That would be sensible but we don't do simple because that creates a problem for the prem, players won't accept those terms, that was the reason PP were put in place. Clubs also won't accept release clauses like that because they want to use those players to get promoted back to the land of milk and honey.

[SecretSam]

In some ways, I favour the free market, sink-or-swim approach: it's a risk based judgement. Most promoted teams come straight back down anyway.

However, the risk of this is that it creates a situation where 17 PL teams are pretty much safe from relegation, spending their £££ on good players, knowing that the teams coming up may well be cautious about spending, and so become cannon fodder on promotion.

Although, that's kind of happening now (see Norwich)

[Davefevs]

Essentially, PPs distort P&S / FFP, and FFP stifles investment as it only allows an owner to cover losses up to a set amount, which is way below PPs.  The two can’t work together, they contradict each other.

I do think the concept of a salary cap works.  I like the idea that financial penalties are penalising, and that the money from those penalties is shared between the clubs that do comply.

There needs to be electronic real-time reporting of PAYE, and any club paying players by an alternate method are given a points deduction like fielding an unregistered player.

The EFL and clubs will need to brainstorm against loopholes.

 

[Yellow&Blue&Red]

Lots of good ideas. Points deductions for PPs OR salary caps if properly implemented would both work to level the playing field. But I can't imagine either being successfully introduced whilst football is regulating itself. All of the solutions involve the richer clubs recognising the wider interests of football and football fans... which they're not going to do!

The Crouch Review recommends an independent regulator to ensure fairness and financial stability. And a golden share to protect fans' interests and to guarantee that clubs are treated like community assets. With those protections in place football will be in a much better place. Just don't expect representatives of big clubs to come out agreement! 

[1960maaan]

1 hour ago, Davefevs said:

Essentially, PPs distort P&S / FFP, and FFP stifles investment as it only allows an owner to cover losses up to a set amount, which is way below PPs.  The two can’t work together, they contradict each other.

I do think the concept of a salary cap works.  I like the idea that financial penalties are penalising, and that the money from those penalties is shared between the clubs that do comply.

There needs to be electronic real-time reporting of PAYE, and any club paying players by an alternate method are given a points deduction like fielding an unregistered player.

The EFL and clubs will need to brainstorm against loopholes.

 

 

When you think, Fulham, Watford and Norwich have received somewhere in the region of £250 million over 3 years (2 years Prem money + PP) , which wouldn't have been that affected by COVID, really hits home where we are with £38m loss.

[sh1t_ref_again]

11 hours ago, Show Me The Money! said:

Penalising clubs getting relegated with points deduction again will just result in clubs who know they will be battling relegation not being able to compete with the established teams ( They struggle to compete as it is as most teams that go up know they have to protect themselves if they go back down again which is more likely than not and so not overspend).

Even if you spread the money evenly to all the 92 the top prem teams will still have a financial advantage due to the greater revenues they generate which is fair enough. The prem teams will lose there competitiveness in the champions league though.

Or, the other option which nobody seemed to like was to let the top prem teams F off and setup a NFL type franchise European super league with no relegation and the rest of the prem and football league clubs carry on with out them but with a level playing field of TV money to all clubs. The quality of the football would likely suffer as all the top players would be in this super league but least it gives all those teams something to play for. To become English champions

 

 

Some clubs already take the view they are likely to be relegated and do not spend big, but the PP make them a level above the Championship and likely to yo yo back up, why should non PP championship teams have to suffer an unfair league so as not to upset the competitiveness of a team in the prem if they chose to prepare for life in the Champ, after all they would have the choice and level of a point deduction?

AS for the super league, had to laugh at all the prem team supporters rage at the idea, when in essence that was exactly what the Prem league did when it was set up, although they have relegation, they get a massive golden handshake to try and return 

[Fuber]

If wage reductions on relegation were standardised at 50%, across the EPL, it would avoid situations where PP are required.

Ultimately there are many measures that could be taken, that won't occur, due to the inherent greed of the EPL. 

In some ways English Football at this stage would be better off without the Premier League. The gulf has grown substantially due to ring-fencing. It's heading towards a closed shop bit by bit.

 

[Davefevs]

3 minutes ago, Fuber said:

In some ways English Football at this stage would be better off without the Premier League. The gulf has grown substantially due to ring-fencing. It's heading towards a closed shop bit by bit.

That’s kinda why I was a bit “meh” about the top 6 forming a Super League….if it meant them leaving domestic football.

[Show Me The Money!]

2 hours ago, sh1t_ref_again said:

Some clubs already take the view they are likely to be relegated and do not spend big, but the PP make them a level above the Championship and likely to yo yo back up, why should non PP championship teams have to suffer an unfair league so as not to upset the competitiveness of a team in the prem if they chose to prepare for life in the Champ, after all they would have the choice and level of a point deduction?

AS for the super league, had to laugh at all the prem team supporters rage at the idea, when in essence that was exactly what the Prem league did when it was set up, although they have relegation, they get a massive golden handshake to try and return 

The European super league will likely be inevitable and although you want to keep the best English teams in the English league then leaving could breath life into all the clubs that remain to create a fairer and more competitive football competition.

 Capping wages will likely result in a player strike arguing that they put bums on seats and so should get a fair slice of the TV money

[Davefevs]

Just now, Show Me The Money! said:

The European super league will likely be inevitable and although you want to keep the best English teams in the English league then leaving could breath life into all the clubs that remain to create a fairer and more competitive football competition.

 Capping wages will likely result in a player strike arguing that they put bums on seats and so should get a fair slice of the TV money

Problem is their wages are more than the tv money already.

[JoeAman08]

13 hours ago, Davefevs said:

The previous draft salary cap proposal was that each team could have a squad of 25 @ £720k p.a thus £18m total. £720k p.a was the average Championship salary in 19/20.

Relegated teams would have in contract players over the £720k counted as £720k, so if a player was on £50k p.w his £2.6m p.a would be counted as £720k.  You may argue, how is that fair?  But wait

So, if all 25 players were above the cap, therefore counting as £720k, firstly they can’t bring anyone in.  Secondly if they sell a player, they can only replace with a new player up to £720k p.a.  So they can’t buy big.  Also as contracts expire they have to fall within the wage cap, so that £50k player has to accept £14k p.w or his club gets a fine / points penalty, depending on how far it goes over.

I’m sure in the early seasons they have to put a moratorium on all existing contracts, but again over time as players renew they’d have to fall in line.

It wouldn’t stop you pay 10 player higher than £720k, as long as the other 15 are paid low enough to keep them under £18m.

I think it has a lot of legs.  The amounts might need reworking but I like the principle.

Whether there is a need for PPs or not I’m not sure, perhaps save the money so if they get promoted they can invest in their squad.  Ideally I want to do away with them.

Not sure that is the most ideal either but would be a start. Would transfer fees be unlimited as long as salary cap not breached? Same with bonuses and agent fees? Is their merits to a soft cap(max allowed without owner investment)and a hard cap(max allowed with owner investment and possibly taxed)? There is a lot to go over.

[Davefevs]

8 minutes ago, JoeAman08 said:

Not sure that is the most ideal either but would be a start. Would transfer fees be unlimited as long as salary cap not breached?

that was the proposal.

Same with bonuses and agent fees?

any bonuses to players to be part of PAYE.  Agent fees are added to transfer fee.

Is their merits to a soft cap(max allowed without owner investment)and a hard cap(max allowed with owner investment and possibly taxed)? There is a lot to go over.

you’d have to assume there’d still need to be some limits on losses or confirmation of backing from owner.  You’re right you can’t just have a wage cap without other controls.

[Pezo]

The problem we need to solve is clubs going out of business is it not?

No debt above 10% of earnings, let the free market rip.

If an owner wants to go for it they can but with there own money - not at the expense of the future of the club.