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Interesting Championship financial story


Mr Popodopolous

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Reading again Matt Hughes Football Notebook in Saturday's Times.

This snippet has a few questionable claims in it but nonetheless a potentially interesting and significant story.

As written.

"Second-tier salary cap"

"The Championship clubs will discuss introducing a form of salary cap at their end-of-season meeting. Leeds United and Sheffield Wednesday are understood to be close to breaching the EFL's profit-and-sustainability rules, which have resulted in Birmingham City and Queens Park Rangers being docked points in recent years; bringing in stricter wage controls similar to those in League One and League Two has been touted as a solution to this crisis. Under the salary cost management protocol, League One clubs are permitted to spend a maximum of 60 per cent of their turnover on wages, a figure that drops to 55 per cent in League Two, with overspenders being sanctioned. The Championship rules are aligned with those in the Premier League, where the only limitation on spending is the short-term cost control regulation that prevents clubs increasing their wage Villa by more than £7 million a year, unless they can demonstrate that the growth comes from increased commercial, match-day revenue or player sales".

Few observations!

1) QPR didn't get docked points.

2) Can't say I'm wholly convinced that Leeds are so close to the limit.

3) Doesn't mention Aston Villa or Derby.

However my main takeaway from this is to change rules midstream would screw over clubs who have done the right thing...a wage cap being imposed would be to our detriment IMO. Being run well or not, it could surely hinder us eg- surely Championship clubs won't vote for it!

From a Governance angle, and a solvency perspective, it could be positive but definitely there are negatives too- you can't just change a model like that mid-stream, when clubs have had no wage limitations but loss ones...would be surprised if clubs vote for it!

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3 minutes ago, Mr Popodopolous said:

Reading again Matt Hughes Football Notebook in Saturday's Times.

This snippet has a few questionable claims in it but nonetheless a potentially interesting and important story.

As written.

"Second-tier salary cap"

"The Championship clubs will discuss introducing a form of salary cap at their end-of-season meeting. Leeds United and Sheffield Wednesday are understood to be close to breaching the EFL's profit-and-sustainability rules, which have resulted in Birmingham City and Queens Park Rangers being docked points in recent years; bringing in stricter wage controls similar to those in League One and League Two has been touted as a solution to this crisis. Under the salary cost management protocol, League One clubs are permitted to spend a maximum of 60 per cent of their turnover on wages, a figure that drops to 55 per cent in League Two, with overspenders being sanctioned. The Championship rules are aligned with those in the Premier League, where the only limitation on spending is the short-term cost control regulation that prevents clubs increasing their wage Villa by more than £7 million a year, unless they can demonstrate that the growth comes from increased commercial, match-day revenue or player sales".

Few observations!

1) QPR didn't get docked points.

2) Can't say I'm wholly convinced that Leeds are so close to the limit.

3) Doesn't mention Aston Villa or Derby.

However my main takeaway from this is to change rules midstream would screw over clubs who have done the right thing...a wage cap being imposed would be to our detriment IMO. Being run well or not, it could surely hinder us eg- surely Championship clubs won't vote for it!

From a Governance angle, and a solvency perspective, it could be positive but definitely there are negatives too- you can't just change a model like that mid-stream, when clubs have had no wage limitations but loss ones...would be surprised if clubs vote for it!

Eff me....why not just let everyone off.  

It is pretty clear from the posts of Kieran Maguire than Lg1/2 clubs are racking up losses far in excess of what they should be if they complied with the wages:income ratios.  Even City failed that when they were down there.

Shaun Harvey has run the EFL appallingly.  Good effin’ riddance.

You can’t introduce wage caps when clubs have committed to players contracts....it’s laughable.

At the end of the day, and I know football is not like any other business, but it is a business in the spirting entertainment world.  Let them run themselves like proper businesses and if they can get investment from wherever, go for it, enjoy it, but don’t come crying when your club folds or the saviour pisses off with your ground, turfs you out and ruins you in the process.

Its hypocritical, bearing in mind 1982....but I thought people had learned.

Rant....over.

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Would help if they enforced the rules they already have before coming up with new ones.

If they're really dead set on new rules how about a homegrown player rule instead, stopping clubs being reckless is all well and good but a homegrown rule would address that indirectly but also improve the focus on developing players and better reward those that do.

And obviously I think we'd do rather well out of it - for all the years of investment in the academy it feels to me like we're finally at a stage where we have a bigger reach and talent pool than many of our peers - especially those that throw money at the division.  

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36 minutes ago, Mr Popodopolous said:

Reading again Matt Hughes Football Notebook in Saturday's Times.

This snippet has a few questionable claims in it but nonetheless a potentially interesting and significant story.

As written.

"Second-tier salary cap"

"The Championship clubs will discuss introducing a form of salary cap at their end-of-season meeting. Leeds United and Sheffield Wednesday are understood to be close to breaching the EFL's profit-and-sustainability rules, which have resulted in Birmingham City and Queens Park Rangers being docked points in recent years; bringing in stricter wage controls similar to those in League One and League Two has been touted as a solution to this crisis. Under the salary cost management protocol, League One clubs are permitted to spend a maximum of 60 per cent of their turnover on wages, a figure that drops to 55 per cent in League Two, with overspenders being sanctioned. The Championship rules are aligned with those in the Premier League, where the only limitation on spending is the short-term cost control regulation that prevents clubs increasing their wage Villa by more than £7 million a year, unless they can demonstrate that the growth comes from increased commercial, match-day revenue or player sales".

Few observations!

1) QPR didn't get docked points.

2) Can't say I'm wholly convinced that Leeds are so close to the limit.

3) Doesn't mention Aston Villa or Derby.

However my main takeaway from this is to change rules midstream would screw over clubs who have done the right thing...a wage cap being imposed would be to our detriment IMO. Being run well or not, it could surely hinder us eg- surely Championship clubs won't vote for it!

From a Governance angle, and a solvency perspective, it could be positive but definitely there are negatives too- you can't just change a model like that mid-stream, when clubs have had no wage limitations but loss ones...would be surprised if clubs vote for it!

Read that yesterday too @Mr Popodopolous it isn’t going to happen. No way will they get a majority agreeing to it.

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52 minutes ago, Olé said:

Would help if they enforced the rules they already have before coming up with new ones.

This with nobs on! :clap:

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1 hour ago, Davefevs said:

Eff me....why not just let everyone off.  

It is pretty clear from the posts of Kieran Maguire than Lg1/2 clubs are racking up losses far in excess of what they should be if they complied with the wages:income ratios.  Even City failed that when they were down there.

Shaun Harvey has run the EFL appallingly.  Good effin’ riddance.

You can’t introduce wage caps when clubs have committed to players contracts....it’s laughable.

At the end of the day, and I know football is not like any other business, but it is a business in the spirting entertainment world.  Let them run themselves like proper businesses and if they can get investment from wherever, go for it, enjoy it, but don’t come crying when your club folds or the saviour pisses off with your ground, turfs you out and ruins you in the process.

Its hypocritical, bearing in mind 1982....but I thought people had learned.

Rant....over.

Agreed. Pretty well on all your post.

Had forgotten about existing commitments but of course you're right. A wage cap if phased in over 5-6 years might well work, but never at this time. Still not in favour of it though...because another item on there said that 1/3 of Championship revenue- and admittedly 2 clubs are still to declare their accounts- but in that season another item said 1/3 was parachute payments! There are definitely pros to it, but it is the wrong division for it!

If the EFL are going down this road, we may as well just have a free for all.

Shaun Harvey...what can we say! So poor, Kieran Maguire's thread with the hashtag #SHAT was superb!

1 hour ago, Olé said:

Would help if they enforced the rules they already have before coming up with new ones.

If they're really dead set on new rules how about a homegrown player rule instead, stopping clubs being reckless is all well and good but a homegrown rule would address that indirectly but also improve the focus on developing players and better reward those that do.

And obviously I think we'd do rather well out of it - for all the years of investment in the academy it feels to me like we're finally at a stage where we have a bigger reach and talent pool than many of our peers - especially those that throw money at the division.  

Agreed- well and truly! Our academy system now seems somewhat better, homegrown rule as in actual academy products would in fact produce a virtuous circle- been in favour of such a rule for a while for vating reasons.

46 minutes ago, ScottishRed said:

Read that yesterday too @Mr Popodopolous it isn’t going to happen. No way will they get a majority agreeing to it.

I think you're right...if Gibson's mostly pretty reasonable proposals couldn't get a majority, there isn't surely a hope in hell about this one .

11 minutes ago, downendcity said:

This with nobs on! :clap:

Enforce them, close up loopholes where some exist and get a better calibre of person in order to enforce them in real time!

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