I nearly put this in the rumours thread but thought it'd get lost.
I've done some calculations on the new wage cap, as I believe we've got more to play with than some think.
The total allowed for this League One season on wages/agents/signing on fees is £2.5million, which equates to £48,000 per week.
We have 11 senior players (21 or over on January 1st) that signed a contract with us before the new rule came into place;
Amos, Phillips, Oshilaja, Pearce, Purrington, Williams, F Caskey, Pratley, Oztumer, Lapslie, Aneke.
According to this article, these players count as the league average, £1.7k per week.
This equates to £18,700 of our £48,000 budget.
Of the new signings so far, only Levitt is under 21 so assume he does not count towards the figure.
I don't know the wages of the other signings, so I'm going to guess at the below.
Famewo - £2,000 (Norwich could be paying a contribution)
Washington - £2,500
Gilbey - £3,000
Maddison- £4,000
Watson - £3,000
This would equate to £14,500, leaving us with around £15,000 still to play with to stay under the cap, plus another £1,700 if Phillips moves on.
Hopefully Lee and Steve can work some magic with that money!
Comments
I think your broadly right on the space we have available to us under the cap, I think Maddison’s salary might be a little lower than your estimate.
Need to sell Phillips and ideally the likes of Oztumer and JFC.
EDIT: Confirmed by Cawley here that the contracts were signed before the salary cap (last tweet in reply) but were blocked due to the embargo. I think it is therefore safe to assume that Gilbey and Washington apply to the average salary as they were signed before the cap came into force.
I've no idea what the new signings are on. Yes Watson would have taken a big salary drop to come here, but at Forest he would have been on good money. I've seen a figure of £15k a week quoted. Would he have come to us for less than £5k?
If I read it correctly this "blunt force" salary cap drives a new dynamic between "senior" contracts (for players 21+) and "senior development" contracts (for first team squad players under 21 as at 01.01.2020).
I suspect the overall terms have been largely borrowed from Rugby but many clauses read like a badly interpreted and amended players contract.
Sadly I do not see any legal challenge attracting much support when the entire industry is demanding government funding.
The cap principle has merit but as implemented damages the very ambition it seeks to achieve - the sustainability of the football pyramid to the benefit of the game in communities across the country.
I would argue the lower leagues have for years done little else but prostitute themselves to the interests of the upper echelons of the industry for financial survival/ gain.
The PL clubs may indeed share a little more of their media revenues to drive a further gulf between "the haves & have nots".
As structured the salary cap drives investment out of the game precisely where it is needed.
There will be investors across 5 or 6 clubs who are prepared to invest to get out of League 1.
Rather than invoke draconian barriers to trade, the overspend tax could be used as a significant source of desperately needed new revenue. The paltry 5% overspend margin and associated penalty will generate peanuts per offending club beyond which clubs will face a disciplinary committee.
Yet if you recognise the ambition across clubs driven to secure Championship status to allow a sliding scale of "overspend" of say £1m with a penalty of £1.5m supported by sliding scale of "premiums" for £250k, £500k, £750k overspends you generate revenue to be distributed across all club's.
At any given point it is then up to the club's what they spend still within a financial industry framework.
Quite simply if a club sells a player or receives a percentage sell on fee for millions why stop them from reinvesting?
At the moment the regulations read like a bookkeepers charter. There is no doubt they urgently need revisiting in at least 3 key areas.
1. The age limit of under 21 renders the under 23 development system defunct. Who will offer a 20/ 21/ 22yr old player a term contract to simply further develop in U23 football? If you haven't made the first team squad by age 20 you are done. It is a recipe for redundancies.
2. There is no provision for any injured player reserve. We had up to 14 contracted players injured last season. There has to be a mechanism to trigger extra signings and increased budgets in respect of any medium or long term injuries.
The cap even includes player insurance costs, hardly an area for financial abuse, but few clubs are now going to risk taking an injury profile player who may only deliver half a season.
Pearce, Pratley and Williams struggle to play 2 games a week. They and Forster-Caskey may face a difficult future.
3. Breaching anti competitive legislation there is no regional cost of living adjustment. Regional cost of living allowances are standard practice. UK average salaries - £30k, London average salaries - £40k - 25% differential
So where does all this leave us.
To repeat the excellent analysis above with the assumed departure of Phillips we will have just 10 "senior" (aged 21+) players left from last season. Existing contracts are registered at a default figure (I used a circa £2kpw figure at a cost of circa £1.05m for;
Amos, Oshilaja, Pearce, Purrington, Pratley, Forster- Caskey, Williams, Oztumer, Lapslie, Aneke - All out of contract in June 2021.
We have added post 06.08.2020 the "senior" contracts of;
- Gilbey, Washington, Watson, Maddison & Famewo which together with say 4* "planned "senior" signings will have to be fitted into a capped expenditure collectively of circa £3kpw - a further £1.6m (Using 5% margin)
*Allowing for 1 further senior contract in the January transfer window.
Until then 19 "senior"players will need to be augmented by the "development" (under 21) contracts of; Maynard-Brewer, Levitt, Morgan, Doughty, Davison and maybe Barker and Vennings providing a squad of;
Amos, Maynard- Brewer, New RB, Purrington, Oshilaja, Famewo, New CB, Barker, Pearce, Pratley, Watson, Gilbey, Forster-Caskey, Levitt, Lapslie, Vennings, Morgan, Oztumer, Doughty, Williams, Maddison, Aneke, Washington, New MS, New SS, Davison
An oven ready Right back, Centre back and two forwards seem fundamental to restoring the spine of the team.
Any further additions who might add value like a further CB or LB will have fall into the category of
i) "one out - one in " though whether, with hundreds of players redundant, there will be any notable market for meeting the existing terms of "senior" contracted players must be doubtful
or
ii) Players under 21 as at 01.01.2020
It will be a significant challenge which I am not sure is registering with some.
Good point by Grapevine, the use of IR is a tool that works in the NFL, being able to release that money for a set period is a good idea, why shouldn't you have space to sign someone if you're star player gets injured on day 1, and you can't release that cap space.
They'll be 5 or 6 clubs who will overspend and happily take the hit of the fine
£2.5m / 52 weeks = £48,076.92
Average per player in the 22 senior pros = £2,185.31
I'm being stupid, I was thinking people were saying players now need to be on £1,700 as I didn't read the response properly.
I am fine with them undervaluing these already contracted pros at £1,700 pw as that benefits us as much as it can.
I think we managed to get Gilbey and Washington as pre-cap signings so:
So my assumption is we have about £17k to play with.
If we do have bonuses that might eat up quite a bit of the remaining £884,000/£2,500,000 for the year.
If we assume again that we have bonuses on Maddison and Watson our figure could drop a bit (I assume bonuses to be what £25,000/£35,000 at this level?) So we should still have over £800,000 or about £15,000 remaining?
It references any number of referral points and calculations but beyond the overall cap of £2.5m I can see no weekly average figure quoted. Nor for that matter the number for squad lists of 22 players. Indeed I have seen some reference to 23 players.
A pretty mute point when considering market rates you are not likely to be able to pay more than 20 "senior" contracts
Th EFL press release of 07.08.2020 provides no further information.
I just used a mid point for figures quoted in various articles.
I suspect the EFL are getting hammered by all sides from agents, those clubs who voted against the proposals, the PFA etc.,
If you look at the PFA site analysis they have completed a detailed analysis chart absolutely hammered the new regulations.
I have a measure of sympathy - it is knee jerk solution/ response to potentially 16/ 17 clubs disappearing, with National League maybe suspending their season.
It has been done cost containment basis rather than revenue generating approach. I suspect it was to show good housekeeping to the government but it needed to be both.
A betting tariff is a great idea.
This cap is going to be very restrictive for us.
I know its not the players fault as if clubs didnt offer that then the player just would have no choice
But proof the Salary Cap needs to come in at the top first, just ridiculous
A salary cap would probably be difficult to impose in the Premier League but the Sky money has totally distorted the game. It's crazy that the annual salary of a Chelsea squad player would cover the aggregate wage cap of three League 1 clubs or, alternatively, five League 2 clubs. In fact, that's an understatement, given Employers' National Insurance and payments to the player's agent.
It's also ridiculous that Chelsea can have 30 or 40 players out on loan at any one time, although they've made tens of millions from this practice for several seasons.
As to the League 1 cap, it is only going to make the gap between clubs in the division and those in the Championship even bigger than it is now. We really are going to need to get back to the Championship sooner than our customary three years or the problems of attracting and retaining players will worsen and it will become more and more difficult to re-establish ourselves in the second tier.