Players may not even be able to get a mortgage under salary cap
In the third of a five-part series investigating the state of the game, Mike McGrath looks at the crippling effect proposed move will have on clubs and their squads across Leagues One and Two
For footballers in England’s lower leagues, the impact of the proposed salary cap is about to hit home – in some cases, literally.
Should the English Football League’s cost-control measures be enforced in League One and League Two, new contracts will see clauses inserted to reduce wages in the event of relegation. And it will be that drop in salary that will make it difficult for players when borrowing money for major loans such as mortgages.
“Any mortgage company is going to look at that and say, ‘Relegation could happen, we can’t give you the money’, ” said one football agent with knowledge of lower-league deals. If this is bad news for estate agents, the ramifications for English football will be felt far more keenly.
Clubs have voted for a maximum of £2.5million on players’ salaries per season for League One clubs and £1.5 million in League Two, with the Professional Footballers’ Association union in negotiations and arbitration over the limits. For the squads of Charlton Athletic, Wigan Athletic and Hull City, falling into the third tier next season will not mean an automatic drop in wages. High-earning players will be treated like they are on the average – around £170,000 per year – rather than their actual amount.
But any new contracts are likely to include relegation clauses that will see a reduction in wages to fall in line with new limits. That is when the problems will arise trying to finance a new house or car, as wages could fall by half or more.
Intermediaries are asking for new deals to have low buyout clauses in case of relegation. While a club like Wigan have sold their young talent to survive during administration – Antonee Robinson earned them £2 million when he went to Fulham – players will now demand a set price to leave when they sign new contracts.
It means the club will lose millions of pounds in their assets should they drop down a division. “Nobody has thought it through, as usual. It is just an advantage to smaller clubs on small money anyway,” added the intermediary.
Joining a struggling EFL club has never been less appealing. Come January, those fighting against relegation will struggle to buy players to save their season. They will be asking them to join a club where wages will be slashed if they fail to stay up. “Say your best player is doing really well and you want to extend his contract. You won’t be able to do that,” said an EFL chairman.
There will certainly be a case where players will wait until they are safe from relegation before committing to a fresh contract.
One EFL chairman believes the salary cap will be voted out within a year, with the proposals merely a sign that clubs needed to take a stand against the inflation of wages season on season. “I don’t think it will last. Come this time next year it will be voted out again,” he said.
“The clubs all did it as a necessary response to show solidarity and that things cannot go on. It was a vote for change. But it becomes too complex and will cause too many problems for clubs to retain players and try to sign players. I think it will become unworkable. I think they voted because we had to change and stop bankrupting English football, rather than the detail.”
The PFA is not opposed to controls, but wants more time for proposals to be considered, while raising concerns to clubs before they voted the limits in. It took between 11 and 25 months for other sports to introduce new rules on spending. At the time of its introduction, the PFA called it “unlawful and unenforceable”.
The union pointed out the huge disparity between the teams in the same division. Sunderland and Portsmouth get big gates, when fans are not shut out by the coronavirus pandemic, and have a high wage bill for League One. They are among those who would need to adapt most.
“Whilst sustainability is key, maintaining a certain quality of football will be vital to achieving future revenue growth, both centrally and for individual clubs,” the PFA added in a document seen by
The Daily Telegraph.
“It may now become more attractive for a player to compete in the National League than in EFL competitions, if these draft rules proceed.”
Interestingly, there have been murmurings around EFL clubs that there are ways around the salary cap, which would mean clubs flouting the rules they voted in themselves.
The prediction from boardrooms is that it will be temporary and that clubs will eventually start to think what is best for themselves, rather than for the good of football. It could end up being one of the most short-lived measures the sport has seen.
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