Championship should follow salary cap green light – MP
THE Championship has been urged to follow League One and Two clubs in agreeing a salary cap by the chair of the parliamentary committee which last month recommended greater cost controls across the English Football League.
Third and fourth-tier clubs yesterday voted in favour of squad salary caps in a bid to tackle the “profound” financial impact of the coronavirus pandemic.
League One clubs have agreed a £2.5million squad cap, with League Two sides opting for a £1.5m limit. Both caps will be introduced with immediate effect, the EFL said.
It is understood Championship clubs, including Coventry City, have no plans at this stage to hold a formal vote on a cap, but Julian Knight MP, the chair of the Digital, Culture, Media and Sport (DCMS) committee says they have to act. He said: “It seems there is a breaking out of common sense amongst league clubs. For a long time the flawed business model of much of football has been as clear as day but it’s taken the biggest financial crisis in English football since the war for some action. Let’s see if more realism now permeates the Championship, where player wages incredibly outstrip club turnover.” Deloitte reported earlier this year that second-tier clubs had a combined wages-to-turnover ratio of 107 per cent in their 2018-19 accounts, and lost a combined £300m.
In announcing the League One and Two cap, EFL chief executive David Baldwin said: “The term ‘salary cap’ is an emotive one, creating the impression of a restrictive measure but we are clear in our view that this is neither the objective nor the likely effect of these changes to EFL regulations. The financial impact of
Covid-19 will be profound for EFL clubs and today’s vote will help ensure clubs cannot extend themselves to the point that could cause financial instability.”
Players’ union the Professional Footballers’ Association said the legal advice it has received is that the cap would be “unlawful and unenforceable”.
The union said in a statement: “We are disappointed at the outcome of today’s votes. While we share the league’s commitment to protecting the longterm sustainability of the leagues, the salary cap proposals have been rushed through.”
It is believed the caps will be index-linked to the level of domestic broadcast revenue clubs receive, so would be reviewed in the event of a new deal being agreed or in the event of any change to how funds are allocated.
The EFL said the cap did include basic wages, taxes, bonuses, image rights, agents’ fees and other fees and expenses paid directly or indirectly to all registered players.
There are a number of exemptions.