Salary cap in the Championship on agenda

CHAMPIONSHIP club chiefs have met to propose an annual salary cap of £20million, which could have a huge impact on both Cardiff City and Swansea City.

On Thursday evening, senior representatives from all 24 Championship sides were locked in talks over the introduction of the salary cap during a meeting over Profitability and Sustainability regulations.

As well as a salary cap proposal, the Telegraph report that a motion was brought forward to put a limit on the number of players in each squad.

An agreement was not reached regarding the salary cap, however, with some clubs wanting that figure of £20m to be higher – it is thought a £30m was also mooted – but further talks are thought to be planned for next month.

Clubs were insistent that the EFL conclude their legal disputes with Derby County, Birmingham City and Sheffield Wednesday, all of whom have been charged with breaching Profitability and Sustainability regulations, before any decision is made.

While there will likely be a cooling-off period for Championship clubs should the plans come to fruition, the decision will likely have huge ramifications for both the Bluebirds and the Swans.

Kieran Maguire, a lecturer at the University of Liverpool and a chartered accountant since 1989, has offered a detailed insight into the financial outlay in place at both Cardiff and Swansea.

While the numbers might well be subject to change, Cardiff’s wage bill is thought to be around £48.4m per annum, while the Swans are thought to tip the scales at just over £50m.

We understand those figures, at present, to be slightly too high, but Maguire explains these are the mostrecent accounts, either from 2018 or 2019 financial years.

Since these figures for Cardiff were posted, their 2018 financial accounts, they have bought and sold a number of players, including a huge cull this January. So while there is no telling the exact figure, it is likely the figure will be marginally less than the £48.4m 2018 wage bill.

Cardiff’s 2019 accounts are due for submission today (February 29), with a confirmation statement due before May 12. These figures are likely to be inflated given higher Premier League wages, however.

The same, meanwhile, can be said for Swansea, whose £50.3m outlay for the 2019 financial year will have been drastically cut following the exits of Oli McBurnie, Borja Baston and Tom Carroll, all of whom were understood to be on sizeable wage packets.

But even as a benchmark, it would mean both Welsh clubs would likely have to cut their wage bills by at least half if they were to comply with these proposed plans.

There does appear to be some merit to all this, though.

The salary cap proposal is designed to ensure the long-term futures of clubs outside of the Premier League.

Maguire went on to suggest that, were these salary restrictions to be implemented, it would mean a huge cut in the overall losses for each club.

The lecturer claims Championship clubs are operating at a collective financial loss of £588m, however with the introduction of a £20m salary cap, that figure could be dramatically slashed to £226m.

For Cardiff, it would see their losses reduced from a whopping £29m to net zero, while Swansea’s £33m losses would be cut to just £2m.

As previously mentioned, however, these are just representative figures based on most recent accounts and are subject to change.