Salary Cap Management Protocol (SCMP)

https://s3.eu-west-1.amazonaws.com/...o.uk/ff4ac970-2d7c-11ee-a1bd-09716bd73173.pdf

Start at page 97

 

If someone would like to summarise the following 96 pages that would be much appreciated. Does this relate to the efl charges by any chance? Or is it the reason we spend nowt, but everyone else seems to find a loop hole?

 

The main thing I take from this is that Red Rain is alive and (I hope) well. Which is more than I can say about football at the moment.

 

No wonder it takes them years to judge a case if they’ve to read all the regulations

 

I want people to read it, but I also want people to understand it. If I tell everyone what I think it means, then no-one is any the wiser, and no-one has made their own mind up about what it means. Please at lest have a go, and form your own opinion along the way. It will be worth it, I can assure you.

 

@Red Rain think this is your shortest post ever

 

A very random and cryptic return after all this time, but each to their own...

 

Is there a specific point you're trying to make or a specific section you want people to read?

 

Not reading that. But a summary I've seen suggests that we have to limit our wage bill to a % of our projected turnover, or have a transfer embargo. Transition allowances mean that there are excemptions to people who signed their contracts while we were in the Championship, which I take to be, Williams, Kane, Cole, Iseka and Benson. But also meant we couldn't just take the contracts that Andersen and Collins had and offer it to someone else.

 

The club have a very difficult job in complying with SCMP. According to SCMP the club's player related expenditure cannot exceed 60% of the club's relevant turnover. I would suspect that the club are really struggling to get under this percentage and this is in part due to the ridiculous salaries that we've been paying the likes of Iseka and Oulare. In addition the club is reportedly £6-7m a season worse off due to reduced league distributions, however when you also factor in reduced ST sales, reduced matchday revenue/gate receipts from visting fans, reduced hospitality and no stadium revenue then subsequently all of these items combined could be having a massive impact. I would guess this is also why we've seen very little in the way of new incoming players this transfer window (Donovan Pines aside) and that we need to move players on (Styles?) before bringing anyone else in. Also see below.

Player related expenditure shall not exceed 100% of the club’s Football Fortune Income.
"Cash Injections – Significant cash injections from companies or benefactors must be
evidenced by a bank receipt or statement to show funds have been credited to the Club’s
bank account by the end of the relevant Reporting Period. To be included in the Club’s
SCMP Submission, a signed Letter of Guarantee must be received by The League to confirm that there is no interest linked to the cash injection or
any requirement for future repayment by the Club of the cash injection". Interesting then that the league requires confirmation that any cash injections into the club should not have an expected repayment.
Going back to last season, given the hefty sum that the owners paid into the club just to keep it operational on a day to day basis then perhaps very little of any transfer fees received will now be spent on new playersnas that will start forming part of their return.

 

You have no authority here Red Rain

 

Was there not an excemption, or at least partial excemption for contracts signed in the Championship?

 

Possibly, I don't know to be honest.

 

You can take a higher percentage of turnover to cover Championship contracts but only for the first season post-relegation

 

I suppose the pandemic didn’t help with no income coming in but still have bills to pay.

 

Welcome back RR.. but I think the world will keep turning without me reading or understanding SCMP...

 

He he, you had me there. I was looking for p97 numbered in the document and their aint one. soon sussed it though.

 

I will condense things as much as I can.

In the first year back in league 1, the club was allowed to spend a maximum of 75% of its turnover on first team player wages. If our turnover was £4m, then our spending could be £3m. In our second season, the maximum spend on player wages was 60% (£2.4m). Hence, we had to sell players.

Transfer cash received is added to turnover. Note, not the headline figure of £4m that we got for Liam Kitching, but the £1m first installment. The balance of Kitching's fee will be included over the subsequent years. Any transfer fee paid will be deducted from turnover on the same basis. So, if we received £1m and paid out the same £1m, there is no effect on total wages allowed. However, it would not be an unreasonable assumption to make that the new player is paid more than the old player, but the system makes no allowance for that.

Additions to share capital are added to turnover. Loans are specifically not allowed. However, only 60% of the addition can be used for wages, and that would be reduced even further if part of the share capital injection was used to fund transfer fees.

What concerns me is that in the event of our promotion, our team will have been constructed under the League 1 system. The league 1 system has lowered the overall quality in league 1 in recent years. When we join the Championship, the teams in that league have been constructed using different rules. In the Championship, clubs are allowed to lose £39m over 3 years. It is near impossible task to catch up in just 1 season. Assuming we do try to spend to catch up, but our attempts are unsuccessful, either in the first year or the second, we have to go through the process of selling off those players when we are relegated, The whole thing could be a vicious circle unless we plan for our promotion well in advance, and even then, it is not clear what we can do.

 

While that does appear to be to be a particularly difficult hurdle to surmount, Plymouth, and particularly Ipswich, appear to be taking it in their stride.

As a fan of a League 1 club I'd argue that clubs in the Championship should be working under the same or similar rules, but that would mean the gulf between the Championship and the Premier League, already of Grand Canyon like proportions, would widen even further.