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Ipswich Town’s stance on salary cap proposals outlined by O’Neill

PUBLISHED: 06:00 17 July 2020

Ipswich Town owner Marcus Evans (left) and general manager of football operations Lee O'Neill. Photo: Steve Waller

Ipswich Town owner Marcus Evans (left) and general manager of football operations Lee O'Neill. Photo: Steve Waller

© Copyright Stephen Waller

Ipswich Town’s general manager of football operations, Lee O’Neill, believes the introduction of a salary cap in League One would be unfair.

Ipswich Town would have struggled to beat Championship clubs to the signing of James Norwood had a salary cap been in place last summer. Photo: PagepixIpswich Town would have struggled to beat Championship clubs to the signing of James Norwood had a salary cap been in place last summer. Photo: Pagepix

The huge financial impact of the coronavirus crisis has hit lower leagues clubs hardest and sparked discussions about immediately introducing limits on pay and squad sizes.

Currently, League One clubs have to adhere to the division’s Salary Cost Management Protocal (SCMP) Financial Fair Play rules, which stipulate that player wages can’t be any more than 60% of turnover.

To replace that, a flat cap of £2.5m at League One level and £1.25m for League Two has been put forward by the EFL.

For Ipswich, that would necessitate a further slashing of the wage bill following on from a drop of close to £19m in the Championship to a figure understood to currently be around the £6m mark. There would, however, be some transitional leeway with contracts signed before any rule change treated as being an average for the division.

Jon Nolan (pictured) and Tomas Holy were both handed one year contract extensions recently ahead of the potential introduction of a salary cap. Photo: Ross HallsJon Nolan (pictured) and Tomas Holy were both handed one year contract extensions recently ahead of the potential introduction of a salary cap. Photo: Ross Halls

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It’s believed that there is significant support for the proposals, which are set to go to a vote among EFL member clubs later this month.

“It’s an issue we’ll have to address – it will put restrictions on us,” said O’Neill, who admitted that the salary cap proposals was the reason behind extending the contracts of Tomas Holy and Jon Nolan recently.

“I can definitely see why smaller clubs want it because it could give them a more level playing field. We don’t necessarily want it to happen.

The likes of Barry Cotter, who is 21, would count towards the senior squad limit of 20 under new proposals. Photo: Steve WallerThe likes of Barry Cotter, who is 21, would count towards the senior squad limit of 20 under new proposals. Photo: Steve Waller

“It would have been better if they’d been able to make Financial Fair Play rules truly work. That’s a self sustainability model which would be fairer than an across the board salary cap.

“We feel that if you have a fan base that is size ‘X’ that brings you in revenue of ‘X’ then you should be able to invest as much of that money into your squad as you like.

“When you look at some of the figures being mentioned for salary caps in the Championship (£15-20m), League One (£2.5m) and League Two (£1.25m) then there are going to be some big gaps between the divisions.”

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Barry Fry says Peterborough United are 'okay' with the League One salary cap proposals. Photo: PABarry Fry says Peterborough United are 'okay' with the League One salary cap proposals. Photo: PA

There is also talk of limiting squads to 20 senior players aged over 21. Town currently have 17 players in that bracket.

Senior figures at Sunderland and Portsmouth have spoken out against the salary cap proposals in robust terms, as have the PFA.

Pompey’s chief executive Mark Catlin said: “Should salary caps come in, those clubs with a 40,000 average attendance and generating huge commercial revenues will be only allowed to spend the same as clubs with a 2,000 attendance and no commercial income. How can that be right? It is an absolute disgrace.

“It’s a crazy proposal which is supposed to be about sustainability, yet Pompey are going to be unable to spend what we can afford.

“However, this still encourages almost three quarters of the league to use their owners to put money in to get to our wage structure. Basically, it caps the top clubs that can afford it.

“I have been arguing for a cap linked to turnover, a cap linked to operational profit, a cap linked to anything which allows the larger clubs to operate properly. It makes no sense to me.

“This isn’t about sustainability, this is about homogenising and levelling the playing field in League One.

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“In my opinion, this is a knee-jerk reaction to the current Covid-19 situation.

“The whole thing is a shambles and something we will be fighting against in the strongest possible way moving forward – and we are not alone.”

Jim Rodwell, Sunderland’s chief executive, said: “We don’t think that the proposed flat cap on salaries makes sense. We are all for running sustainable football clubs, but sustainability is not the same as levelling the playing field. Next thing you know there will be conversations about sharing gate receipts like they did in the early 1980s!

“I think the EFL are oversimplifying the sustainability issue. For a lot of clubs in League One, a £2.5m cap on wages is highly attractive, but our argument is that as a big football club we can generate more revenue and therefore we should be able to spend that revenue on players while remaining sustainable.

“This issue is not supposed to be about level playing fields, it is supposed to be about sustainability and trying to avoid what has happened to Wigan and to Bury.”

PFA chief executive Gordon Taylor said: “What we are not opposed to is financial fair play; clubs revealing balance sheets, showing what they have to work with and working within clear parameters. But what that does require is good monitoring from the centre or an independent body.

“Clearly, we don’t want to see clubs go bust and we don’t want to see another Bury happen. Wages need to be at a sustainable level, we know what can be sustained and what can’t be and there are lessons to be learned from Bury and other cases.

“But when we’re talking about caps for each division, it moves matters to the lowest common denominator and that’s not fair on those innovative, well-managed clubs who are prepared to have a go within their means.”

Shrewsbury chief executive Brian Caldwell said: “We would probably vote for it as it is probably the best time for football to try and be seen to be controlling costs in League One. However we do have some reservations, for example with clubs who budget well below the threshold and could actually push their budget and spend £2.5m even though they may not be able to afford it.”

Peterborough’s director of football Barry Fry said: “We are okay with the idea of a salary cap as it doesn’t include the wages of players under 21. We could certainly work with the £2.5 million figure.”


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