View Full Version : Dolan- 'Wage Cap is Stupid"
Pat Dolan reckons that the 65% of turnover wage cap due to come in next season is stupid and unworkable.
See http://www.elevenaside.com/eircomleague/irish_soccer_detail.asp?newsid=29213
Dodge
07/09/2007, 11:17 AM
I thought he might. We're still trying to pay off the debts from his last squad of 40+ players
Schumi
07/09/2007, 11:20 AM
He's half right. It's not stupid but it probably is unworkable.
superfrank
07/09/2007, 11:30 AM
It'll be very much unworkable if the figure is set at "65% of turnover". An exact figure calculated for every individual club based on it's financial situation would be a better idea but probably equally as hard to implement.
The wage cap is a brilliant idea though, imo.
Aaron
07/09/2007, 11:55 AM
There's no doubt that the wage cap is an excellent idea. Shels are a prime example of why it is needed. Whether it is workable or not remains to be seen. My main concern would be quality players would go accross to lower standard clubs for more money in ENgland because some of out top clubs here can't break the wage cap to keep them.
This has been flagged for a long time. The FAI at this stage should have given careful thought to and taken advice on how to administer this rule. If it can't be enforced there isn't a lot of point, but if it can it'll be a big step forward for the league.
monutdfc
07/09/2007, 12:05 PM
And not only how to monitor/administer the rule but what the penalties are for breaking it
And not only how to monitor/administer the rule but what the penalties are for breaking it
Warnings, were necessary severe ones aplenty methinks will be the height of it.
Personally I think there should be a scale of punishments from fines or points deductions for minor infractions to relegation to the complete withdrawal of a club's license for repeated infringements.
It'd have to be sufficiently well thought out so as not to heavily punish clubs that are generally well-run but have one nightmare season (I'm thinking Harps last season here) which causes the percentages to be artificially altered yet have teeth enough to deter consistent bad practice.
Jaime
07/09/2007, 12:17 PM
There's no doubt that the wage cap is an excellent idea. Shels are a prime example of why it is needed. Whether it is workable or not remains to be seen. My main concern would be quality players would go accross to lower standard clubs for more money in ENgland because some of out top clubs here can't break the wage cap to keep them.
There is more than one team in this league who have at some stage been extremely close to going to the wall...
Dodge
07/09/2007, 12:32 PM
There is more than one team in this league who have at some stage been extremely close to going to the wall...
Would be surprised if there was more than one team that hasn't gone close to going bust...
Jerry The Saint
07/09/2007, 12:48 PM
Pat Dolan reckons that the 65% of turnover wage cap due to come in next season is stupid and unworkable.
See http://www.elevenaside.com/eircomleague/irish_soccer_detail.asp?newsid=29213
I think Dolan was actually setting up this joke on purpose but anyway, here goes...
Pat Dolan has some cheek talking about Stupid Caps (http://www.wexfordyouthsfc.ie/photos/58.jpg)
:D :ball: :D
Dodge
07/09/2007, 12:55 PM
Easy! Easy! Easy!
gilberto_eire
07/09/2007, 1:24 PM
It'll be very much unworkable if the figure is set at "65% of turnover". An exact figure calculated for every individual club based on it's financial situation would be a better idea but probably equally as hard to implement.
The wage cap is a brilliant idea though, imo.
but is it now put down indivisually considering its 65% of there turnover??.... every club will have differant turn-over!!
There is more than one team in this league who have at some stage been extremely close to going to the wall...
I know what you mean but no other club in this island has been sanctioned like Shels were and i'd comfortably say no other team has run up the debts Shels have. We ourselves were extremely close to going bust, but our debts were dwarfed by the enormity of that of Shels
superfrank
07/09/2007, 2:06 PM
but is it now put down indivisually considering its 65% of there turnover??.... every club will have differant turn-over!!
But some clubs could be making a lot of money on transfers, especially with the supposed compensation rule to come in, and very little on attendances. In these cases, a different figure should be calculated, imo.
passerrby
07/09/2007, 2:12 PM
two different issues here firstly pat is wrong again the league needs this if it to be taken seriouly by both investers and by the revenue in terms of future tax breaks but i am weary of the licencing department controling this for example do clubs get punished at he end of the season ater they publish there annaul acounts thereby altering the tables for winners and losers and will the fai have the stomich to penilise certain clubs after the league ends a makeing us look even more silly. a sticky one but neccessary
superfrank
07/09/2007, 2:16 PM
It happens in other leagues. Clubs get thrown out of the league over licensing issues or financial irregularities. La Louviére in Belgium where refused a license over a gambling scandal and ended up in the Belgian regional leagues. Ferencváros in Hungary were dropped down a few divisions over board corruption, iirc. Then there's the whole Serie A scandal although the punishments were relatively milder.
With the demotion of Shels, it's been shown that the FAI do have some balls and it's up tot he clubs to see they won't get away with it.
passerrby
07/09/2007, 2:21 PM
i would like to think so to but shels was a long time coming and licensing had to be pushed to make any dicision.
i think there is a lot of clubs presently in breach of there licences without any major punishments
Schumi
07/09/2007, 2:23 PM
But some clubs could be making a lot of money on transfers, especially with the supposed compensation rule to come in, and very little on attendances. In these cases, a different figure should be calculated, imo.
There are several issues to be addressed.
The most basic is what counts as turnover. Would a high turnover, low profit addition to the a club (e.g. a pub) allow a club to spend loads of money on wages?
Secondly when would a club's turnover be calculated? If it's after the season, a bad season and subsequent loss of crowds could leave a club having wage commitments above 65% of their turnover through no real fault of theirs. If the turnover figure is calculated before the season, is it based on a projected budget? If so, I'd be concerned given the lack of action on budgets from Dublin City when they went bust that were clearly ridiculous.
There are most likely other issues too but these are the first ones that come to mind.
superfrank
07/09/2007, 2:24 PM
Well I don't think they should remove clubs in the middle of season. In fact, I doubt anyone believes that's the way to go. Points deductions are the best way during the season, imo.
I don't think fining el clubs is the way to go. They're not exactly rich as it is. Demotion and something like the English FA did to Leeds a few days ago would be good. They can't vote on general FA issues and they can't get international tickets for the club.
Bald Student
07/09/2007, 2:27 PM
Personally I think there should be a scale of punishments from fines or points deductions for minor infractions to relegation to the complete withdrawal of a club's license for repeated infringements.Instead of all that (or maybe on top of it) the FAI should target the problem directly. Put a transfer ban on the club to stop them signing any players and allow all the players they have to leave as free agents. It'll get the wage budget back below 65% in no time.
Ideally, do this during the mid-season transfer window.
passerrby
07/09/2007, 2:29 PM
agreed but can youn assess a clubs finances midway through the season or do you wait to see the audited accounts
passerrby
07/09/2007, 2:36 PM
just being reading some information on this and i think the budget will be assessed by licensing before a season begins loking at previous returns if clubs wish to increase this they must show cause.
And there's always a risk that this sort of regulation could just force a lot of payments under the table. In my opinion that sort of practice should carry very serious penalties for any club caught doing so.
superfrank
07/09/2007, 2:38 PM
The most basic is what counts as turnover. Would a high turnover, low profit addition to the a club (e.g. a pub) allow a club to spend loads of money on wages? If the club has a low profit margin, it's there business to address. They should look at ways to cut expenses. After all, you don't have to fill the wage cap.
Secondly when would a club's turnover be calculated? If it's after the season, a bad season and subsequent loss of crowds could leave a club having wage commitments above 65% of their turnover through no real fault of theirs. If the turnover figure is calculated before the season, is it based on a projected budget?
Calculating their average income from attendances, season tickets, merchandise, sponsorships, etc. over the last, say, 3 seasons, and then finding the average income for every season.
After that, find out the variant in income was for every season, say it's 0% for the first season, it went down 10% for the second season and then rose by 15% in the third season. It might give an idea of how income is related to the teams on the pitch performance.
After all that some sort of projected budget could be drawn up and then it should be underestimated by a fair percentage, for safety's sake.
Schumi
07/09/2007, 2:44 PM
If the club has a low profit margin, it's there business to address. They should look at ways to cut expenses. After all, you don't have to fill the wage cap.My point is that if a club has an income of 1 million, say, it could spend 650k on wages. But if the club buys a pub which has an income of 1 million and spends 900k on its expenses, can the club claim an income of 2 million allowing it to spend as much as they want on wages or is its income 1.1 million allowing it to spend 715k on wages? It's a technical point but could make a big difference.
superfrank
07/09/2007, 2:51 PM
I think if the pub were located inside the clubs grounds, they should claim it as part of their assets but if it's just a pub they bought for the sake of it with no intention of making it a club pub or with any association with the club apart from the ownership, I don't think it should.
It'd be like owning a very succesful racehorse in the clubs name. The horse could win loadsa races and make a lot of money for them but it's income that's got nothing to do with the club and if the horse died or got injured they'd lose all that income.
Schumi
07/09/2007, 2:54 PM
That's a bit hard to specify in the rules though!
I think if the pub were located inside the clubs grounds, they should claim it as part of their assets but if it's just a pub they bought for the sake of it with no intention of making it a club pub or with any association with the club apart from the ownership, I don't think it should.
It'd be like owning a very succesful racehorse in the clubs name. The horse could win loadsa races and make a lot of money for them but it's income that's got nothing to do with the club and if the horse died or got injured they'd lose all that income.
Strange logic. All they have to do is advertise the pub as being owned by the club and they can say its the official pub for the club's fans.
superfrank
07/09/2007, 3:02 PM
Strange logic. All they have to do is advertise the pub as being owned by the club and they can say its the official pub for the club's fans.
Yeah I know and who's to say it's not. It'd be very tough to prove that the pub's income is or isn't generated by fans.
Ok, then no such pub's income should be included as turnover. If they want a pub like that, they can open a bar in their clubhouse or grounds and have open to ticket holders only and only on matchdays, etc.
Yeah I know and who's to say it's not. It'd be very tough to prove that the pub's income is or isn't generated by fans.
Ok, then no such pub's income should be included as turnover. If they want a pub like that, they can open a bar in their clubhouse or grounds and have open to ticket holders only and only on matchdays, etc.
So now you're advocating clubs making less money? :eek::rolleyes:
Point I'm making is what difference does it make how the club makes the money? If a club runs a golf day, the money comes from outsiders. If they run a quiz night and raise €500, should the €250 that came from supporters be the only bit that counts towards this mythical turnover figure?
superfrank
07/09/2007, 3:10 PM
Point I'm making is what difference does it make how the club makes the money? If a club runs a golf day, the money comes from outsiders. If they run a quiz night and raise €500, should the €250 that came from supporters be the only bit that counts towards this mythical turnover figure?
Fair enough, it doesn't really matter.
I guess personally I'd rather clubs focus on making their money through their fans.
I guess personally I'd rather clubs focus on making their money through their fans.
Why?
I'd much rather Pats made their money every way they possible could, and didn't have to depend on the fans.
superfrank
07/09/2007, 3:23 PM
Why?
Loyalty is a big deal to me.
Loyalty is a big deal to me.
Whats that got to do with the club making money? How can the club owning a pub or a racehorse (in your example) effect the club's attitude towards you.
superfrank
07/09/2007, 3:36 PM
Whats that got to do with the club making money? How can the club owning a pub or a racehorse (in your example) effect the club's attitude towards you.
I realise my personal feelings don't matter in the world of business. I'm still young so I'm an idealist and ideally any club would be self-sufficient on the support of it's fans. Personally, I think clubs are pimping or selling themselves with sponsors or events even thought they do benefit the club. It's a personal moral dilemma.
pineapple stu
07/09/2007, 6:21 PM
I thought he might. We're still trying to pay off the debts from his last squad of 40+ players
:confused:
Off topic I know, but you're not trying very hard if you're losing a million a year? (Genuine confusion, not WUMming...)
Anyways, how does the system work in England, does anyone know? And does it actually do any good?
I think the FAI should have started at say 80% & work the way down to 65% over maybe 2 years. I think 65% overnight change may be too much for a lot of clubs.thly
The only way this could be policed if via monthly submission of accounts.
The only way this could be policed if via monthly submission of accounts.
Clubs already submit monthly accounts for licensing as far as I know.
Clubs already submit monthly accounts for licensing as far as I know.
We all know how well that has worked..
Tenderloins
13/09/2007, 10:28 AM
If this does come in then surely the transfer windows will have to be abandoned.
Say a club budgets incorrectly for the season (ie reckons on a cup run or bigger gates or sponsors go bust).
when in need of cash from a transfer they will not be able to sell them.
They may not be able to release palyers either , unless they pay off the rest of their contract etc.
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