Scrap 65% Wage Cap?

Is it time to scrap the 65% wage cap? I mean there is no way its being enforced now. The accounts were meant to be review every month in so far as i understood it anyway.

What the point in having it if its not going to be policed, its only got club tittering on the edge of it or tip toeing around it and losing out as a result or the other extreme where clubs are blatantly ignoring the rule as if it doesn't exist.

Or was the rule just something so the powers that be could be seen to be doing something for the league?

There is 2 clubs currently in the Premier division that can not sign players as a result of the wage cap.

I think a rule like that should be implemented to teams that are struggling financially, cause top level teams can cover some of the debt quite easily.

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Originally Posted by TheBoss

I think a rule like that should be implemented to teams that are struggling financially, cause top level teams can cover some of the debt quite easily.

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Originally Posted by TheBoss

I think a rule like that should be implemented to teams that are struggling financially, cause top level teams can cover some of the debt quite easily.

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Originally Posted by gufct

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??????? = Shelbourne

€100,000 debt = struggling financially

€1,000,000,000,000 debt = struggling financially (but considerably more of a headache and far more damaging for the league)

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Originally Posted by TheBoss

I think a rule like that should be implemented to teams that are struggling financially, cause top level teams can cover some of the debt quite easily.

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If a club is in debt it is in debt it doesn't matter if you are 'Top Level' or not. One rule should apply
I don't think it should be scraped but I do think it should be enforced. A random testing of two clubs per month or something like that would proably be the best way of enforcing it. I believe there are clubs falsifing accounts to support players wages.

My mind sometimes wanders :D

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Originally Posted by TheBoss

My mind sometimes wanders :D

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Its alright fella, you're not on your own. The FAI's collective mind is wandering too. I just wish it would wander past their 'brand spanking new rule' sometime soon.


Who'll be talking to Miriam O'Callaghan for the next Prime Time show that focuses on an eL catastrophe?

I would imgine Galway are one of the clubs over the limit as number of players leaving and nobody coming in.

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Originally Posted by TheBoss

I think a rule like that should be implemented to teams that are struggling financially, cause top level teams can cover some of the debt quite easily.

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Debt wasn't the only reason the cap was implemented, hopefully clubs will spend some of the 35% remaining on youth development, facilities and marketing/promotion.

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Originally Posted by The Rebel Ram

A random testing of two clubs per month or something like that would proably be the best way of enforcing it. I believe there are clubs falsifing accounts to support players wages.

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All clubs are checked every month. No need for random testing- they all it's coming.

No clubs would have false accounts as they would be checked by an independent auditor. You would be hard pressed to find an auditor that would sign false accounts.

Its a very good rule in my opinion and well worth sticking with. Ever since full-time football came into the league it has been a case of the top teams spending money, winning the league, finding they have gone in to deep and cutting spending allowing another team that is spending too much money to win the league. The only problem is that budgets can go up in smoke if the team is not doing well on the pitch and wage cuts and fire sales are needed to get back into line, see Galway United.

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Originally Posted by Ceirtlis

Its a very good rule in my opinion and well worth sticking with. Ever since full-time football came into the league it has been a case of the top teams spending money, winning the league, finding they have gone in to deep and cutting spending allowing another team that is spending too much money to win the league. The only problem is that budgets can go up in smoke if the team is not doing well on the pitch and wage cuts and fire sales are needed to get back into line, see Galway United.

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Nail on the head. Take a bow Ceirtlis!

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Originally Posted by DmanDmythDledge

No clubs would have false accounts as they would be checked by an independent auditor. You would be hard pressed to find an auditor that would sign false accounts.

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I think you'd find plenty who sign them off "with qualifications" which is when you know there could be a problem.

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Originally Posted by A face

Is it time to scrap the 65% wage cap? I mean there is no way its being enforced now. The accounts were meant to be review every month in so far as i understood it anyway.

What the point in having it if its not going to be policed, its only got club tittering on the edge of it or tip toeing around it and losing out as a result or the other extreme where clubs are blatantly ignoring the rule as if it doesn't exist.

Or was the rule just something so the powers that be could be seen to be doing something for the league?

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I don't think that's fair, I think it is being enforced on the whole, Galway for one being the proof of that. I think there were always going to be clubs struggling with it in the first year as it required a new way of thinking, and maybe a club or two has been given a bit of month-to-month leeway, particularly in months where they've had lower numbers of home games as happens regularly in the first, at least, but as it goes on clubs will be more aware of having to budget through the season for it.
I know that in our own case it has been a struggle to match the percentage, due to poor attendances rather than a high budget, but through controlled injection of the fundraising cash they've managed to stay compliant, thus far at least. I don't know if it's happened with us but if a club has one home game in one given month and goes over the 65% cap, so long as they are under by a similar amount the next month when they have three home games then I don't see that as a problem.

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Originally Posted by A face

Is it time to scrap the 65% wage cap? I mean there is no way its being enforced now. The accounts were meant to be review every month in so far as i understood it anyway.

What the point in having it if its not going to be policed, its only got club tittering on the edge of it or tip toeing around it and losing out as a result or the other extreme where clubs are blatantly ignoring the rule as if it doesn't exist.

Or was the rule just something so the powers that be could be seen to be doing something for the league?

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Is the FAI no longer policing the accounts ?

Are there multiple clubs clearly in breach of it ?

Something that was designed to mean sustainable development of the league has been rendered worthless by all the get out's regarding "donations". It's not that it's not being enforced, it's that the rule is pointless with the loopholes they allowed.

were not getting any players in because of the wage cap

I think what is happening with/at my club shows the wage cap IS working. Letting clubs spend money they don't have does the league no favours. I don't agree with the begrudgery I have heard from some people (not necessarily on this forum) saying it is okay for the likes of Patds and Drogs, they have big backers so the rule effectively does not apply to them.
Well tough tittie, good luck to them, I would love to have someone with a scatter of money pumping euros into United, but just because we don't is no reason to give off about clubs that have.
So no, for me, they shouldn't scrap the wage cap

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Originally Posted by forza rovers

were not getting any players in because of the wage cap

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I heard we got a tip off that a club may appeal relegation on the grounds that they had to enforce the wage cap and were hence unable to buy players to stay up so a lot of clubs are doing a bit of housekeeping now. It would be a good rule if it applied to operational income but it is abused by donations and money from ground sales.

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Originally Posted by A face

Who'll be talking to Miriam O'Callaghan for the next Prime Time show that focuses on an eL catastrophe?

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My vote would go to Tom, sligobrewer and dcfcsteve..

And back on topic, AFAIK, the accounts are reviewed monthly and there's clear evidence of that in terms of the way the clubs mentioned already have reacted. It's forcing clubs to really take stock of the reality of overspending.

There doesnt seem to be the major scramble for players during this transfer window, (but perhaps it's early days yet) and that would suggest that it's impacting all clubs to an extent. If you look at it, take a club with €40k weekly wage bill, assuming a full year gives you approximately €2m. [Now it's probably lower in the off season cos bonuses aren't paid etc] But these clubs still have to raise/receive about €1m extra to make the 65% rule.

Bloody mad money, don't know how it's sustainable, but I've no doubt that the cap is working at focussing minds if nothing else.

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Originally Posted by Ceirtlis

Its a very good rule in my opinion and well worth sticking with. Ever since full-time football came into the league it has been a case of the top teams spending money, winning the league, finding they have gone in to deep and cutting spending allowing another team that is spending too much money to win the league. The only problem is that budgets can go up in smoke if the team is not doing well on the pitch and wage cuts and fire sales are needed to get back into line, see Galway United.

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Well said.

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Originally Posted by WoodquayBoy

I think what is happening with/at my club shows the wage cap IS working. Letting clubs spend money they don't have does the league no favours.

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Exactly. It clearly is working to some extent. Maybe it's not perfect, maybe there are clubs trying to bend it, but ultimately it's beating financial sense into a load of clubs who would otherwise happily rack up a quarter of a million or more debt in a season just to tread water. There's always a lot of talk about "sustainability" of the league - well, this is it. No more Shels, no more Dublin Cities.

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Originally Posted by Paraic

And back on topic, AFAIK, the accounts are reviewed monthly and there's clear evidence of that in terms of the way the clubs mentioned already have reacted. It's forcing clubs to really take stock of the reality of overspending.

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That's what they said at the FAI fans forum at the start of the season. They had a guy there whose only job is to check those monthly accounts. I've also heard from a Bray official that they have to submit those accounts - so they are being checked.

The wage cap is a good idea. If there are loopholes which allow a club go into debt paying wages, then close them. Either way, keep the rule.

My personal opinion is that 65% should be more than enough to cover wages. If you are going above that, you are not working efficently off the field.

Manchester United has a massive squad, with big wages, but they pay under 40% for wages.

Obviously there are many different elements and it is not like for like, but the principle is their. For a sustainable league, you need sustainable limits.

If there are sugar daddies in the league, then they should donate the money at the start of each year so it is declared and then the club can work off 65% of that as well. Although the problem with that is how long the sugar daddy will be about. But then that is no different regardless of the 65% rule.

Anyway, that is my uneducated opinion as I really do not know the ins and outs.

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Originally Posted by Ceirtlis

Its a very good rule in my opinion and well worth sticking with. Ever since full-time football came into the league it has been a case of the top teams spending money, winning the league, finding they have gone in to deep and cutting spending allowing another team that is spending too much money to win the league. The only problem is that budgets can go up in smoke if the team is not doing well on the pitch and wage cuts and fire sales are needed to get back into line, see Galway United.

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Agree with you Ceirtlis, just wish it was enforced a few years ago.....

Is there evidence that this is not being enforced? The FAI have a permanent accountant who only deals with this so I have no reason to believe not policed.

I may not like that some clubs get massive donations/investment but it also would be ludicrous to prevent that. At least with this rule clubs cannot amass large Director loans & then face financial ruin when the Directors call in the loans.

It could be suggested that 65% might have been too difficult for clubs to move to in such short space of time.

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Originally Posted by pete

At least with this rule clubs cannot amass large Director loans & then face financial ruin when the Directors call in the loans.

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No, they'll just get their grounds sold from under them instead.

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Originally Posted by Macy

No, they'll just get their grounds sold from under them instead.

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Which could happen regardless of any 65% rule

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Originally Posted by bigmac

Which could happen regardless of any 65% rule

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Obviously, but if the club was paying for itself then recouping inputs would be one less reason for it to happen.

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=pete;975769]Is there evidence that this is not being enforced?

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No evidence at all - Just another unresearch post to mislead on here. The rule is spot on - it is being enforced and if clubs cant live within it's parameters then they should be taking a long look at how they operate.

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Originally Posted by pete

I may not like that some clubs get massive donations/investment but it also would be ludicrous to prevent that. At least with this rule clubs cannot amass large Director loans & then face financial ruin when the Directors call in the loans.

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I'd tend to agree with that. What's the point in crying out for people with big bucks to invest in the league and then effectively putting a block on that ? As Steve Bruce said, such investment should be declared and included for the purposes of the 65% rule. Whats the problem with that ? I'd agree that directors loans, which are liable to be repaid are problematic, and could leave clubs on extremely dodgy ground. I'd seperate investment from loans. Now clearly I'm biased because of whats happening at Pats, but there's a huge difference between what happened at Shels and someone with bags of money buying a club and sinking money into it.

I think it's a great idea. It teaches clubs to live within their means and, hopefully, it will mean no more implosions like Shels or Dublin City.

All clubs agreed to its implementation and now we are seeing that there will be no exceptions with Galway.

I don't see how scrapping it coule be justified.

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Originally Posted by A face

Is it time to scrap the 65% wage cap? I mean there is no way its being enforced now. The accounts were meant to be review every month in so far as i understood it anyway.

What the point in having it if its not going to be policed, its only got club tittering on the edge of it or tip toeing around it and losing out as a result or the other extreme where clubs are blatantly ignoring the rule as if it doesn't exist.

Or was the rule just something so the powers that be could be seen to be doing something for the league?

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What a load of rubbish A face !
Can you give us some facts ???

I mean the rule was brought in to catch clubs that go outside the limits. The rule is working in so far as some clubs have been caught out and you think thats a reason to get rid of the rule ?

:eek:

The only problem with the rule in my opinion is that when you reach a certain turnover you should be allowed upwards of 65%. Clubs bringing in big money should not be kept to 65% as the costs for running a club are not linear the more you take in. e.g. We all pay the same ESB bills for Floodlights, Shels or Drogheda. I think a 70% or 75% should be allowed for the clubs with a bigger turnover.

If we did not have this rule to restrict loans to clubs I would be very concerned with Arkaga running Cork City, Under current rules they can invest money but if they decide to leave can't leave us with a large debt.

A wage cap is good if used properly I think 65% across the board is wrong as pointed out before some clubs have few other expenses and have to raise an additional 50% income to reach the 65%, each club should be assessed and given a %. Investors money should be channeled towards long term improvments such as grounds and setting up youth academies rather than grossly inflating players wages for which all clubs suffer in the long run.

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Originally Posted by TonyD

I'd tend to agree with that. What's the point in crying out for people with big bucks to invest in the league and then effectively putting a block on that ? As Steve Bruce said, such investment should be declared and included for the purposes of the 65% rule. Whats the problem with that ? I'd agree that directors loans, which are liable to be repaid are problematic, and could leave clubs on extremely dodgy ground. I'd seperate investment from loans. Now clearly I'm biased because of whats happening at Pats, but there's a huge difference between what happened at Shels and someone with bags of money buying a club and sinking money into it.

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Whats to stop the money the "doner" gives being used for other expenses or ground improvements. If someone pays for a new stand, its probably going to do more log term good than paying a players mages for the year.

I'm 100% behind strict enforcement of the wage cap rule. It makes sense in every way for me. If directors want to plow their money into a club, they can spend it on any numerous ways before evr touching players wages.

Oh and for the record, I'm amazed we're under this but the club are fully aware of fit (talking about it at previous fan meetings) and obviously no sanctions have been taken by these monthly reviews, so maybe they know the rules better than we do (as per Macy's first post)

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Originally Posted by Paraic

My vote would go to Tom, sligobrewer and dcfcsteve..

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Me meet Miriam?

Thanks Paraic!:D:D

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Originally Posted by higgins

What a load of rubbish A face !
Can you give us some facts ???

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Higgins, i was posting that half tongue in cheek, looking to provoke some debate on the topic. I fully agree with the rule. I dont have one fact to back up the first post.

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Originally Posted by John83

The wage cap is a good idea. If there are loopholes which allow a club go into debt paying wages, then close them. Either way, keep the rule.

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Much and all as I don't like the current trend of clubs having losses of over a million a year covered by financial backers and calling it "ambition", if the money is being put into the club, as it seems it must with the new regulations, then there is no such loophole. The problem was with clubs racking up debt or directors' loans; if that's not allowed, then the 65% wage cap is doing its job.

I think what's happening at Galway shows how good it is - it's (I assume) nipping Galway's troubles in the bud before they can become too serious.

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Originally Posted by pineapple stu

I think what's happening at Galway shows how good it is - it's (I assume) nipping Galway's troubles in the bud before they can become too serious.

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Its effectively cutting their cloth for them, which is definitely a good thing. If it means that they stay around as a club, and drop to the first and not go to the wall then its working perfectly.

Sooner or late the word will catch on that you have to have a sound financial plan to get where you want to go and clubs have to focus on streams of revenue a bit more. Good management, even if it is only as a result of the conditions/rules in place then its great.

Its has been proved in the past at many clubs that self regulation doesnt work. Egos, greed, stupidity etc takes over and before long clubs are spending money they havent got and digging a big hole for themselves. I think the rules should go further, I honestly dont thikn there is much benefit to the league as a whole having 2 or 3 clubs burning crazy money on players instead of putting it into facilities and schoolboys etc. I tihnk the wage cap go further and should be tied into gate receipts. This would force clubs to work harder to get fans on board and then if so called "sugar daddies" want to throw money in, then that money would have to be spent on facilities. 10 years of a setup like and the leagues structures would be much stronger!

Any fan pleased to see their club burning money on players they cant really afford is a fool! They are only getting closer and closer to a Shels style meltdown.

bhs

The 65% wage cap is a good thing IMO. And the director donation rule protects the clubs well. Although I would have one criticism.

The current situation in Galway shows the good side and bad side of the rule in its current format.

The good is that Galway are having to cut back and not overspend in the hope of staving off relegation and potentially send them into debt which could set them back for years.

However, the bad side is that the players are not being protected. They are being forced to take wage cuts and contracts are being terminated. This is not a good image for the league and its not good for players.

Dealing with this wage cap on the fly, as seems to be the way its done is flawed. Budgets should be set out at the start of the season and should not change mid season.

If the 65% applied to the previous season's turnover as well as any director donations/top-ups at the beginning of the season, then everyone would know where they stand for the year, and players contracts would be more secure.

Setting a 65% wage cap budget for the current seasons turnover is stupid.

The running 65% limit does seem a little silly.
In previous years a club like Galway would have realised they made a big mistake!! go into some debt but manage that debt by offloading players in transfer windows and again during the off season.

The public wouldn't be any wiser as to what was going on. Galway would have dipped their toes into the fulltime water and realised they made a mistake and probably spend a few seasons part time paying off the debt.

Going over 65% in one season does not mean the club are close to going bust!!!

There really is an over reaction to this and it leads to bad publicity for the league. We're catching a problem in the very very very early stages but media in this country just think it's another Irish club in big trouble and report it.

I think if this rule sticks around in its current form we'll see this happen every season in some form. Not all clubs will have a perfect budget as results on the pitch can throw you off but it doesn't mean you are heading towards meltdown.