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Should it be a 50% Wage Cap, in light of whats gone on this season. Clubs have to reel things back in and improve structures. The focus cannot be just on the pitch any longer. Also licencing needs to change allowing mechanisms to be put in place for the FAI to come down on clubs who are abusing the situation. They need to look at various performance indicators throughout the season, not just at the end of the season.
A bit like the reduction in driving driving limit, tougher rules without enforcement is pointless.
Consistently enforce the 65% and then when most clubs are in compliance consider reducing it.
As ORA said, the % is fine, it's enforcement that's the issue.
65% as a level only be considered for change when we have some infirmation built up on whether it's workable under proper enforcement
ORA is correct. The cap as it stands is probably sufficient. If it had come in at a point where the league was debt free and been enforced stringently, I think it'd be enough, but if clubs are undermining it (as Derry at least have been accused of), it's meaningless to reduce it.
Clubs have got to be sensible and only spend what they can afford.
FAI shouldnt have to police any club.
Ourselves and Derry have been hit hard with one big dose of realism.
The % is stupid, there shouldn't be a wage cap on annual turnover because the clubs don't know what their annual turnover will be until the end of the season and they budget for way too many fans than they can ever hope of getting (I think we were budgeting for 300 fans, 6 times what we were getting at the end of the prior season), unless of course the players are paid by commission rather than set wage, as in the get 65% of the bi-weekly income or something.
What about the system in Australia where all clubs have a the same budget. also budgets rules must indeed be inforced
Spot on.Quote:
Originally Posted by OneRedArmy
The analogy is excellent - government introduce new laws to deflect public opinion without proper enforcement of current ones.
FAI are also political animals by instinct - hence 65% rule expanded to cover management and coaches, but no credibility exists regarding enforcement of current rules. Maybe the fudge perception will change if the FAI follow through with some tough decisions this close season.
The concept of controls and regulations such as the 65% SCP is interesting and highly relevant particularly in the light of Derry's situation. You can reasonably speculate that the (alleged??) double contracts business was in part designed to save money by defrauding the tax authorities but also to circumvent the 65% SCP. I would be astounded if this practise was isolated to Derry City.
Its simply a further illustration that where the will exists within clubs to ignore and bypass the intention of the regulation, the temptation and pressure to do so is very strong.
From my experience and observation the main origin of this pressure or 'demand for success' comes primarily from supporters who tend to be blind (or want not to see) to the financial realities. I am witnessing otherwise intelligent people strongly and passionately arguing for budgets at Dundalk which are unsustainable in my opinion. It takes strong people to do the right thing, and resist unreasonable demands from some supporters.
A wage cap regardless of the % still won't guarantee clubs remain solvent.
All clubs have different cost structures regardless of income and player wages
Clubs travel bills will vary depending on so many factors such as their location and means of travel, coach / air / train etc
Some clubs will be paying high rents for their grounds others may actually be receiving a net income from thier ground.
A better way may of insisting all clubs finances are in order on a monthly basis, by way of a monthly inspection by an FAI compliance officer to ensure all players wages are fully paid, taxes up to date, other creditors are paid up to date per agreed credit terms. This is real Big Brother stuff but too many clubs are not willing to operate in a responsible manner and this is the result.
Any club whoses finances are not in order on the inspection date each month would be automatically deducted say 3 points and this may if strictly enforced be enough to eradicate the problem.
It would make it possible to win the league with a minus total of points:DQuote:
Originally Posted by Greenforever
The league would run out of astericks*****
That would be ideal if possible, and the owness should be on the clubs to provide all the detail and clarify any ambiguity in the books.Quote:
Originally Posted by Greenforever
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Originally Posted by A face
A template should be set out as part of the licensing agreement something along the lines of
Are all wage paid up to date in full (PFAI to issue a cert to prove this be email)
Are taxes paid up to date (receipts to be provided)
Are all other suppliers etc paid up to date (not so easy to prove but suppliers may be quick to contact the compliance officer if they cant get paid)
A cert to be signed off by Accountants / Auditors
While there may be an additional cost placed on the clubs it would be minimal for the ones actually running their affairs properly as a business.
I suppose the type of suppliers dealt with would be similar throughout the league as it would be the same type of services products that clubs would have to avail of. The FAI would also have a fairly good guess at what is actually needed by clubs to get the show on the road.Quote:
Originally Posted by Greenforever
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Originally Posted by A face
Generally the first bills companies dont pay if they are in trouble are the revenue, followed by suppliers that can be put off and lastly wages.
THe fact that wages are unpaid are a very bad sign for any business...
Mind you given that wages account for such a big percentage of overheads in football it is nos surprising that they go unpaid so quickly if the club is in trouble.
I think that's a good idea; if clubs had to get the final seal of approval from an unbiased, uninvolved third party it might be the kind of rubber stamp you could trust.Quote:
Originally Posted by Greenforever
That's exactly right. It's impossible to guarantee that you will spend less than 65% of turnover when you don't know what your turnover is going to be. Yet you have people saying Bohs etc have "cheated" by possibly spending more than 65%. If they'd hung on for a couple more mins against Salzburg they'd have been comfortably within the 65%, but because they didn't they might not be, and that makes them "cheats". It's ludicrous. I'm not saying Bohs etc have been as sensible as they should have been on the financial front, but it's hardly cheating, and it's bizarre to have proposed penalties such as relegation for failing to predict your turnover accurately enough.Quote:
Originally Posted by christo
If they do stick to the 65% cap, it needs to be retrospective, i.e. based on turnover last year. That means each club knows exactly what its cap is before the season starts, and then there really is no excuse for breaching it. Of course, the problem is it would not guarantee that clubs can afford to keep paying their wages, e.g. if turnover drops dramatically from last year (which it could easily do).
It's a good system and it has made the A-League arguably one of the most competitive leagues in the world. There is a big downside though - the cap has to be set at a level that the poorest clubs can afford, as otherwise it does nothing to prevent those clubs going bust. This would weaken the ability of EL clubs in Europe, as for example, it would mean that Bohs would have to go into the CL next year with a wage bill that the likes of Bray and UCD can afford. A return to poor European performances could have very big implications for both individual clubs and the league as a whole.Quote:
Originally Posted by christo
It's ridiculous that the main motives of the clubs is wages, look at the state of our stadiums.We need to sort that out first imo
Thats the argument that prompted me to post the poll. I disagree though, i think things are so bad that clubs really need to integrate into the community first and identify with their potential fan base, to be able to do that teams need to perform as best as possible.Quote:
Originally Posted by Riddickcule
They shouldn't be budgeting on cup income bar the first game in the first place. That doesn't excuse them and make the system ludicrous, it makes bohs budget ludicrous.Quote:
Originally Posted by Nedser
As others have said, get enforcement on the current limit first, then look at reducing it. I think the FAI widening the base is tacit acceptance that clubs are finding ways around the rules - are there many "player coaches". Do the new rules include barmen?
A combination of Both would be the solution, the 65% cap is set at the begining of the year based on prior year t/o, any breaches result in punishment (points not fines). At the end of the current year a review should take place that can show that the club was within the 65% for the current year, again punishment if breached, I would suggest a yellow card for minor breaches (due to the more difficult task of predicting turnover for the current year) unless it's a serious breach, in which case a point deduction for the following season or possible demotion if it is serious enough.Quote:
Originally Posted by Nedser
That's the problem, you're effectively dragging everyone down to the lowest level, not the solution for the LOI. It works in Oz because the clubs are generally the playthings of wealthy owners and because of the clean slate franchises that were established when the league was started meant everyone was on a pretty even level from the outset.Quote:
Originally Posted by Nedser
Bohs budget may or may not be ludicrous - I previously acknowledged they may not have been too sensible. Having said that, it looks like they have managed to stay within the 65%, in which case their budget can't have been that bad.Quote:
Originally Posted by Macy
Either way, it doesn't change the fact that having a salary cap based on a percentage of future turnover is ludicrous. No-one can seriously expect clubs to be able predict future income accurately. The revenue of the company that I work for (a very large multinational company) looks like being about 30% below budget this year. Many other large companies have got it even more wrong in recent times. Do you seriously believe the average EL club can be expected to be better at budgeting that some of the biggest corporate entities in the world?
Anyway, leaving the above aside, my other point is that if a club gets the prediction of their future revenue wrong by relatively small margin, it's nonsense to say they've "cheated". When a striker starts a run slightly too early and gets caught offside, he's broken the rules, but we don't say he's a cheat, do we?
If the salary cap is set in such a way that clubs know what it is, and then knowingly breach it, that would be cheating. As things stand though, a breach of the salary cap is more likely to indicate incompetence than cheating.