EFL COLUMN: PFA SHOOT THEMSELVES IN THE FOOT WITH SALARY CAP SHORT-SIGHTEDNESS
This week saw an independent arbitration panel overturn the EFL’s decision to introduce salary caps in both League One and League Two, following a claim by the Professional Footballers’ Association.
The decision to appeal the introduction of a maximum annual spend of £1.5m in League Two and £2.5m in League One makes sense on the behalf of the PFA. The players they represent were less likely to command the wages they once could, and more significantly, many clubs would be unable to take on the number of players they had in the past under the restrictions.
The cap was introduced after the majority of clubs in both divisions agreed to it, coming into effect in August 2020.
The timing was no coincidence. Covid-19 had decimated the finances of EFL clubs, meaning many were desperate for a bailout from the Premier League. Regulations to ensure such an event would not cause as much uncertainty in the future, as well as promoting sustainability in a more general sense, were therefore welcomed by the majority.
However, there were a number of clubs who felt the restrictions were unfair.
Eight clubs in total voted against the proposal, six in the third tier and two in the fourth, with Portsmouth CEO Mark Caitlin labelling it ‘an absolute disgrace’. It was therefore no surprise to see a number of the traditionally wealthier sides in League One expressing their delight at the overturn.
These clubs will now be able to bring free agents on board to strengthen their squads for the remainder of this season, and they can now be far more aggressive with their spending in the summer transfer window, but is this greater freedom really going to benefit the EFL as a whole?
The main argument in favour of removing the caps was that they go against the spirit of competitiveness and that they would massively hamper sides promoted from League One into the Championship – a league in which the clubs voted against introducing a cap in January of this year.
Whilst those concerns are valid, it is only three clubs that get promoted from League One every season - the threat of them struggling in the second tier should not be prioritised ahead of the wellbeing of the other 45 clubs.
Reckless spending was not the primary cause of the demise of both Bury and Macclesfield, more so shambolic ownership, but introducing restrictive legislation on the amount all clubs can spend provides a universal safety net that prevents owners spending beyond their means and should in theory help prevent the tragic loss of more football clubs.
Accrington Stanley chairman Andy Holt expressed his disbelief on social media following the decision to overturn the caps:
“Football has been incapable of managing formulae like FFP (Financial Fair Play) and SCMP (Salary Cost Management Protocol). A landscape littered with broken clubs amply demonstrates this. A salary cap that I thought even we at the EFL couldn’t get wrong, well money has talked and we managed to get that wrong.”
His club are the perfect example of one that lives within its means yet is still more than competitive. Stanley pick up players either on loan or from the lower leagues, and thanks to the fantastic management of John Coleman they are sat on the brink of the League One play-off places with games in hand on those above them.
Their success in recent years suggests that Holt is someone probably worth listening to on the subject.
The caps were overturned on a technicality – the independent panel felt the EFL had not properly consulted the PFA before implementing them – not because of suggestions it harmed competitiveness or penalised the ‘bigger’ clubs, indicating there is room for adapting the original idea.
The current caps were brought in hastily, voted through by clubs fearing for their existence, taking time now to improve the legislation with a guaranteed loan from the Premier League on the way should be the EFL’s next step.
Before the initial caps were introduced, Peterborough owner Darragh MacAnthony put forward the idea of a tiered system whereby clubs would only be able to spend a certain amount of their income. This would incentivise clubs to maximise their incoming revenue whilst also ensuring they cannot spend money they have not earnt.
The current profitability and sustainability regulations are far too lax and have regularly been abused by Championship clubs in particular, so a more stringent system such as the one MacAnthony suggests would seem a more workable and sustainable way of operating.
The PFA have effectively forced a reversion to the previous way of operating, but the added impact of Covid-19 will likely create even greater inequality as the clubs most desperate for cash see their players harvested by wealthier rivals.
Whilst the overturn of the salary caps will benefit its members over the next few months, it could well find itself dealing with players going unpaid and eventually unemployed if they remain opposed to clubs finding more effective ways to protect themselves.