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INTERVIEW: We all agree that sustainability is the way forward

John Nixon on this week's Squad Salary Cap developments

12 February 2021

An EFL statement released earlier this week confirmed that an independent arbitration panel had upheld a claim from the Professional Footballers’ Association (PFA) that the EFL was in breach of the constitution of the Professional Football Negotiating and Consultative Committee (PFNCC) by introducing ‘Squad Salary Caps’ following a vote held in August 2020.

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Clubs in Leagues one and Two voted to adopt new financial controls following an extensive and comprehensive consultation process, replacing with immediate effect the previous Salary Cost Management Protocols (SCMP).

The panel’s decision to uphold the PFA claim has brought a return to the SCMP model, with many member clubs now concerned that the drive towards a more level playing field has been derailed, and that the big spenders will once again come to the fore as others, who try to keep pace, will fall by the wayside with their clubs put at risk.

We caught up with League Two board representative John Nixon to get his take on what has been another week of turmoil.

“I was called as an EFL board member to a meeting on Monday morning to look at and be walked through the PFA/EFL arbitration decision,” he explained. “It’s disappointing, but not altogether surprising.

“Unfortunately we have to acknowledge that the issues we were trying to address by implementing the Squad Salary Cap still haven’t gone away, and we will now be involved in two meetings today [Thursday - one for League One and one for League Two], and this will no doubt be a topic that will be discussed at length.

“The key thing here, as I’ve already stated, is that the issues which drove us towards this current disagreement simply have not gone away. The EFL’s clubs, and League Two was probably as much a leader on this as League One, felt there was a real and immediate need for change.

“We’d gone through the shock of Bury, and then Macclesfield, and we talked over a long period about the fact that we can’t allow it to happen again in the future. There must be rules and regulations in place that give clubs more sustainability and protection against boom and bust.

“That was the driving force behind the new Squad Salary Cap system, as it has been called, and the 24 clubs in League Two all agreed that sustainability was the way forward.

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“There are big clubs at our level, and there are what you would class as smaller clubs, but the common factor is that they are all embedded within their own communities. The impact of losing a club, as we saw in Bury, is huge. It affects so many people away from the actual footprint of the club itself.

“That means that in Leagues One and Two we have 48 communities who all have a football club right at the heart of many of the things they do. Everyone wants to protect that and, after discussion, we all agreed that the way forward was that we should only spend a certain amount of available funds on our playing squad.

“In no way did that mean individual players were going to get a pay cut. It meant we were all going to set a limit on what we would spend on the playing squad because that is one of the biggest parts of our outgoings on a weekly and monthly basis.”

“Another element to this was that we were going to try to limit the numbers in the squad, again to address our outgoings,” he added. “To help us to facilitate that we decided that clubs could sign as many players as they liked up to the age of 21 to encourage the development of scholars and young players through academy systems.

“The limit on numbers would apply to players over the age of 21, and obviously that would then help with the cost burden at the same time as shifting some focus to the development of those younger players.

“Together, this gave us our first two building blocks, but in terms of overall sustainability we were under no illusion that there was still a lot more work to be done.

“In some cases, of course, there are owners who want to be able to put in a little bit more, possibly over and above the allowed amount, because they want to drive their club forward.

“I think there’s an acceptance that we have to find a way for clubs to do that at the same time as making sure it doesn’t put the club in jeopardy should that income stream suddenly disappear, for whatever reason.”

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Looking from the outside in, and with it appearing to all intents and purposes that an agreed method of bringing a much fairer platform for the lower leagues to play on has just been removed, there also seems to be echoes of the Jimmy Hill intervention which led to huge wage increases and, indeed, the problems clubs now face today of having to stretch financially in order to achieve the success they all crave.

“I’ve been chair of the EFL Trust for 10 years now, and for eight years of that Gordon Taylor was a trustee on my board,” he told us. “I know him well, I’ve spoken with him about a number of things, and I can tell you that he has two or three principles which he sticks to.

“He’s very supportive of the lower leagues, he has a real interest in the smaller clubs, and he is very supportive of the players who work at their profession within these smaller clubs. I don’t think his interest in these things will ever change.

“Another area he has a keen interest in is establishing a system that helps young players to come through the ranks and go on to have very successful careers. For many years he has promoted youth football and apprenticeships with that in mind.

“So, yes, the PFA have raised this argument against the Squad Salary Cap, but I don’t think the principles that the EFL have tried to employ and implement are that far away from what Gordon would like to see happening for his PFA members.

“That’s why I think we’ll find a way forward because, in my opinion, we aren’t that far apart in the first place. Possibly one of the issues is that the very emotive words ‘Salary Cap’ have been used, and that kind of terminology tends to point towards individuals having caps on their potential earnings.

“That’s now what it’s about at all. It’s more about clubs only spending a limited amount of their budget on the playing squad. The SCMP system has been in operation for a number of years now, and to change from something being called a Protocol to a Cap has made it seem a hard issue and, to be honest, it’s thrown us all off course.

“I firmly believe there’s a way through this. I see Gordon’s thoughts on sustainability and the need for vibrant lower league football as being aligned to ours, and that makes it easier for us to find a way forward.”

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The backdrop to all of this, of course, is the ongoing pandemic situation which has brought challenges for clubs who were either heading towards or already in a situation where they are living from hand to mouth.

“Discussions on financial stability have been taking place for years, and even more focus came with what Bury went through, so none of this is anything new,” he said. “However, there is absolutely no doubt that Covid has exacerbated things and acted as a catalyst for the need to move these issues on and find resolutions.

“For a prolonged spell now we’ve had zero income from crowds, and lower commercial income, and that means we have less to spend on wages. That’s a natural force of supply and demand, with an obvious consequence that wages would have to go down. You can’t spend what you haven’t got.

“But we need to be clear that players are still in a position to ask for what they think they are worth, or what they want. That hasn’t changed. The difference now is that there isn’t as much money there to satisfy their requests.

“I think the PFA looked at the current situation and reiterated that they feel you should still be able to negotiate, and that’s true. But less income means less available cash and the subsequent reduction in what you can offer.

“That’s just market force. Gordon understands that, the players understand that and the PFA understands that. Clubs will continue to struggle until we get back to what we all call a more normal situation, so there is absolutely no need for us to get into an acrimonious rock throwing session.

“We all just need to talk, work on the common ground, because fundamentally we all want the same outcomes for the good of the game and our communities.

“I’m hoping we’ll find a resolution quickly, probably through the negotiating capability of the PFNCC, and I do believe that we will find a way forward that everybody will be comfortable with.

“It’s about consultation, and part of the initial disagreement was that there had been a failure to consult, particularly around questions of whether or not the constitution had been breached.

“Clearly, if there had been more consultation, it probably wouldn’t have come to this, but that’s hindsight. That’s something that can be dealt with quickly, and it will be.”

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Reaction on social media from some owners and directors to the announcement that the PFA appeal had been upheld was emotion-filled, with some clubs bemoaning the fact that a step towards that seemingly more level playing field had just been whipped away.

“League Two meetings are never the easiest to chair because you have such a wide range of needs and concerns, and they are all extremely valid,” he revealed. “This isn’t an easy subject now, because things are unclear again, but the starting point we have is that we all want sustainability for every club that is or becomes a member.

“There isn’t one club in League Two that wants to see another Bury. That’s why we’re in a good place as we head into these meetings. Sustainability is better for clubs, players, fans and communities, because football is such a beating heart, wherever you go in the country.”

But if we get to June/July and there’s still no sign of agreement, where does that leave things for the 2021/22 campaign?

“If we’re no further forward, and still within the SCMP rules and guidelines, it will cause issues,” he admitted. “Remember that SCMP is based on income and turnover and football clubs, quite simply put, have very little in the way of turnover at the moment.

“How would the level of spending be calculated in that case – we’d have to talk about it and try again to find a way. As it stands the SCMP calculation, with gate money a big part of that, would mean that we’d have less to spend than under the proposed Salary Cap Rules model.

“These are all problems, but by talking them through I’m confident that the collective will find a way that works for football.”


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