The next clash looming for League One clubs and why the consequences for Sunderland could be major

The fierce debate over the future of the League One campaign has underlined a major divide in the outlook of clubs throughout the division.

Tuesday, 26th May 2020, 12:33 pm
Updated Tuesday, 26th May 2020, 1:05 pm

There are two largely opposed views and both are valid.

For many clubs in the bottom half, the financial cost of the testing programme required to resume, as well as the implications of playing without fans, are too onerous to consider.

For those towards the top, a curtailment means a far more significant rebate in terms of season cards. It also means a reduced chance, or no chance at all, of going on to land the financial benefits of playing the Championship next season.

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Sunderland could face a significant challenge if a uniform salary cap is introduced

The vote on a resumption is set to take place next week and for now, the result hangs in the balance.

The fate of the season looks to rest in the hands of three or four clubs who are yet to commit and say they ‘will go with the majority’.

How that manifests itself in the voting process will make all the difference.

This divide is also likely to play out again in a battle that will have major consequences for the future of the game, and particularly for clubs such as Sunderland for as long as they remain in the third tier.

Salary caps increasingly look to be an inevitability in the bottom two divisions of the league pyramid.

EFL chairman Rick Parry came out strongly in favour of them in his appearance before the DCMS committee last month, while Salford City co-owner Gary Neville (whose club opposes them) said last week that the appetite for them amongst clubs is strong.

Sunderland, for their part, have made their stance clear.

It has been reported that playing budgets in League One will be capped at around £2.5 million, including agent fees.

It’s worth remembering with that in mind that when Jack Ross took charge last summer, he was inheriting a wage bill well in excess of £30 million.

Over the course of their first season back in League One, Sunderland’s spend on agent fees alone was just short of £3 million.

While both of these figures are of course skewed by the legacy of the Premier League era, and the club’s commitments in both departments are now significantly reduced, the touted cap would still mean a stark readjustment.

In fact, Rodwell says that without a transition period, it would be ‘impossible’.

The broader debate about whether it is right to oppose a uniform cap is one that will gather pace when any decision (understood still to be some way off) moves closer.

The benefits for many clubs is obvious.

It makes the playing field level, and reduces the obligation on smaller clubs to overstretch to compete.

For the clubs with larger fanbases, though, it would put them at a major disadvantage.

A uniform cap will prevent them from utilising the power of their supporters, meaning that money isn’t invested into the club when owners at smaller clubs can potentially use their own financial power to push their budget up to the cap.

It’s a curious debate, when the current EFL rules actually serve to ensure all clubs should be sustainable. The issue is simply that they aren’t enforced, and aren’t applied to the division where they are most needed.

League One and League Two clubs currently operate under the SCMP rules, which mean they can only spend 60% of their turnover on wages.

The issue is that owners can easily get around this by injecting funds either as donations or equity. As such, Parry believes the average third-tier club is spending around 80% of their income on wages.

Removing the loophole would mean all clubs are living within their means, but also that those who are bringing in money sustainably from their supporters are not punished.

Doing it this way is not necessarily all in favour of the bigger clubs, either.

A club’s turnover also includes sales and so those who recruit smartly and bring through talent from their academy are rewarded when they bring in a profit from selling those players on.

Those who also serve the game’s wider development by offering regular opportunities to young loanees would also excel.

Wages of academy players could be excluded from the cap (and the players themselves excluded from any squad-size cap) to further incentivise good practice.

Any change to the regulations must also ensure there is uniformity across the divisions.

The Championship currently operates under a different set of rules, whereby total losses are limited over a three-year period.

The enforcement (or otherwise) of these rules has proven hugely controversial and they have on the whole been largely ineffectual.

In a stark reflection of their failure, Parry told the DCMS committee that he believes second-tier clubs are spending in excess of 100% of their turnover on wages.

If spending is limited in League One but not in the Championship, then the already widening gap between the two divisions is only going to grow.

If a uniform gap is imposed on League One and not the second tier, then the transition between the two divisions is going to become virtually impossible to manage.

Cost controls, properly enforced, are long overdue and they are also an absolute necessity as the game makes the readjustments it needs in light of the COVID-19 crisis.

Budget cuts across the board are inevitable and offer all clubs the chance to reassess some of the worst excesses of recent years.

In the divided third tier, though, it will be another contentious issue.

The EFL have some crucial decisions to make and in truth, their current rules are a good place to start.

The key is in strengthening them, not tearing them up altogether.

A uniform cap would have major implications not just for Sunderland, but also for the wider game.