Marcus Evans’ salary cap plans scuppered as the Premier League once again flexes its muscles

Ipswich Town

Ipswich Town - Credit: Archant

IPSWICH Town owner Marcus Evans saw his proposal of a salary cap on clubs relegated from the Premier League scuppered at a Football League meeting in Walsall yesterday.

Parachute payments to clubs dropping out of the Premier League are set to rise to a total of £59 million – up from the previous figure of £48m – split over four years: £23m in the season after relegation, £18m in the second and £9m in each of the following two years.

Evans’s proposal was that this season’s relegated clubs should have their spending on wages capped at £16m in their first year out of the top flight, £10m in 2014/15 and £8m the following season.

Crystal Palace’s alternative proposal was that relegated clubs wouldn’t receive their share of TV income from the Football League – estimated at around £2m.

However, plans to vote on the proposals – designed to create a more level playing field in the Championship and stop the same teams yo-yoing between the top two tiers – were scrapped after Premier League chief executive Richard Scudamore sent an e-mail to the Football League, an hour and a half prior to the meeting’s scheduled start at 11am, threatening to withdraw solidarity payments if either plan was implemented.

Currently, the solidarity payments are worth an annual £2.3m to Championship clubs, £360,000 to those in League One and £240,000 for League Two sides.

Parachute payments are included among the income which clubs can declare under the new Financial Fair Play rules which have been agreed by the Football League. Clubs are being encouraged to start working towards a break even model over the coming seasons, with a fine system in place for those who spend massively beyond their means. Investment levels from owners will be limited, with clubs’ spending on wages and transfers restricted within what they bring in from gate receipts, commercial revenues, television revenue and parachute/solidarity payments.

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Championship clubs making losses of more than £6m will be fined millions of pounds or put under a transfer embargo from the 2014-15 season, while Evans will be restricted to investing just £5m next campaign.

The fear, therefore, is that the size of parachute payments will therefore provide a sizeable advantage to those who have recently dropped down from the top-flight, with Town manager Mick McCarthy criticising the financial rule changes recently.

This latest incident of the Premier League flexing their muscles is similar to the one which saw the new Elite Player Performance Plan come into practice. Former Town chief executive Simon Clegg was one of 22 Football League chairmen – eight from the Championship – to vote against the new academy system back in October 2011.

If Football League clubs had opted against those proposals, seemingly designed to help the cash-rich Premier League clubs sweep up all the best young talent, the annual funding they receive from the Premier League for youth development – over £5m-per-season – would have been withheld.

Speaking at the time, Clegg said: “We were effectively being held to ransom.”

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