Salary cap could curb Town wages

IPSWICH Town may have to cut back on the wages they pay players if a proposed salary cap is introduced, which in turn could damage their future promotion hopes.

Derek Davis

IPSWICH Town may have to cut back on the wages they pay players if a proposed salary cap is introduced, which in turn could damage their future promotion hopes.

Although a salary-cap was introduced to Leagues One and Two for the 2004/05 season but while League Two carried it on, League One opted out.

The Championship resisted the move but it is always been on the back burner and with the recession starting to impact even more many club chairman, and the Football League chairman Lord Mawhinney, feel it is time to adopt some sort of wage restraint policy.

Clubs will discuss the issue at a Football League meeting at Pride Park on December 18 and a spokesman confirmed: "Given the prevailing economic climate, this is an issue that will be discussed with clubs once again.'

Ipswich chief executive Derek Bowden last night declined to discuss the issue.

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The system in use limits clubs to spending 60 per cent of their turnover on wages, but that could drop to 50 per cent if a lower tariff is agreed.

Using last year's report and accounts that would mean Ipswich would have been allowed to spend just £9.18m of their £15.3m turnover on wages. Their total wage bill actually came to £10.503m so that would have meant an overspend of more than £1m

Figures for 2008 have not yet been released and as Marcus Evans is the 87.5 per cent owner it is unlikely the reports and accounts will be made public.

But it is widely acknowledged that while earnings for admin staff have been frozen, the average wage bill for players has increased dramatically.

Town lost its sponsorship from e.on, with Marcus Evans stepping in to fill the void and put his name on shirts, and corporate hospitality like many other league clubs is understood to have been hit.

If the Town wage bill were to be higher than the 60 per cent then under the proposals being discussed the manager's budget would be severely affected.

With many of the squad already tied up on long term contracts cuts would have to come by not renewing those out of contract.

Jim Magilton would also be restricted in the new terms he offered either to those players he wanted to keep and for any new additions he wanted to sign.

While Derek Bowden and Ipswich Town remained tight-lipped over the issue of a salary cup other club bosses were more open,.

Southampton chairman Rupert Lowe is not in favour of a cap, but believes wages should be kept below 60% of a club's turnover.

He said: “The British economy is in dire trouble and is going to seriously affect football.

“Players wages are at unsustainable levels in a recession and our ticket sales, corporate hospitality and sponsorship is down.”

Adam Pearson, chairman of football at Derby who were relegated from the Premier League with a parachute payment, believes football is inadequately prepared for the current financial climate.

He said: “The game is close to meltdown at all levels.

"Club boards are under pressure to gain success and that leads them to paying ridiculous wages.

"It cannot carry on or it will end in disaster. There is a growing feeling now that some sort of wage cap has to come in.

While Coventry chairman Ray Ranson added: "A salary cap should not limit individual players' wages, but restraining wages to a proportion of turnover would be a good thing and, in today's climate, people should think seriously about it.”

Among those against the idea is Preston chairman Derek Shaw.

He said: "A salary cap would be very difficult to control because there are lots of ways round it so that players can still increase their earning power.

"At Preston our wage bill has increased by £1million per year for the past four or five years.

"If you don't pay the wages, you will get relegated from the Championship and it's very difficult to get back up - just ask Leeds and Nottingham Forest.'

Shaw conceded that Preston, one of the more prudent clubs in the Championship, have been affected by the economic downturn.

He added: "Our gates are down on average by about 1,000 on last year.

"But if we reduce ticket prices then we can't afford to pay the players' wages.'

Bristol City chief executive Colin Sexstone has claimed a salary cap would widen the gulf between the Championship and the Premier League.

Although Sexstone is in favour of bringing players' wages down, he believes this can best be achieved by allowing market forces to take effect.

He said: “We are against any kind of outside regulation. Any regulation would create a bureaucracy that would become too big to control.

“We saw something similar in League One a few years ago where there simply weren't enough policemen to enforce it.

"I think all clubs are agreed on the need for wages to come down, but the market should dictate any such cut rather than accountants working for the Football Association or Football League.

"I can't see the Premier League even entertaining the idea. If we had a wage cap in the Championship, the gap would become too big to bridge.

"You would be left with a situation where the teams coming down from the Premier League would almost certainly be promoted straight back the following season.'