Championship salary cap: would it work and how much would it affect Sheffield Wednesday?

Speculation over the possibility of a salary cap being placed on Championship clubs including Sheffield Wednesday has grown as the division attempts to safeguard itself as football prepares to enter life after the coronavirus suspension.
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Figures such as a £6,000-per-week cap on each player seem a little fanciful given the spending at several clubs and Wednesday would certainly be among the sides scrambling to cut costs in the event of a £20m cap on staff payment per season.

Clubs up and down the country have been left considering the likely next steps after the suspension of football has left a matchday revenue-shaped hole that won’t be filled even if this season is to be completed.

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And speaking to The Star, one football finance expert, Kieran Maguire, pointed out a handful of the logistical issues posed by the mooted cap. According to his calculations Sheffield Wednesday have an average player wage of around £19,700 as per their most recent accounts in 2017/18.

“There has been talk of a £6,000 per week salary cap in the Championship,” he said.

“That would have a significant impact on every single club in that division. Even if the lowest clubs are paying £7,000 or £8,000, it would really hit the relegated clubs very severely, even if they had relegation clauses in the contract.

“Most relegation clauses have wage drops [clauses in player contracts] of 20 or 30 per cent. If you take the example of Crystal Palace, who claim to have four players on advance of £100,000 per week, those players might accept a 20 per cent wage cut, are they going to accept a 94 per cent wage cut? Not they're not.

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“The additional challenge is having players on multi-year deals. If the club was to try to force them, I'd be fairly confident that a club could go to a court of law, they'd find the club were in breach of contract, and they'd lose them for nothing.”

Sheffield Wednesday would have to do some serious cost-cutting in the event of a Championship salary cap.Sheffield Wednesday would have to do some serious cost-cutting in the event of a Championship salary cap.
Sheffield Wednesday would have to do some serious cost-cutting in the event of a Championship salary cap.

Maguire believes the figures of £6,000-per-week or £20m total have been floated as a starting point for a debate into a salary cap, with more realistic figures likely to come down the line.

And a switch to an American-style system is more likely, with one or two ‘Marquee Players’ not counted in the salary cap calculation.

“One thing to consider is that if we are going to give a squad wage cap, and there are certainly merits in it to make it more similar to the NFL system, then perhaps we should also consider spreading income more democratically,” Maguire said.

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“If you take a look at the NFL, all the merchandise income, all the TV income, is split evenly between the clubs and as far as matchday is concerned, 60 per cent goes to the home club, 40 per cent goes into a pool, and that's then split evenly between all the clubs in the division.

“That would make football far more competitive if that is the objective. But I don't know if that is the objective of clubs. That's for the owners of the clubs to decide.”