SCMP and the binners

[Essex_Canary 6]

I do love a good read of TWTD, even in our darkest times their delusions have made me laugh.

I read recently a thread about the financial impact of their relegation to League One and it appears as though the farm hands are rather missing the plot...one even suggested that they might even reduce their debt by getting relegated.

https://www.twtd.co.uk/forum/448112/why-relegation-would-be-a-financial-disaster.

What has changed since we were in League One is FFP. Effectively the EFL have put into place some pretty stringent rules to limit what clubs can pay in wages and unlike getting relegated from the Premier League there is no parachute payments.

Whilst FFP in the Championship is fairly flimsy at League One level it is more rigid and strictly enforced and it comes in the form of SCMP - Salary Control Management Protocol - which allows clubs to only spend 60% of their turnover on wages.

For the binners this spells huge issues. Their last set of accounts showed they paid £18.5m in wages against a turnover of just £17.1m.

In League One their revenue will drop by at least £6m because of the difference in TV money alone (it will probably be more due to falling attendances (fewer away fans) and lower commercial deals etc) so that means their turnover will be around £11m.

If that is the case then with SCMP they will be forced to operate with a wage bill of just £6.6m - down nearly £12m from the last set of accounts...and if they don’t then they’ll be under a transfer embargo.

Now player sales count towards turnover so in theory they can sell off their ‘best’ players to increase their turnover...however it’s not like they have a hugely talented squad that has simply under performed, they are where they are because their playing squad isn’t good enough for the championship. Even if one of their players is in demand every club in the league knows the issues that they are facing financially so they are hardly going to get ‘decent’ offers. They literally will have to take whatever they get offered.

As we know getting rid of players on big wages can be an issue, so that juicy new contract they gave to the hapless keeper last summer (20k per week, £1m a year) will be over 15% of their total salary bill all on his own. The best they can hope is they can find someone to take him on a free and match his contract, but it’s hardly like he’s going to be in that much demand, given his wages and the season he’s having.

But, I hear the dim-witted farm hands down the road say, their friendly (asset-stripping ticket tout) owner can simply pump in millions more of his money to boost the turnover figures...except old Marcus has never gifted the club anything, all the money he ‘invests’ each year to keep them afloat is actually in the form of loans...ever heard the one about it not really being debt because he owes it to himself!

Now the EFL have long since cottoned on to that old ploy so loans aren’t included within turnover for SCMP calculations, meaning unless the tout actually donates the money to the club he can’t make up the shortfall himself...and given that he’s not exactly been one to dig into his own pockets (exact opposite, he’s actually robbed them blind) the notion that he will suddenly change seems rather far fetched!

Now SCMP doesn’t actually cover transfer fees paid out, so in theory they could go and blow millions on new players to rebuild their already League One standard squad, however they still have to pay the wages of the players they pay fees of and keep to the salary limit...so again that seems unlikely.

There are some exceptions to SCMP for young players and existing long term contracts, but seeming as though the long term contracts are most likely to be the most onerous, this is scant consolation.

http://www.financialfairplay.co.uk/scmp.php

To sum it all up, this idea that they can go down and bounce straight back up seems fanciful. Yes there are clubs that have done it but those were (relatively in comparison) better run clubs...and the longer they spend in League One the harder it gets as the more their turnover falls.

 

 

 

 

 

 

 

 

 

[GenerationA47 747]

Interesting times, worth pointing out.

There but for the grace of God/Delia/footballing saint of choice...

[KeiranShikari 1,409]

I took a look on there the other day and it seems they've actually taken a fairly sensible approach and decided to talk about anything but football.

[East Rider 548]

There is no doubt relegation for town would be an unmitigated disaster. To be fair to them a few of their support realise this and can see beyond the 'it's not really a debt mantra,' and can also see ME for what he really is. It is far to say those in the enlightened batch are worried for the future. Even accepting they may be in league one for a few seasons before they regroup properly.

However, the fun really is as you say hearing from a few of the terminally dim, that Marcus is their saviour and all will be well when they storm the league next season, due to the size of their club...…... 

 

[splendidrush 699]

I read that they would be an attractive option for top players in League 1 because of their history and tradition, what does that even mean?

[FenwayFrank 2,456]

3 minutes ago, splendidrush said:

I read that they would be an attractive option for top players in League 1 because of their history and tradition, what does that even mean?

It means they will only be buying players over the age of 50

[Darth Canary1 91]

Tbh nothing, they are no different to us when we went down. They will potentially attract some players because of where they've come from. It won't be anything to do with the glorious history though.

[splendidrush 699]

Apparently they're going to lose a dozen players or so who are out of contract and the six they have on loan. Given how poor they've been this season, who is going to want to go there?

[Drazen Muzinic 1,444]

2 hours ago, splendidrush said:

I read that they would be an attractive option for top players in League 1 because of their history and tradition, what does that even mean?

Even footballers aren't that dim and their agents will certainly look for better career and reward opportunities.

 

I liken it to a careers adviser asking a school-leaver "Would you like a career involved in the online streaming business or the local betamax factory?"

[BroadstairsR 2,138]

 

"Tbh nothing, they are no different to us when we went down."

That'snot quite the case though is it? I have always maintained that one of the most important factors in our quick exit from League 1, at least, was the support we maintained.

 

Averaging 24, 500 in that league was exceptional. Such an assured income not only encouraged sponsorship but gave the powers that be the courage to invest in the squad when and if needed, although admittedly moderate and reliant upon Lambert's (as was) acumen in the market and the backing of Culverhouse and his team it was the bedrock that catapulted the club two leagues upwards in phenomenal fashion.

By contrast, ITFC get in excess of 20, 000 rarely and then only on derby days and crucial times when aided by massive reductions in ticket costsand deluded hopes of a revival in fortunes.

 

Their catchment has diminished by the year to our benefit. We might have been a yo-yo club for the last two decades or so, but they have not even managed that in a freak tenure of some eighteen years in the Chumps.

They had some gates last season of little more than ten thousand Ipswich fans last season if you take into account away fans and season ticket holders counted but not bothering.

Their last home (Saturday) gate, despite Lambert's supposed impetus and a believed up turn in performances recently (including one of the few times in footballing history when the "better" side lost 3-0 ... at Carrow Road,) achieved less than 16, 000 in total.

They might consider themselves the "pride of Anglia" because of a few distant achievements but the fact remains that by comparison with NCFC they are a small town club, with a limited catchment and able to attract little more than 10, 000 season ticket holder, which is less than half of our own sales.

 

This dilemna will get worse with relegation. The binners are kidding themselves if they feel that L1!. existence will not be a disaster for their club.

 

As far as us City fans are concerned it is somewhat disappointing that the 'rivalry' will become less and relevant as they will be so far in the depths that we might as well choose Col. U. or Cambridge as equivalents.

 

 

 

 

 

Edited February 23, 2019 by BroadstairsR