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Time for Championship Clubs to be radical?
Given the decision of L1 and L2 clubs on wage caps, should the Championship clubs do something radical too?

The salary caps rules agreed by L1 and L2 clubs on 7th August mean that there will be a massive financial gap in the future between the Championship and L1. A maximum £2.5m wages budget limit would be dwarfed by the SWFC wages budget were we to drop into L1. This might look like drastic action by L1 clubs but it is fully understandable in the circumstances.

The fundamental problem is the unequal distribution of TV monies around the football system which doesn’t look like changing any time soon, unless the PL clubs are forced. The PL hoovers up the overwhelming majority of the resources with some crumbs of so-called solidarity payments being made to EFL clubs, however the majority of that goes to former PL clubs in the form of parachute payments (PP’s) - £40m+ to a newly relegated PL club against £6m for other Championship clubs. Independent academic study has established that PP’s have a significant effect in determining outcomes on the pitch in favour of those in receipt of them. In addition to PP’s relegated PL clubs are also allowed higher allowable losses under FFP than other Championship clubs. Add to that the fears and uncertainties brought about by the Covid-19 pandemic, and games behind closed doors, and it is no surprise the L1 clubs have taken this action.

The EFL announcement confirmed that discussions are still taking place with clubs in the Championship on future financial rules for the Championship. Being a fly in that Zoom call would be very interesting! The Championship clubs now sit in a league that is top and tailed by massive financial disparities. What do Championship clubs do now?

  • A breakaway from the EFL and joining a PL2 could be an option. But would the 20 PL clubs want to share their resources more evenly across an additional 24 clubs? If not the majority of clubs would be walking into a zombie league where it is very difficult to compete on financial terms. Changing the FFP rules to allow owners that wish to massively invest to try to compete might help with that, but would the clubs without that type of owner support that arrangement? And how would the rules ensure that owners who want to throw money at it do so in a sustainable way? 
  • Carry on with the status quo and its attendant difficulties? See above for more on that.
  • Try to break the stranglehold the PL has over them? If the Championship clubs were to remain part of the EFL but refuse to accept relegated PL clubs and ditch higher allowable losses for those clubs, that would transform Championship competitiveness. The current FFP rules could remain to maintain sustainability but clubs should not need to live at the margins of them trying to compete with financial disadvantage. Or clubs move to a salary cap system related to turnover. But we cannot retain the current FFP rules, or move to a salary cap, whilst ex PL clubs are allowed PP’s and higher allowable FFP losses.
  • The PL clubs might respond to the above by refusing promotion into the PL, sealing the PL off and withdrawing solidarity payments.  That might be painful at the start for Championship clubs but it is survivable. And what would the PL be then but a cross between a zombie league and groundhog-day where the majority of clubs have nothing to play for as the Big 6 will totally dominate, and they play the same teams every year. Or, the PL might negotiate a better solution on fairer distribution of resources to avoid becoming a zombie league. Even if they didn’t a 3 division EFL run on a sustainable basis would be preferable in my view than remaining in an uncompetitive and unsustainable Championship.
  • Relegation from the Championship might still be painful but reduced wages in the Championship, better sharing of resources and far more contingent player contracts might help with that.

I am of the view that the Championship clubs have more power than they think they have, if they are able to find common cause amongst at least 16 of them, to achieve an approach on which they can agree and vote that through. The times and the circumstances call for radical action and bravery, limping along under the current circumstances is not in the best interests of clubs and the Championship as a whole. L1 and L2 clubs have made a brave move to try to ensure future sustainability. Dare the Championship clubs be radical and brave too?

 

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26.09.2020
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