The Head Of Deloitte’s Sports Business Group Dan Jones has encouraged the Championship to adopt a salary cap in order to avoid the losses that were sustained during the 2018/19 campaign.
Player wages amounted to 107% of club revenue, according to Deloitte’s Annual Review of Football Finance, which has left a £350m financial black hole in the budgets of teams in the second tier of English football.
Jones says that introducing a cap which will limit wages to 70% of club revenue would mitigate the losses by up to 85%:
“A salary cap is a very blunt instrument, but if you were to say you can only spend 70% of revenue on salary, and apply that in 18/19 (2018/19), you take £300m out of the wage bill and you pretty much wipe out the losses to the Championship at a stroke by that single measure”
“I just think if Formula One can do it, if Premiership Rugby can do it, I don’t see why the Championship can’t do it. The need is more urgent and more long-standing in the Championship than it is even in those other sports.”
Whether Middlesbrough and other Championship clubs will heed the advice, it remains to be seen. The EFL are said to be in preliminary talks about the salary cap, although it is thought that even if restrictions on wage budgets were approved by the league, it would only come into effect next year. Considering the financial impact of the global health crisis, many will be keen to introduce the cap sooner in order to reduce costs.