League One and League Two Salary cap: What it means for Ipswich Town

A salary cap has been voted in by League One and League Two clubs to take immediate effect.

Ipswich Town's club website took a look at what this means for Blues and asks Town owner, Marcus Evans, for his reaction to the new guidelines.

First of all, why has the salary cap been brought in?

Basically to help the sustainability of clubs playing in the EFL.

Salary caps were under discussion before the outbreak of Covid-19 that saw an early end to the seasons in League One and League Two but the discussions were stepped up over recent months given the financial pressure clubs are now under.

A vote was taken yesterday amongst the clubs in Leagues One and Two and the majority was reached in each division that sees a salary cap introduced with immediate effect.

What way did Town vote?

The Club voted against the salary cap. Town wanted to see some adjustments to the way it is calculated.

What is the Club’s reaction to the decision?

Town owner Marcus Evans told the Club website: “I have said before that I think football needs to press the re-set button in terms of some of the financial aspects of the game but we were against the introduction of the salary cap in this format at this stage. It restricts our reinvestment considerably.

"However a decision has been made by the majority of clubs. We accept it and will deal with it going forward.

"All clubs are in the same boat so wages are going to be facing a downward pressure. It will take a little time for agents and players to realise that clubs just can’t pay more and start to accept the reality of these new levels."

What is the cap on salaries?

A £2.5m annual ceiling in League One on expenditure on the first-team playing squad and £1.5m in League Two?

What constitutes ‘expenditure on playing squad’?

The total wages of the named squad for the season including loan players; plus bonuses, agent fees etc - basically all fees and expenses paid directly or indirectly to players in the named first-team squad.

Players under 21 at the turn of the year (2020) are exempt from the salary calculations so the likes of Andre Dozzell, Idris El Mizouni and Flynn Downes will not count towards the £2.5m figure this season but Luke Woolfenden will.

Do transfer fees count?

No but the wages for players brought into the club from now on must be within the overall total cap.

Explain what ‘named squad’ means, isn’t it just the whole first-team squad?

No. Each squad must consist of no more than 22 players aged 21 or over for 2020/21 and that comes down to 20 players for 21/22 onwards. The named squad must be delivered to the EFL at the end of the transfer window.

How many players fall into that category for Town at the moment?

Town have 19 players at the club who are 21 or over who played in the first-team last season, with Aaron Drinan and Harry Wright to add.

Is there any limit on players under 21 in the squad?

No.

How does it work with players who are on contracts with agreed salaries already?

Any player under contract before the salary cap decision was made will be allowed to count towards the squad salary cap at the League One average of (125,000 per annum) but at £113,000 for this year, being a transition year, but only for the period until the end of their current contract so any contract renewal has to take account of the salary cap calculations.

How will the salary cap be monitored?

The EFL will monitor the cap on a real-time basis throughout the season to prevent clubs signing players that would result in them exceeding the cap. There is a financial punishment procedure - an overrun tax they call it - in place if clubs breach the £2.5m threshold.