SCMP (League 1 & 2)

May 4, 2017 | News, Web Watch

Salary Cap Management Protocol

SCMP is a key financial limitation on the actions of football clubs at the level Bristol Rovers currently operate.

It is the name given to the Financial Fair Play Rules applicable to the football clubs in Leagues One and Two.

A summary of the spending constraint framework is provided blow for ease of understanding.

To view the complete  Appendix 5 of the EFL Rules And Regulations – Financial Fair Play Rules: Click HERE

(Please Note: The information that follows was published before Appendix 5 above by the EFL was made available.)

League 1 and 2 clubs operate a Spending Constraint framework termed Salary Cost Management Protocol.

SCMP limits spending on player wages to a percentage of club turnover.

In League 1 clubs can spend a maximum of 60% of their turnover on wages; in League 2, the limit is 55%.

Sanctions for breaching the SCMP thresholds started in the 2011/12 season.

The process is interactive with clubs providing the EFL with regular projections for spending.

During the season the clubs provide monthly updates on their Turnover and wage bill.

Any club that is forecasting a wage spend within 5% of the figure will be scrutinised closely.

Where a club is on course to exceed the limits, the EFL will apply a Transfer Ban.

A club doesn’t have to overspend to incur the ban; it only needs to seen to be heading for an overspend.

SCMP is effective at stopping overspend before the spending actually occurs.

Relegated clubs 

The rules apply to all clubs and there is no moratorium for clubs relegated from the Championship.

Clubs newly relegated from the Championship can spend 75% of turnover on wages.

Turnover definition 

Under the SCMP rules, turnover is used to determine the maximum wage-spend.

Within a traditional accounting perspective, there are usually only three elements of turnover:

Match-day Income.

Commercial Income, (such as sponsorship).

TV revenue, (and any ‘merit payments’ based on league position).

However, the English Football League uses a broader definition of turnover.

The EFL Turnover figure includes donations from the owners to the club and injections of equity.

Loans from club owners are understandably not included in the Turnover figure.  

In League 1 and 2, wealthy owners can fund the club in a way that is not permitted in other divisions.

Owners can donate cash to the club and include that donation within the turnover total.

Profit on player sales

Any profit made on player sales is included within turnover on a cash basis when the instalments are received.

Player Wages and deductions 

Under SCMP rules, ‘Wages’ relates to player wages only.

(director remuneration and general club staff wages are not included in the SCMP calculation).

Player wages included in the SCMP calculation relate to all players; full contract, non-contract and loan players.

Wage costs for players loaned out to other clubs are deducted for the period of the loan.

Wage costs for Youth players on a professional contract are also excluded.

(i.e. players that have been in the club’s Youth Development scheme and have been given a pro contract).

They must be 20 years of age or under at the start of the season.

Direct Costs incurred within Turnover 

Within Turnover, clubs can include items as Hospitality income; whether match day or non-match day income.

The direct costs have to be deducted to reach a figure that is submitted on the SCMP return.

This would include food & beverage, direct staff and cleaning costs such as laundry etc.