| Welsh FA to consider salary cap |
| Wednesday 27 January 2010 |
 A SALARY cap will be introduced in the Welsh Premier once the "Super 12" is up and running, according to the FAW's head of competitions. Writing in Welsh Premier Times this week, Andrew Howard says that the league should follow the model of the League of Ireland, which introduced financial monitoring and regulation after merging with the Irish FA in 2003. A financial expert was recruited in the Emerald Isle to help clubs manage their finances more effectively and monitor cash-flow on a monthly basis. Economic weakness was soon revealed at the majority of clubs, with player salaries at some in excess of 100% of turnover and, in one case, as high as 160% of total revenue. In 2007, the total income of the member clubs in the top division was €13.1m, yet the expenditure was €19.7m. Player salaries amounted to €10m, with total salaries €12.5m - just €600,000 less than the total income of the League clubs. Since the introduction of a cap, which limited salaries to 70% of total costs, wage bills have reduced dramatically although Derry City, who tried to cheat the system, have paid the price by going bust and suffering relegation. "Some positive outcomes of this FAI exercise are that the governing body is showing leadership, there’s stability and strength between the league and its clubs, reduced hyper-inflation in the salary market, reduced use of loans to cover operating costs, an increase in availability of funds for core investment and the governing gody is targeting a breakeven figure for the whole League by 2012," says Howard. "The benchmarking that UEFA carries out throughout its 53 national associations shows an average salary cost/revenue ratio of 65% in the 53 top-division leagues. "Interestingly, the Welsh Premier averaged 65% in 2008/9, probably by luck rather than judgement but, worryingly, there was an example of a club over 100% in Wales, which is just not sustainable. "What the FAI has done to advise and regulate the finances of its top-division clubs is a masterstroke of governance and although we’re not in the same boat now as the Irish were when they acted, I will be looking to introduce a similar style of regulation after the League’s re-structure. "It can only be for the good of the game, the integrity of the league and to help safeguard the future of our member clubs," adds Howard. |