March 12 2014 Latest news:
By Trevor Davies, Leyton Orient correspondent
Tuesday, May 22, 2012
O’s boss Slade forced to work with a smaller budget
Orient chief executive Matt Porter believes League One sides face a season of transition as they introduce the new wage-capping system.
Clubs can now spend just 65 per cent of their projected turnover on players’ wages – and the new system is unlikely to help Orient manager Russell Slade in the short term.
Under the new regulations Orient, who have an annual turnover of around £2.75 million, will have to slash their wage bill.
On that sort of projected turnover the O’s could spend no more than around £1.7 million – but last season their wage bill topped more than £2m.
So it seems Slade will need to cut around £400,000 from the playing budget to comply with the new regulations.
“The figures are worked out on next year’s projected turnover,” explained Porter. “But they have to be based on last year’s figures, so you would need to justify any big discrepancies.”
However, that will not help Orient, as next season’s turnover is likely to tumble.
“Looking at the clubs we will play, it’s fair to assume that our gate revenue will be significantly down,” said Porter
“With Charlton and Sheffield Wednesday going up and the possibility of Sheffield United joining them, we will be losing three big gates.
“Brentford will be our only London derby next season, we have lost so many big games.”
Relegated duo Portsmouth and Coventry could bring decent crowds to the Matchroom if they are doing well – but Doncaster is not going to be a big draw.
Porter would have liked to have seen Southend win their place back in League One, as it is, Swindon are the only promoted side with a big following.
With Crawley, Shrewsbury and either Cheltenham or Crewe joining the Robins, Porter admitted: “We are likely to face a huge loss on gate receipts.
“We are certainly not expecting to move season tickets holders in the East Stand on as many occasions as we have done in the past, that’s for sure.”
Most clubs in League One will find themselves in the same boat and Porter admits it will be very much a learning curve.
“It’s too early to say what impact it will have on us, because everyone is finding their feet and different clubs have different views,” he said.
“But there are only two alternatives. One is to keep the same number of players, but pay them less. Or you can go with fewer players.
“In the long term there will be stability in players’ wages, but it will give a massive advantage to the bigger clubs.”
There were League One sides with wage bills in excess of £5m last season and Porter added: “If clubs with a big turnover can justify a wage bill three or four times more than most of the other clubs, it will give them a tremendous advantage.
“But there will be plenty of teams in the division with similar gates and similar turnovers to ourselves, so many of the clubs will be competing on a level playing field.”
Orient are also looking to grow their turnover – as that would give them more money to spend on wages.
And the new system also encourages teams to try and bring players through the ranks.
Any home grown players under 20 are excluded from the wage cap – although realistically that represents only a tiny percentage of the wage bill.
There are potential problems and Porter admitted that the club would initially look to spend around 60 per cent of their turnover on wages,
“You need some sort of buffer, in case one of the key players gets injured,” he said.
“If you have spent 65 per cent and a star player is injured on the first day, then you are going to be in trouble.”