With Morecambe under a transfer embargo, club secretary Neil Marsdin has explained to supporters how it happened. While most of the details are generally known, one point of interest is that players aged under 20 are not part of the calculations:
"During the month of July, the Football League sends out documents that clubs are required to complete. This document requests that you list all your expected income, from all sources, and all your expected expenditure. The income side of it is to some extent to estimate projected revenue, which can change and do change during the following months. Gate income, revenue and prize money from cup games are taken into account. also the previous year's actual figures are on the form for comparison, so the FL can always see that the figures given are reasonable.
"The expenditure is listed likewise with the previous year's expenditure listed as a comparitor. Wage figures for players are listed on a seperate sheet and these are to include all bonus payments and also N.I. costs, although players under 20 do not count towards the final figure. Also all incoming loan players costs are added, as all outgoing players are deducted. The final part of this is that the playing budget should be no more than 55% of total allowable turnover.
"So for easy figures, if your total turnover is £1million, your playing budget should be no more than £550,000 if you reach that 55% you then have a leeway of 5% to use, if you can guarantee that the signing you are making does not lift you over the 60%.
"In December you receive another document from the FL, the same as July, and you have to update the estimates for July and revise the second half of the year. Due to various factors our income was not at the level we had hoped for, and our expenditure had also risen from what we projected. Therefore when calculated against our wages, both actual and contracted, we had exceeded the 60% of turnover. Therefore until we return to less than 60% the embargo will remain. It should be noted that if we reduce players wages (by players leaving) you benefit from the full 100% of the monetary reduction. However, if it is cash income, you would only benefit by 60p in the pound. I hope that I have explained the position as to the mechanics of the salary cap system.''