The effects of wage-capping
The news that the Nationwide Conference is to introduce wage-capping will probably have an effect on the budget of Hereford United, should it be ratified.
The Non-League Paper have reported the story, but it appears that no percentage of income or set rate has yet been decided.
The Football League are testing out a similar system, and a report from their website on 25th April 2003 read: A further move towards good governance was made with unanimous backing from Division Three clubs for a trial of a salary cost management protocol to come into force next season. Under the scheme, clubs will commit to spending no more than 75% of their total income on employee salaries wages, including no more than 60% on their players.
During the trial period there will be no sanctions for clubs that exceed the limits and clubs from other divisions may participate if they wish.
Football League chairman Sir Brian Mawhinny commented on the move: "The second, very significant decision which has been made today is that we've all committed to an experimental protocol, in the first instance for Third Division clubs, which will relate wages to club income, not just for players but also for all employees. There will be a 60% limit for players and a 75% limit for all other staff. I have discussed this with Gordon Taylor and he is broadly supportive of what we've been trying to achieve. Clubs in the First and Second Division will be able to take part in that if they wish to. Otherwise we will set indicative personal club standards for the year for each of them."
In terms of Hereford United, the most recent accounts available are from 2000/01 season. In that year, the total income was £551,948, with staff costs amounting to £506,675. Of that, the players earned around £413,000. This equates to just under 75% which may be considered too high should similar proposals be introduced into the Conference.
The income at United can vary depending on broadcasting fees and extra gate income from a successful FA Cup run. Whether the league will use the previous season's figures as a base is uncertain but seems the most likely way. A fairer way might be to average income over three years.
With talk of lower wages for players at Hereford, it looks as though Graham Turner may be trying to put his house in order before any new rules are introduced.