Right! Can you define the salary cap accurately? (I can't btw.)
I can but it is rather a long winded explanation
, I just can't seem to find the right words to make it more succinct
SALARY CAP LIMIT FOR 2012
The Salary Cap, finite upper limit, for 2012 is £300,000 for the Championship division and
£150,000 for Championship One (excluding payments to players detailed under Section 7 –
Non-Salary Cap Costs).
Notwithstanding the above, no club may ordinarily spend in excess of 40% of their Salary
Cap Relevant Income on Salary Cap Qualifying Costs, subject to the following provisions:
1. Clubs will submit to the RSCM, by 1 November 2011, their budget for 2012;
2. the RSCM will scrutinise this budget and agree a figure which represents 40% of
Salary Cap Relevant Income (to be known as the Club Agreed Salary Cap);
3. a club may exceptionally seek in writing a dispensation from the RFL to spend in
excess of 40% and/or the above finite upper limit (to be known as the Club Agreed
Salary Cap) subject to the following;
3(a) such a dispensation will not be granted unless the RSCM is in agreement that
the club can afford to spend in excess of the finite upper limit and/or 40% of
Salary Cap Relevant Income on player wages, having regard to the club’s
financial history, the level of debts at the club, a liquidity assessment of the club
and an assessment as to club’s overall club development strategy; and
3 (b ) an absolute upper limit of £400,000 (for a club in the Championship division) or
£200,000 (for a club in Championship One).
For further clarification of what constitutes a breach, please refer to Section 8.
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4.0 SALARY CAP RELEVANT INCOME
4.1 Where contra deals have been entered into with suppliers, the “income” may be included
within the return, provided that relevant VAT invoices have been raised.
4.2 Where the term “profit” is used in any heading falling within Salary Cap Relevant Income,
clubs are reminded that this is the gross profit relating to a particular commercial activity,
i.e. income less all direct costs. For clarity, the term “direct costs” should, in this instance,
include the purchase price of goods sold but excludes all overheads and salaries of staff
employed in a generally administrative capacity.
4.3 All amounts should be shown net of VAT.
4.4 Salary Cap Relevant Income shall be divided into 19 separate headings as detailed below:
4.4.1 Central Distributions – These distributions should be accounted for on an
actual basis taking into account the various distributions from the RFL.
4.4.2 BBC TV fees – Income should be accounted for as actually received.
4.4.3 Gate Receipts – Income should be accounted for as actually received.
4.4.4 Gate Receipts – Shared – Income relates to cup and friendly games. For home
clubs, income should be shown net of the away club’s share of receipts but
before deducting match day expenses. For away clubs, income should be the
actual share of receipts.
4.4.5 Season ticket sales – Although the majority of season ticket sales will be made
during October to February, the total income from all season ticket sales should
be apportioned evenly over the number of home league games during the
season. The proportion equivalent to the total number of home games played to
the end of the quarter should be shown in the return.
4.4.6 Sponsorship Income – Where sponsorships relate to the main club sponsor(s),
kit and player sponsors then the associated income for the year should be
spread equally over the playing season. For other sponsorships - such as match
and ball sponsors - the associated income should be shown in the period in
which the matches were played.
Please note that income deriving from the owners/directors of the club for this
purpose will be deemed to be classed as an Owners’ Contribution.
4.4.7 Distributions via the RFL – excluding Challenge Cup prize money which is
dealt with under Section 5. Other income should be accounted for when
4.4.8 Advertising Revenue – Advertising revenue should include all forms of
advertising including pitch branding, hoardings, scoreboard and programme.
Where advertising relates to individual matches, the associated income should
be shown in the period in which the matches were played. Otherwise, the
associated income for the year should be spread equally over the playing
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4.4.9 Profit on programme sales – Profit/ (loss) on programme sales relates solely to
the sale less the cost of producing programmes. Programme advertising income
should be included in “Advertising Revenue”.
4.4.10 Profit on hospitality sales – The associated income should be shown in the
period in which the matches were played. (See Section 14 ‘Definitions’).
4.4.11 Profit on merchandise sales – Profit on merchandise sales should also take
into account stock movements, damaged and obsolete stock as well as sales
and production costs. (See Section 14 ‘Definitions’).
4.4.12 Profit on lotteries and similar activities – Profit on lotteries and similar
activities relate to income, less prizes, from activities run by the club such as
raffles, golden gamble, guess the score and club lotteries. Agents’ fees should
be included within “Other Overheads” and not netted off against income. It
should be noted that lotteries, which are run independently from the club, should
not be included in this category. Any receipts from independently run lotteries
should be shown under “Donations”.
4.4.13 Profit on other commercial activities – Clubs should identify the individual
income streams that are not included in other categories.
4.4.14 Donations – Donations from other sources should be included as and when
4.4.15 Investment income – Investment income relates mainly to interest receivable
on deposits held at banks or other financial institutions and should be included
as and when received.
4.4.16 Other Salary Cap Relevant Income – Clubs must provide an analysis of all
items of income and expenditure included under this heading.
4.4.17 Bad debts – Any debts relating to income for the year, which will not be
recovered by the club, must be netted against income for that period, as soon as
the debt becomes irrecoverable. (See Section 14 ‘Definitions’)
4.4.18 Owners/Directors Contributions – Where a club director or owner (which maybe a corporate or charitable entity) has decided to write off or capitalise all or
part of his loan with the club, a signed personal letter to that effect must
accompany the Salary Cap Return - otherwise, no income shall be deemed to
arise from such an event. Clubs are reminded that, in the interests of equity,
retrospective arrangements will not be allowed.
4.4.19 Management Charges – Any management charges raised by associated group
companies must be netted against income.
5.0 NON-SALARY CAP RELEVANT INCOME
5.1 Sale proceeds from the sale of assets.
5.2 Transfer fee income received.
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5.3 Any Challenge Cup prize money as per the schedule issued from time to time should be
excluded from income providing the following is observed:
5.3.1 The prize money is paid to the players within 60 days of receipt by the club.
5.3.2 Any excess of bonus over prize money received and paid out by the club is
classed as Salary Cap Qualifying Cost.
5.3.3 Any excess of prize money over bonus paid out may be included as Salary Cap
For the avoidance of doubt, any payments paid out by clubs prior to receipt of prize money, cannot be
retrospectively or notionally set off against prize money.
6.0 SALARY CAP QUALIFYING COSTS
Salary Cap Qualifying Costs shall be divided into five separate headings as detailed below:
6.1 Player contract payments:
6.1.1 All guaranteed payments as stated in the player’s contract;
6.1.2 Any termination payments and payments in lieu of notice;
6.1.3 All signing on fees.
6.2 Player match payments:
6.2.1 Any remuneration based on appearances;
6.2.2 Any remuneration based on match results;
6.2.3 Any bonuses.
6.3 Player benefits
6.3.1 All accommodation costs paid by the club including rent, council tax bills,
telephone bills, heating and any other relevant costs. Where a club owns a house
then the “rent” shall be deemed to be the “rating value”;
6.3.2 All payments made to players’ agents by the club;
6.3.3 All payments for private medical cover of a player’s family or other persons
connected with the player (premiums for players are to be excluded);
6.3.4 Provision of cars for players, amount to be based on taxable benefit to the player,
which will also include car fuel benefits where applicable;
6.3.5 Cost of all travelling expenses paid to, or on behalf of, the player. Such expenses
will include all airfares and relocation costs of non-British players, irrespective of
whether they may be subject to income tax.
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6.4 Payments/(receipts) for players on loan
6.4.1 Loanee club – Cost should include any payments for the use of the player’s
services to the loaning club. Any match payments payable to the player should be
included within “Player match payments” above;
6.4.2 Loaning club – The club loaning the player should record the player’s usual
contract within “Player contract payments” above and record any associated
income from the loanee club as a negative cost within “Payments/(receipts) for
players on loan”. Not withstanding the above, in the case a club loaning any
players who are under 21 (see 7.3 below) it is not permissible to record any
associated income as a negative cost as the play’s contract payments do not
count towards the club’s Salary Cap costs.
6.5 Employee Benefit Trust Charges
6.5.1 For the avoidance of doubt, all payments into the trust relating to the Salary Cap
Year in question or liabilities/obligations/expectations to the trust for that year
should be recorded in the year as Salary Cap Qualifying Costs. In the absence of
information regarding obligations to the trust, the RSCM reserves the right to
estimate such an obligation and enter a notional amount in the club’s Salary
Note also the following relevant provisions:
6.6 Dual Roles
6.6.1 Where an employee of the club is employed in a capacity other than as a player,
and plays one or more first team games (excluding friendlies) in a season then he
will be considered a player and as such remuneration payable by the club for the
other duties shall also be included as Salary Cap Costs.
6.6.2 Each club may have an allowance of up to £20,000 for each player who acts as a
Community Development Officer in a project or role approved by the RFL
Community Development department. Such approval must be sought and
registered at the beginning of the competitive season and must be counter signed
by the Community Development department again at the end of the relevant
6.7 Payments to relations/associates
6.7.1 Any payment made to any relative or associate of a player or any other person,
which, in the opinion of the RSCM, relates to the player’s services (past, present
or future) to the club.
6.8 Payments to corporations in which the player has an interest
6.8.1 Payments to corporations in which the player has a direct or indirect benefic
.............does anyone fancy having a go at fathoming this out?
Edited by DOGFATHER, 03 November 2012 - 10:27 PM.