New Owners - Redwood Watch

[Brogue]

Not sure if posted anywhere else as yet but below is Rob’s latest Q&A:

https://www.youtube.com/watch?v=N5npTmb4ths

[Sutekh]

So, following on from Rob’s chat with Darragh MacAnthony it seems the L1 owners have got together and written to Rick Parry about how to “improve” the Football League fair play system. Plans suggested are to set every club in a division with the same playing budget and if clubs break it they then will have to pay a “luxury” tax into a pot which is then distributed equally amongst the other clubs in that division the following season. Seems to me a decent idea (and something to change to from the stupid financial rules we have currently) and it appears to have the buy in of many of the L1 owners so presume it will be fully fleshed out and put up for approval at the next AGM.

[Royal Ginger]

So, following on from Rob’s chat with Darragh MacAnthony it seems the L1 owners have got together and written to Rick Parry about how to “improve” the Football League fair play system. Plans suggested are to set every club in a division with the same playing budget and if clubs break it they then will have to pay a “luxury” tax into a pot which is then distributed equally amongst the other clubs in that division the following season. Seems to me a decent idea (and something to change to from the stupid financial rules we have currently) and it appears to have the buy in of many of the L1 owners so presume it will be fully fleshed out and put up for approval at the next AGM.

There is no perfect system, however, this exists in American sport particularly in Baseball and just sees the ‘poorer’ billionaires who don’t want to spend much pocketing millions of dollars of the richer teams money. It’d probably work in football briefly but in the long term it has shown to be a disincentive and bad for player wages.

[Snowflake Royal]

The players are paid too much anyway.

I can't see it getting off the ground. Even in L1 without your Birmingham and Wrexham's there's a hell of a difference between say Bolton and Wimbledon.

I don’t hate it.

[Sutekh]

So, following on from Rob’s chat with Darragh MacAnthony it seems the L1 owners have got together and written to Rick Parry about how to “improve” the Football League fair play system. Plans suggested are to set every club in a division with the same playing budget and if clubs break it they then will have to pay a “luxury” tax into a pot which is then distributed equally amongst the other clubs in that division the following season. Seems to me a decent idea (and something to change to from the stupid financial rules we have currently) and it appears to have the buy in of many of the L1 owners so presume it will be fully fleshed out and put up for approval at the next AGM.

There is no perfect system, however, this exists in American sport particularly in Baseball and just sees the ‘poorer’ billionaires who don’t want to spend much pocketing millions of dollars of the richer teams money. It’d probably work in football briefly but in the long term it has shown to be a disincentive and bad for player wages.

Sure Darragh said the players/PFA were also involved or had had some input and he felt they were broadly on board with it as they’d rather have clubs that weren’t looking over their shoulders every month and could pay wages on time.

Certainly think it’s a step up from the current set of restrictions that only help maintain the status quo and lead to all sorts of murky shenanigans as clubs look for loopholes.

Anyway we shall see if anything comes of it in due course.

[From Despair To Where?]

It's effectively a salary cap by the back door. I guess it works in American sports by there's greater parity between the size of the respective franchises (except maybe in MLS but clubs have allocated squad slots which can be paid outside the cap).

I guess it could work and it shows that owners are serious about regulating the game but I think some allowance based on revenue is appropriate.

[RoyalBlue]

So, following on from Rob’s chat with Darragh MacAnthony it seems the L1 owners have got together and written to Rick Parry about how to “improve” the Football League fair play system. Plans suggested are to set every club in a division with the same playing budget and if clubs break it they then will have to pay a “luxury” tax into a pot which is then distributed equally amongst the other clubs in that division the following season. Seems to me a decent idea (and something to change to from the stupid financial rules we have currently) and it appears to have the buy in of many of the L1 owners so presume it will be fully fleshed out and put up for approval at the next AGM.

There is no perfect system, however, this exists in American sport particularly in Baseball and just sees the ‘poorer’ billionaires who don’t want to spend much pocketing millions of dollars of the richer teams money. It’d probably work in football briefly but in the long term it has shown to be a disincentive and bad for player wages.

Possibly bad for bog-standard players' wages (is that a bad thing?). The better players can and will still be very well paid IMO.

Many rate MLS as being the equivalent standard of upper L1/lower Championship.

The most recent reported median total remuneration (guaranteed compensation) for a Major League Soccer (MLS) player was $338,347 as of the September 2025 data release.

And that is guaranteed comp. They can also earn plenty from endorsements etc. That's not too shabby IMO and would perhaps help restore some financial sanity to our game.

[Linden Jones' Tash]

https://www.theguardian.com/football/20 ... dApp_Other

Says here that RC is pushing for a salary cap and luxury tax...

I thought American Republicans despised socialism...

I guess they embrace it when it's their own money being spent...

Oh the sweet irony....

[RoyalBlue]

https://www.theguardian.com/football/2025/nov/14/league-one-clubs-salary-cap-luxury-tax-snubbed-efl?CMP=Share_AndroidApp_Other

Says here that RC is pushing for a salary cap and luxury tax...

I thought American Republicans despised socialism...

I guess they embrace it when it's their own money being spent...

Oh the sweet irony....

Whether or not people view it as hypocrisy (i'm certainly no great fan of the US Republican movement), I think it's a great idea. He and Darragh MacAnthony have established a L1 owners group (I think there's only one or two who haven't joined) and the proposal is about stopping clubs going to the wall when owners try to buy success/promotion and subsequently fail/lose interest. They want to establish a more level playing field where promotion is earned through coaching success and development of players, together with the development of a club's business off the pitch, rather than the pure financial clout of some wealthy owners.

[Linden Jones' Tash]

https://www.theguardian.com/football/2025/nov/14/league-one-clubs-salary-cap-luxury-tax-snubbed-efl?CMP=Share_AndroidApp_Other

Says here that RC is pushing for a salary cap and luxury tax...

I thought American Republicans despised socialism...

I guess they embrace it when it's their own money being spent...

Oh the sweet irony....

Whether or not people view it as hypocrisy (i'm certainly no great fan of the US Republican movement), I think it's a great idea. He and Darragh MacAnthony have established a L1 owners group (I think there's only one or two who haven't joined) and the proposal is about stopping clubs going to the wall when owners try to buy success/promotion and subsequently fail/lose interest. They want to establish a more level playing field where promotion is earned through coaching success and development of players, together with the development of a club's business off the pitch, rather than the pure financial clout of some wealthy owners.

I never said its not a good idea....

Just seems self serving to be embracing socialist ideals to avoid investing/losing too much money...

[Snowflake Royal]

https://www.theguardian.com/football/2025/nov/14/league-one-clubs-salary-cap-luxury-tax-snubbed-efl?CMP=Share_AndroidApp_Other

Says here that RC is pushing for a salary cap and luxury tax...

I thought American Republicans despised socialism...

I guess they embrace it when it's their own money being spent...

Oh the sweet irony....

Whether or not people view it as hypocrisy (i'm certainly no great fan of the US Republican movement), I think it's a great idea. He and Darragh MacAnthony have established a L1 owners group (I think there's only one or two who haven't joined) and the proposal is about stopping clubs going to the wall when owners try to buy success/promotion and subsequently fail/lose interest. They want to establish a more level playing field where promotion is earned through coaching success and development of players, together with the development of a club's business off the pitch, rather than the pure financial clout of some wealthy owners.

I never said its not a good idea....

Just seems self serving to be embracing socialist ideals to avoid investing/losing too much money...

That's just Republicanism isn’t it... what gives me the best outcome?

[Clyde1998]

https://www.theguardian.com/football/2025/nov/14/league-one-clubs-salary-cap-luxury-tax-snubbed-efl?CMP=Share_AndroidApp_Other

Says here that RC is pushing for a salary cap and luxury tax...

I thought American Republicans despised socialism...

I guess they embrace it when it's their own money being spent...

Oh the sweet irony....

Whether or not people view it as hypocrisy (i'm certainly no great fan of the US Republican movement), I think it's a great idea. He and Darragh MacAnthony have established a L1 owners group (I think there's only one or two who haven't joined) and the proposal is about stopping clubs going to the wall when owners try to buy success/promotion and subsequently fail/lose interest. They want to establish a more level playing field where promotion is earned through coaching success and development of players, together with the development of a club's business off the pitch, rather than the pure financial clout of some wealthy owners.

I don't think the specific proposal is the best idea - a combination of the SCMP rules (ie. a share of revenue) with a luxury tax would be better personally. I feel having a fixed salary cap would essentially remove any incentive for clubs to grow their revenue.

As a broad concept though, I like it.

[Royal Ginger]

This salary cap crap has been bad for sport in the US. The strongest player’s union is Major League Baseball’s and they’ve been fighting against it tooth and nail for years.

Ask who wants it? It’s the millionaire/billionaire owners. It’s not about competitive balance (which it’s absolutely not achieved), it’s about the rich getting richer.

I don’t doubt that there’s a problem in the EFL but this sh*t isn’t the answer.

[Vision]

This salary cap crap has been bad for sport in the US. The strongest player’s union is Major League Baseball’s and they’ve been fighting against it tooth and nail for years.

Ask who wants it? It’s the millionaire/billionaire owners. It’s not about competitive balance (which it’s absolutely not achieved), it’s about the rich getting richer.

I don’t doubt that there’s a problem in the EFL but this sh*t isn’t the answer.

That’s exactly why Couhig, Mcanthony and the others want it though. They want it to be an “owners league” rather than a league run by administrators telling them what they can and can’t do with their clubs/businesses.

The US has the college draft system which does keep things a little fairer I think. I also think that the luxury tax
Idea does allow other clubs to benefit from the overspending of individual clubs.

The idea of a predominantly owner run league would be great if more clubs were fan run. But sadly they aren’t and I’m a bit sceptical about a league run by the likes of Couhig and McAnthony.

[WestYorksRoyal]

When are we going to hear again? Surely they must admit promotion is a joke and survival is the priority? How much will they back Richardson in January?

[Sutekh]

Very much think clubs should be allowed to be run exactly like what they are - a business. Some clubs would chance it and succeed, while others would chance it and fail. Reading would more than likely end up like Reading in the 1950s and 1960s, playing safe with zero ambition.

[morganb]

Couhig is apparently a businessman. Our other investors are probably businesspeople too. Why are they not treating Reading as a business?

For their companies would they really pick an inexperienced chairman and managers with little recent success? Would they really invest in all the fluffy bits around the edges like fireworks and AI?

Surely there are things to invest in first (players, staff) and things that are less essential? Especially if the idea is to sell on asap

[WestYorksRoyal]

Isn't their background baseball? It makes sense. That's a bit like watching a domestic T20 match or the Hundred here; you go for a good time, have a few drinks and the pyrotechnics for boundaries and wickets is part of the spectacle. Improving the off field experience is a good strategy to bring in more punters.

Football is different. People give up their day to stand in the cold on a winter's afternoon and what makes it worthwhile is the product on the pitch. If what's happening on the pitch is crap, there is nothing you can offer off it to compensate. Want more fans to come? Give them a good team on the pitch.

[Clyde1998]

There was a study referenced in an edition of Soccernomics which looked at win-maximisation vs profit-maximisation, based on the average performances and financial figures from England (1993-2004) and Spain (1994-2005).

Some important quotes from the study:

[It] is not surprising if we observe that the best players tend to command the highest wages. The importance of the insight from contest theory is that it is not absolute spending that determines performance, but spending relative to one's rivals.

On average, the Spanish teams were 12 places above their profit maximizing position over the sample period, but less than half a place below their win maximizing position. Similarly, the English teams are nearly 16 places above their profit maximizing position, but nearly four places below their win maximizing position.

Of course, profit maximization and win maximization subject to a zero profit constraint are just two points along a spectrum of possible objectives. Clearly, however, the evidence suggests that the behaviour of clubs in our sample conforms quite closely to short run win maximization.

Perhaps the most interesting result is that the historical status variable has a negative rather than positive coefficient, suggesting that past performance is a substitute for current performance. This makes some sense, since teams that have never experienced success may become desperate to meet the demand of the fans. We also find that teams facing relegation risk tend to increase their spending relative to the profit maximizing position. The fact that teams struggling for promotion and against relegation display a more substantial willingness to buy performance improvements is quite intuitive.

If clubs were truly profit maximizers, they might be expected to collude in order to reduce competition (competition, in this case, amounts to little more than business stealing). Collusive conduct appears characteristic of the closed U.S. major leagues, given that restraints such as salary caps and revenue sharing limit economic competition and help to generate financial surpluses. Clubs in European leagues have been noticeably unsuccessful at negotiating similar restraints.

Some examples (actual average position over period / win maximisation average position / profit maximisation average position):

1. Man Utd (2nd / 5th / 23rd - ie. 3rd in the Championship)
2. Arsenal (3rd / 9th / 29th)
3. Liverpool (4th / 11th / 33rd)
4. Chelsea (6th / 9th / 30th)
5. Newcastle (7th / 8th / 29th)
6. Aston Villa (8th / 12th / 33rd)
7. Leeds (8th / 12th / 34th)
8. Tottenham (11th / 12th / 33rd)
9. Reading (38th / 29th / 42nd)
10. Barcelona (3rd / 5th / 15th)
11. Real Madrid (3rd / 6th / 17th)

If we spend our time maximising our profits, we'll end up in the lower leagues indefinitely.

I don't know how the current financial balance between leagues would affect the results though - I can only imagine the huge revenue increases from getting promoted to the Championship would outweigh any cost reductions through being in League One for example.

[Linden Jones' Tash]

Reading FC has only once reported a profit in the last 25 years....

Profit maximisation is a misnomer - Loss minimisation is a more appropriate term for our predicament - with different degrees - extreme, moderate, unsustainable...