PNE wages under control

Peter Ridsdale
Peter Ridsdale
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Peter Ridsdale estimates that Preston’s wage bill is about a quarter of what it was when the club were in the Championship.

While relegation to League One in May 2011 led to expenditure being cut, the Football League introducing their financial fair play rules last summer meant clubs had to fall in line with strict guidelines.

At League One level, spending on players’ wages is limited to 65% of a club’s turnover.

That 65% figure also has to absorb transfer fees, pay-offs to players having contracts cancelled and agents’ fees.

Newly-relegated clubs have a year’s grace, but with North End already in League One when the rules were brought in, they had to immediately comply.

Ridsdale said: “The wage bill is probably 25% of what it was three or four years ago.

“The fair play rules require us to be at 65% or less of our turnover in that respect.

“It’s not just the wage bill – all transfer fees, all fees to agents and pay-offs to players have to go in that 65% 

“We are within it, and those are the pressures we work within.

“We have had to try and get the team performing at a time when the wage bill is like that.

“People think that is easy, but it’s not.

“Next season the limit comes down to 60% in League One.”

A club’s turnover does not include any income which can be classed as a debt.

So money loaned by an investor or owner cannot be included in the 65% figure, although a gift can.

Said Ridsdale: “There are some clubs out there spending way above that amount.

“For whatever reason, some people are putting in lump sums of equity to over-pay, and some have found themselves in financial difficulties.

“We have to manage the club properly.

“Some supporters want us to spend money anyway, and when we do spend it, then they say it’s bad management.”

With the 65% of turnover including pay-offs, it means there’s is still a hangover on the balance sheet of players who left the club.

Ridsdale said: “With the contracted players who have left, what we did with most of them was think how much they would go on and earn somewhere else.

“We then came to an agreement with them to cover the balance.

“In some cases we will have paid half of what the contract says, in other cases it might have been 40% or 60%.

“It meant a saving when it came to some of the players on high wages, although what we paid them still appears in this year’s financial figures.”