Can we sign players?

[Yorkshire Blue]

53 Non‑payment to Players

53.1 If following written notification from the Professional Footballers’ Association, a Club is found to be in default of any payment due in accordance with a Player's contract or payment in consequence of termination of such contract, The League may place an embargo on any transfer of any registration by such Club until the payment is made.

We were found to be in breach (twice) but I'd like to think that those payments have since been made which would mean that embargo would be lifted. The bigger issue is therefore likely to be the HMRC winding up order.

Any Club which has not within 28 (twenty eight) days of the relevant Due Date paid to HMRC the amounts due to be paid to HMRC to discharge:17.1.1 the Club’s full liability for PAYE & NIC... (a "Default Event")....
17.3 Consequences of a Default Event. Without prejudice to the general position (pursuant to Regulation 43.4) that all registrations must be approved by The League, a Club which is subject to a Default Event shall be subject to a registration embargo such that it shall not be permitted to register any Player with that Club without the prior written consent of The League for the period that the Club is subject to a Default Event.

I'd note that this seemingly pertains to PAYE and NIC only and not VAT.

There is also a wider power but that would only be used in exceptional events

The EFL Board has previously confirmed (Season 2010/11) that irrespective of whether or not a Club is formally embargoed, the EFL reserves the right under this Regulation to decline the registration of a player in the event that the Club concerned has demonstrated that it is unable to meet its existing financial obligations. Whilst most liabilities are already specifically covered under the Regulations, there can be cases where Clubs have demonstrate an inability to meet their other debts as and when they fall due which are not directly covered by the Regulations, and if those Clubs were permitted to continue unfettered in the transfer market this could undermine the integrity of our competitions and the public reputation of the EFL as a whole. The prospect of declining registrations outside of an embargo is only seen as an exceptional event and will only be deployed when the EFL deems that the circumstances are unusual enough to require this course of action.

If we are under embargo can we still sign players? Well, maybe.

Teams breaching salary cap rules under Financial Fair Play (FFP) rules can still sign players when under embargo if certain criteria apply.

... shall be subject to a Player registration embargo (the “Embargo”) such that The League shall refuse any application made by that Club to register any Player or any new contract of an existing Player with that Club save in the circumstances set out in Note 10.2.

10.2 The circumstances referred to in Note 10.1 are:


10.2.1 On a one out one in basis. These will only be allowed where:


(a) the Club’s registered playing squad is 24 or fewer registered Established Players (as defined by Note 10.3); and


(b) the annual Employee Cost of the Player coming in is no more than 75% of the equivalent annual Employee Cost (as defined by Note 10.3) of the Player going out (calculated as an average over the term of the remaining period of both Players’ contracts, taking note of any contract cancellation payments where relevant);


10.2.2 Where the Club needs to offer terms of re-engagement to an Under 24 Player or offer professional terms to a Scholar for the purposes of maintaining compensation rights in respect of that Under 24 Player or Scholar (as applicable);


10.2.3 Emergency Goalkeeper Loan in accordance with the provisions of Regulation 57.


10.3 For the purposes of Note 10.2 only:


10.3.1 an Established Player is one who has made at least one competitive appearance in the starting eleven for that Club at any time

It's important to note that these exemptions are stated for Salary Cap related breaches and not the events we are under embargo for. Is that deliberate or an oversight in drafting? Would the League apply the same logic for failure to pay HMRC as for SCMP breaches?
If it does apply (and I can't see where it says it does apply) we currently have only 23 players under contract who have played a first team game and with potentially Kelman, Humprhys and maybe others departing we potentially could be able to add players whilst still under embargo. So if we do see Jack Bridge gurning it won't necessarily mean that the embargo has been lifted...


One other thing we'll need to keep an eye on is

.....where any Club defaults on payment of any amounts:

51.6.1 due to any other Club (or club) (including but not limited to any Transfer Fee, Compensation Fee, Loan Fee, other contributions due pursuant to the terms of any Temporary Loan Transfer, or any subsequent payments which become due under the terms of any original transfer(s), ticket monies, or other payments pursuant to the terms of any other agreement); and/or


51.6.2 covered by Article 48.1.5 (football creditor claims of full time or former full time employees for arrears of remuneration due up to the date of termination of employment),

for a period of 30 days (whether one default of 30 days, or a number of individual defaults which when taken together amount to 30 days) or more in any 12 month period (1 July to 30 June) (‘Persistent Default’) then that Club shall not be permitted to pay or commit to pay any Transfer Fee, Compensation Fee or Loan Fee or any other form of payment (other than a sell on fee) in respect of the registration of any Player during the period:


(a) commencing on the date on which the Persistent Default occurred; and


(b) ending at the end of the next following Season.

I think we're still under 30 days but haven't checked. If we went over we won't be able to pay any transfer fees this season.

That's my understanding based on a skim reading of the regulations.

 

[Spaceman Spiff]

Thanks Yorkie, an excellent and thoroughly researched summary of the situation

It will be interesting to see whether we sign Bridge, as you say. I do wonder what happened with Osadebe and Vassell though? The total silence about them is really poor IMO.

 

[GBJ]

Good question.

I was under the impression that it’s still the same situation as back in January, where we can sign players but not register them.

we currently have only 23 players under contract who have played a first team game and with potentially Kelman, Humprhys and maybe others departing we potentially could be able to add players whilst still under embargo.

Also just wanted to pick up on this point quickly. We may have 23 registered players as it stands, but two of them - Acquah & Klass - have not returned to training, so their futures are fairly unclear at this point.

 

[Yorkshire Blue]

Good question.

I was under the impression that it’s still the same situation as back in January, where we can sign players but not register them.



Also just wanted to pick up on this point quickly. We may have 23 registered players as it stands, but two of them - Acquah & Klass - have not returned to training, so their futures are fairly unclear at this point.

Good point. The question should be can we register the players we sign!

The 23 doesn't include Acquah and Klass nor Sam Barratt. Is Barratt training with us?

 

[GBJ]

Good point. The question should be can we register the players we sign!

The 23 doesn't include Acquah and Klass nor Sam Barratt. Is Barratt training with us?

Ah ok.

I’ll find out, I haven’t heard anything about him tbh.

 

[GBJ]

@Yorkshire Blue Sam Barratt is training with us atm.

 

[Yorkshire Blue]

**bumping this**

Selling Humphrys opens up an additional slot but we may not be able to register Akinola in his place as we can only use that exemption if the annual Employee Cost of the Player coming in is no more than 75% of the equivalent annual Employee Cost of the player going out (calculated as an average over the term of the remaining period of both Players’ contracts, taking note of any contract cancellation payments where relevant)

So unless Akinola's on less than 3/4 of the wages of Humprhys we won't be able to register him...

 

[GBJ]

**bumping this**

Selling Humphrys opens up an additional slot but we may not be able to sign Akinola as we can only use that exemption if the annual Employee Cost of the Player coming in is no more than 75% of the equivalent annual Employee Cost of the player going out (calculated as an average over the term of the remaining period of both Players’ contracts, taking note of any contract cancellation payments where relevant)

So unless Akinola's on less than 3/4 of the wages of Humprhys we won't be able to register him...

Make no mistake, Akinola has definitely signed. But you’re right, whether we register him or not is another matter.

 

[Supa Shrimpa]

so, after all that waffle from RM...do we know what the answer is to this question is, yet ?

 

[NZamba Legend]

Make no mistake, Akinola has definitely signed. But you’re right, whether we register him or not is another matter.

Joins Klass in the upside down.

 

[Westcliff DGS]

Good question.

I was under the impression that it’s still the same situation as back in January, where we can sign players but not register them.



Also just wanted to pick up on this point quickly. We may have 23 registered players as it stands, but two of them - Acquah & Klass - have not returned to training, so their futures are fairly unclear at this point.

Thought we had 22 now SH has left

 

[GBJ]

Make no mistake, Akinola has definitely signed. But you’re right, whether we register him or not is another matter.

@Yorkshire Blue, guess we have registered him

 

[Yorkshire Blue]

@Yorkshire Blue, guess we have registered him

I could be cynical and say I’ll still only believe that when I see him play for us and he’s not mysteriously held out because of paperwork issues or an unexplained injury but after the MMN debacle we couldn’t even be sure he was legitimately registered....

So what’s happening with your centre-half?

 

[GBJ]

I could be cynical and say I’ll still only believe that when I see him play for us and he’s not mysteriously held out because of paperwork issues or an unexplained injury but after the MMN debacle we couldn’t even be sure he was legitimately registered....

So what’s happening with your centre-half?

I don’t know for sure, but I’ll put it this way, based on Ron’s quote of “making vacancies“ I wouldn’t be surprised to see some outgoings in the squad - possibly youngsters - in order to bring new faces in and register them. Just a guess.

 

[fredheim_holm]

I don’t know for sure, but I’ll put it this way, based on Ron’s quote of “making vacancies“ I wouldn’t be surprised to see some outgoings in the squad - possibly youngsters - in order to bring new faces in and register them. Just a guess.

Loaning out some youngsters to me makes total sense, especially considering how Ron seems to be quite frustrated how youthful our squad is.

 

[hlane17]

Loaning out some youngsters to me makes total sense, especially considering how Ron seems to be quite frustrated how youthful our squad is.

Loans supposedly do not transfer registration as their main club will still be Southend. I think Ron will have to make some harsh decisions and let some of these young prospects go.

 

[GBJ]

Loaning out some youngsters to me makes total sense, especially considering how Ron seems to be quite frustrated how youthful our squad is.

I’m not sure loaning them out would work, because we’d still hold the registrations.

I think - although someone will likely correct me - we’re allowed 23 registered players?

So it may be the case that we would need to release them, and then we could sign replacements.

But again, that’s just guesswork

 

[Yorkshire Blue]

Loaning out some youngsters to me makes total sense, especially considering how Ron seems to be quite frustrated how youthful our squad is.

I’m not sure loans create space and even if they do the incoming wages need to be lower than the outgoing.

Replacing a L1 contract with someone who was on a non-league contract works but this may be a challenge if we’re replacing someone like MMN.

 

[GBJ]

Loans supposedly do not transfer registration as their main club will still be Southend. I think Ron will have to make some harsh decisions and let some of these young prospects go.

Harsh decisions indeed... but our football league status is on the line, so needs must, unfortunately

 

[NZamba Legend]

Loans supposedly do not transfer registration as their main club will still be Southend. I think Ron will have to make some harsh decisions and let some of these young prospects go.

To be honest, needs must. The interests of the club have to come before those of individual players. If we let a couple go who are genuinely good enough they will make it anyway, look at Kightly, Woodyard etc