English Football League Introduces Salary Cap For Clubs

English football clubs in League One and League Two have voted in favour of introducing financial controls in the form of salary caps.

Clubs voted for a limit of £2.5million per club in League One and £1.5 million per club for those in League Two.

Championship clubs have held preliminary talks over introducing an £18m cap and it remains a possibility this move could come in ahead of the start of the 2020/21 campaign

The caps will include wages, bonuses, taxes and image rights, plus agents’ and other relevant fees. However, any bonuses gained from promotion or progression in cups will be exempt and income from players leaving on loan will be deducted.

The English Football League (EFL) say the caps, which will come into force immediately, will help to address issues regarding sustainability and wage inflation in the leagues.

Any team found to have breached the salary limits by up to 5 per cent will face a financial penalty for every £1 by which they exceed the limit.

Any club exceeding the ‘overrun’ is then referred to an independent disciplinary commission for further sanction.

The Professional Footballers’ Association (PFA) has criticised the decision, saying that the vote was rushed and called the move “unlawful and unenforceable”

A PFA statement said: “The EFL has ignored its legal obligation to consult with the PFA and the Professional Football Negotiating and Consultative Committee.”

“As such, the legal advice we have received is clear that the salary cap envisaged by the EFL would be unlawful and unenforceable.”

“The PFA has already served its notice of arbitration on the EFL and until such time that arbitration is determined one way or another, the new regulations should have no effect.”

“While we share the league’s commitment to protecting the long-term sustainability of the leagues, the salary cap proposals have been rushed through without the proper consideration or consultation.”

It remains to be seen whether the PFA’s legal challenge will be upheld.

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Mohit Pasricha

Mohit Pasricha

Solicitor at Mackrell.Solicitors
Mohit is a solicitor and Head of Sports Law at Mackrell.Solicitors, advising and representing clients within the sports sector by providing specialist advice on a wide range of commercial, corporate and intellectual property matters. His clients include clubs, commercial sponsors, sports agents, and individual sporting professionals.