Clubs in League One and League Two have today voted for the introduction of a ‘Squad Salary Caps’ which take effect immediately.
The decision follows extensive and comprehensive consultation between all Clubs and the English Football League in respect of addressing sustainability and wage inflation issues across the EFL.
League One and League Two Clubs will now work for the 2020/21 season with fixed caps of £2.5million and £1.5million respectively.
When calculating total salary spending, the ‘cap’ includes:
- Basic Wages;
- Taxes;
- Bonuses;
- Image rights;
- Agents’ fees and;
- Other fees and expenses paid directly or indirectly to all registered players.
Any contract signed before today’s vote will be capped at an agreed divisional average until that contract expires.
Moving forwards, Clubs that are relegated will be permitted to cap all contracts at the divisional average prior to the Club’s relegation until those contracts expire.
EFL CEO, David Baldwin said: “The term ‘salary cap’ is an emotive one, creating the impression of a restrictive measure but we are clear in our view that this is neither the objective nor the likely effect of these changes to EFL Regulations. The financial impact of Covid-19 will be profound for EFL Clubs and today’s vote will help ensure Clubs cannot extend themselves to the point that could cause financial instability.
“Over the last two weeks the discussions amongst Clubs in both Leagues One and Two have been healthy and constructive, allowing us to reach a clear consensus today and I am pleased that the Clubs have determined to adopt the new approach. We will now work with all Clubs, the PFA and, where appropriate, other stakeholders to implement the new rules and continue our efforts to bring long-term sustainability to the EFL.”
