League one and two clubs vote to introduce a salary cap

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League One clubs will be able to spend up to £ 2.5million on player salaries, bonuses and various associated fees.

Ligue 1 and Ligue 2 clubs voted in favor of introducing a salary cap, taking effect immediately.

Limits have been set at £ 2.5m and £ 1.5m for the respective divisions.

Salaries, bonuses, taxes and image rights, plus agent fees and other relevant fees, will be included in the cap, but income earned from promotion or progression in cuts will be exempt.

Clubs will be fined or otherwise sanctioned if they exceed spending limits.

A statement from the English Football League (EFL) said: “The decision follows extensive and comprehensive consultation with all clubs in addressing sustainability issues and wage inflation in the EFL, which were launched before the suspension of football in March following the Covid. -19 epidemics and continued into the summer.

“These discussions culminated in today’s divisional vote, with representatives from Ligue 1 and Ligue 2 clubs having chosen to implement the new measures in place of the existing salary cost management protocols.

The statement added that third and fourth tier clubs are talking about “additional measures to address the financial viability of clubs”, while league clubs are continuing discussions “with respect to amendments to their own financial controls”.

Ahead of Friday’s vote, the Professional Footballers Association (PFA) said it “fears the proposed cap may be rushed through, without proper consideration and consultation.”

“Healthy and constructive” discussions

EFL CEO David Baldwin added: “The term ‘salary cap’ is an emotional term, creating the impression of a restrictive measure, but we are convinced in our opinion that it is neither the neither objective nor the probable effect of these changes to the EFL regulations.

“The financial impact of Covid-19 will be profound for EFL clubs and today’s vote will help ensure that clubs cannot expand to the point of causing financial instability.

“Over the past two weeks the discussions between the clubs in Leagues 1 and 2 have been healthy and constructive, allowing us to reach a clear consensus and I am happy that the clubs have decided to take 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. “

What happens if a club exceeds the cap?

If a club exceeds the salary cap by up to 5%, they will incur a financial penalty for every £ 1 over the limit.

Any club exceeding the “overrun” will be referred to an independent disciplinary commission for further sanction.

And what about clubs that move between divisions?

The EFL says “transition agreements” have been incorporated for relegated clubs and players on longer-term contracts.

Their statement added: “Any contract entered into on or before the vote will be capped at an agreed divisional average until that contract expires.

“As they progress, relegated clubs will be allowed to cap all contracts at the division average before the club is relegated until those contracts expire. “

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