Wages, bonuses and other fees relating to players aged 21 or over will be included within the cap, but income gained from promotion or progression in cups will be exempt. Clubs will be sanctioned if they exceed the spending limits.
A statement from the English Football League said: “The decision follows extensive and comprehensive consultation with all clubs in respect of addressing sustainability and wage inflation issues across the EFL, which were initiated prior to the suspension of football in March following the Covid-19 outbreak and have continued during the course of the summer. Those discussions culminated in today’s divisional vote.”
Many lower-league sides have been massively stretched financially because of the economic effects of the Covid-19 pandemic despite wage cuts. League One and Two clubs voted to curtail their 2019/20 seasons early, with the financial cost of completing their remaining matches being the key reason.
English Football League chairman Rick Parry has previously stated that all 72 English professional teams are facing a collective £200 million financial hole because of Covid-19.
Prior to the meeting between the clubs and the EFL, the Professional Footballers’ Association (PFA) said it was “vitally important” players spoke to their union before accepting any wage cuts enforced by individual clubs.
The PFA warned the idea of a cap was being “rushed through, without proper consideration or consultation.”
One difficulty in imposing the cap is that the Championship could set their own ceiling at £18 million if clubs agree, meaning League One teams vying for promotion could not possibly hope to compete if they went up.
But EFL Chief executive David Baldwin said today’s decision will stop clubs over-committing themselves.
“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,” he said.
“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 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.”
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