EFL considers salary cap as part of reform of club financial regulations

April 11 – Following UEFA’s introduction of new financial monitoring rules, the English Football League (EFL) is also considering new financial fair play rules, including a salary cap at 70% of club revenue.

The new rules may be introduced as early as this summer in a bid to stop the overspending in the Championship, the second-tier of English football, according to a report in the Daily Telegraph. The EFL also expects an overhaul of the parachute payment system that compensates clubs relegated from the Premier League to the Championship, and is criticised by many clubs in the league as providing an unfair competitive advantage in the battle for promotion.

EFL chairman Rick Parry said: “We’re totally committed to both – better regulation, but provided it goes hand in hand with a rethink on distribution.”

“We will be therefore refining in conjunction with the Premier League our own profit and sustainability rules, which don’t work in the Championship because clearly clubs are neither profitable nor sustainable.”

Parry suggested that the EFL may follow the new UEFA model. Last week, Nyon announced a squad cost rule that will cap fees and salaries of men’s first-team squads at 70% of revenue. The rule will be phased in over the next three years and apply over a calendar year instead of on a season-by-season basis.

If clubs don’t keep to the 70% threshold, they will face pre-determined sporting and financial sanctions.

The scale of the sanctions have yet to be detailed but UEFA indicated they would include exclusion from their club competitions.

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