PFA Initiates Legal Action Against EFL Over League One Salary Cap Changes
The Professional Footballers’ Association (PFA) has launched legal proceedings against the English Football League (EFL) concerning recent alterations to salary caps in League One.
In May, the EFL announced that starting from the 2026-27 season, the current Profitability and Sustainability (P&S) financial framework would be replaced by new Squad Cost Rules (SCR). Under these new guidelines, clubs will see a reduction in the percentage of their turnover that can be allocated to wages from 60% to 50%.
For teams relegated from the Championship, the new rules permit them to spend 65% of their turnover on wages during their first season in League One, a decrease from the previous allowance of 75%. Additionally, the new framework includes manager salaries, and clubs are further restricted to spending no more than 50% of any cash injection from owners on wages.
In a statement released on Tuesday, the EFL expressed its “concern and disappointment” regarding the PFA’s legal challenge, asserting that the new rules do not significantly alter league regulation or impact players’ employment conditions. The EFL emphasized that these changes aim to foster responsible cost control and enhance financial sustainability within League One, stating, “This is not about undermining players’ interests. It is about creating a stable environment in which clubs can meet their obligations and continue to invest in football.” The league also mentioned its commitment to “engage constructively” with the PFA and other stakeholders.
The PFA contended that the league cannot implement these changes without full agreement from the Football Negotiating and Consultative Committee (PFNCC). A PFA statement highlighted concerns that the decision-making process, through which clubs voted to adopt new measures limiting spending on player wages, did not align with the necessary consultation and agreement procedures involving EFL membership, the PFA, FA, and Premier League.
The EFL rejected the PFA’s stance, asserting that it “did not accept that the PFA’s position was correct.”
Previously proposed salary caps for League One and League Two were withdrawn in 2021 after an independent arbitration panel ruled them as “unlawful and unenforceable.” Under those proposals, clubs in the third tier would have faced a salary cap of £2.5 million, while fourth-tier teams would be capped at £1.25 million.
The Professional Footballers’ Association (PFA) has started legal proceedings against the English Football League (EFL) over changes to salary caps in League One.
In May, the EFL announced that Squad Cost Rules (SCR) would replace the current Profitability and Sustainability (P&S) financial framework from 2026-27.
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In League One the changes would reduce the percentage of turnover that clubs could spend on wages from 60% to 50%.
Teams relegated from the Championship are permitted to spend 65% of turnover on wages in their first season in the third tier, down from 75%.
Manager pay has also been incorporated into the new framework and clubs are also restricted to spending no more than 50% of injection of cash from owners on wages.
In a statement on Tuesday, the EFL said it was “concerned and disappointed” by the PFA’s legal challenge and it “did not consider the new rules to be a major change in the regulation of the league affecting a player’s terms and conditions of employment”.
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“They are designed to support responsible cost control and improve financial sustainability across League One,” it added.
“This is not about undermining players’ interests. It is about creating a stable environment in which clubs can meet their obligations and continue to invest in football.”
Meanwhile the league said that it would continue to “engage constructively with the PFA and other stakeholders”.
The PFA argued the league could not implement changes “unless there was full agreement” with the Football Negotiating and Consultative Committee (PFNCC).
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“We believe that the process through which clubs have voted to bring in these new measures, which will artificially restrict and tighten what clubs can spend on player wages was not in line with the consultation and agreement process required by the EFL’s membership (alongside the PFA, FA and Premier League) of the Professional Football Negotiating and Consultative Committee (PFNCC),” a PFA statement said.
The EFL said that it “did not accept that the PFA’s position was correct”.
A previous plan for salary caps to be brought into League One and League Two were withdrawn in 2021 following a decision by an independent arbitration panel.
Third-tier clubs would have been given a £2.5m ceiling for salaries and fourth tier sides £1.25m under the proposals however a claim from the PFA that the caps were “unlawful and unenforceable” was upheld by the panel.
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