EFL Chief Urges Sustainable Financial Reforms Amid Legal Dispute with PFA
The chief executive of the English Football League (EFL), Trevor Birch, has warned that the current financial losses faced by clubs pose a “systemic insolvency risk” for the football pyramid. This statement follows legal action initiated by the Professional Footballers’ Association (PFA) against the EFL concerning new financial regulations in League One.
In May, the EFL announced the introduction of Squad Cost Rules (SCR), set to replace the existing Profitability and Sustainability (P&S) framework starting from the 2026-27 season. One of the significant changes enshrined in these new rules is the reduction of the percentage of turnover that clubs can allocate to player wages, decreasing from 60% to 50% in League One.
The PFA, which advocates for professional footballers, contends that the EFL cannot implement these modifications without unanimous consent from the Professional Football Negotiating and Consultative Committee (PFNCC). Birch, who played professionally until the age of 23, acknowledged that football careers are short yet stated that the financial health of EFL clubs has become “not sustainable.”
Over the last five years, the average player expenditure in League One has surged from £3.8 million to £8.0 million, with losses escalating from £2.3 million to £7.3 million. The previous season saw average losses in the Championship reach £21.6 million.
“Financial sustainability and player protection are not opposing ideas,” Birch emphasized in his open letter. “They are inseparable. A financially secure club is more likely to honor contracts, pay wages timely, invest in facilities, and provide long-term career opportunities. This issue extends beyond League One; it is even more pronounced in the Championship.”
Birch also reflected on a past proposal to implement salary caps in League One and League Two, which was retracted in 2021 after the PFA labeled the new rules as “unlawful and unenforceable.” The association continues to voice its opposition to the latest changes, arguing they could adversely affect player salaries.
“The PFA expresses valid concerns that these changes might suppress wages and limit spending on squads,” Birch noted. However, he stressed that failing to act only exacerbates the difficulties clubs face when financial backers are unwilling or unable to cover escalating funding needs.
“The intent behind these regulations is not to stifle ambition but rather to establish safeguards so clubs can invest sensibly, remain competitive, and avoid financial peril that jeopardizes their long-term viability,” he added.
Sheffield Wednesday’s recent struggles highlight the financial turmoil within the league; the club was placed under administration after its owner, Dejphon Chansiri, ceased funding, resulting in an 18-point deduction for financial breaches.
Birch remarked that fans desire clubs to possess “the means and security to remain at the very heart of their communities.” He stated that supporters yearn for ambition alongside a sense of genuine hope, fair competition, and a vibrant league structure that offers meaningful promotion and relegation.
“Litigation isn’t the solution,” Birch concluded. “It won’t address the fundamental challenges within the game: a financial model where too many clubs are compelled to pursue success at the expense of unsustainable losses that owners are expected to bear indefinitely. It is not sustainable.”
Additionally, Birch pointed out that a “fairer and more equitable distribution model” with the Premier League is vital for the future stability of EFL clubs, noting that the solidarity agreement has remained unchanged since 2019.
The level of losses sustained by clubs has created “a systemic insolvency risk” for the football pyramid, says EFL chief executive Trevor Birch.
Birch issued an open letter after the Professional Footballers’ Association (PFA) began legal proceedings against the EFL over changes to financial rules in League One.
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In May, the EFL announced Squad Cost Rules (SCR) would replace the Profitability and Sustainability (P&S) financial framework from 2026-27.
Within the changes was a lowering of the percentage of turnover that clubs could spend on wages. In League One, it reduced the percentage from 60% to 50%.
The PFA – the union for professional footballers – argued the league could not implement changes “unless there was full agreement” with the Professional Football Negotiating and Consultative Committee (PFNCC).
Birch, who was a player until the age of 23, said he recognised football was a short career, but added the financial situation for EFL clubs was “not sustainable”.
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Over the past five seasons, average player expenditure in League One has increased from £3.8m to £8.0m, while loses have risen from £2.3m to £7.3m. Last season, average losses in the Championship reached £21.6m.
“Financial sustainability and player protection are not opposing ideas,” Birch wrote. “They are inseparable.
“A club that is financially secure is more likely to honour contracts, pay wages on time, invest in facilities and provide long-term career opportunities.
“This is not solely a League One issue. In the Championship it is even starker.”
‘Litigation isn’t the answer’ – Birch
A previous plan for salary caps to be brought into League One and League Two was withdrawn in 2021 after the PFA argued the new rules would be “unlawful and unenforceable”.
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The PFA is unwilling to accept the latest changes, feeling it could impact upon its members’ salaries.
“The PFA insists the new rules could suppress wages and restrict spending on squads. That concern deserves to be heard,” Birch added.
“But there is also a legitimate concern that doing nothing only perpetuates the challenges our clubs face, with owners unwilling or unable to provide increased funding requirements.
“The purpose of these controls is not to limit ambition, but to put appropriate guardrails in place, so clubs can invest responsibly, remain competitive and avoid being pushed into spending that places their long-term future at risk.”
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Sheffield Wednesday spent most of last season in administration after the club’s then owner, Dejphon Chansiri, withdrew funding.
The Owls were deducted 18 points for financial breaches and came close to going out of business, with questions raised over the impact on the competitiveness of the division.
Birch said fans wanted clubs to have “the means and security to remain at the very heart of its community in the future”.
He added: “Supporters want ambition, but they also want hope that feels real, jeopardy that feels fair and competitions that remain open, credible and exciting, whether watched from the stands or on television.
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“They want promotion and relegation stories that matter, local pride that endures and clubs that last beyond one ownership cycle.
“Litigation isn’t the answer. It will not solve the underlying challenge facing the game: a financial model in which too many clubs are asked to chase success through losses that owners are expected to absorb indefinitely.
“It is not sustainable.”
Birch added a “fairer and more equitable distribution model” with the Premier League would be crucial to EFL clubs, with the solidarity agreement unchanged since 2019.
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