England's League One, League Two Adopt a Salary Cap

Clubs in the third and fourth professional divisions in English football have voted to introduce squad salary caps, a move called unlawful by the players’ union.

The cap will be set at 2.5 million pounds ($3.2 million) in League One and 1.5 million pounds ($2 million) in League Two.

The aim is to tackle wage inflation and make the leagues more sustainable a year after Bury was expelled due to financial troubles. There are also ongoing financial issues across the leagues with fans due to be prohibited from stadiums when the new season begins next month due to the coronavirus pandemic.

But the players’ union said the salary caps were “rushed through without the proper consideration or consultation” and is demanding their introduction is put on hold by the English Football League, pending arbitration.

“The legal advice we have received is clear that the salary cap envisaged by the EFL would be unlawful and unenforceable,” the Professional Footballers’ Association said in a statement. “The PFA has already served its notice of arbitration on the EFL.”

The EFL said the cap would cover basic wages, taxes, bonuses, image rights, agents’ fees and other fees and expenses paid directly or indirectly to all registered players.

“We’ve done all our recruitment expecting it would come and then the EFL said it would start at the end of July, and now it starts from today,” said Dale Vince, chairman of fourth-tier side Forest Green. “So there has been some big spending in the gap, in anticipation of the cap, but only by a few clubs. We won’t feel the full effect of the cap until next season — not the one coming, the one after.”

The players’ union expressed concerns about the proposals as they are drafted, and has called for further consultation and clarity around the objectives for introducing a cap.