High Court action has been launched by the Professional Footballers’ Association against the English Football League following a dispute over updated League One salary cap regulations. The legal challenge follows a vote by third-tier clubs in May to amend the Salary Cost Management Protocol (SCMP) rules, a move intended to cut financial losses and curb dependence on funding from team owners.
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 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.
However, the players' union claims the changes were pushed through without the requisite consultation across the Professional Football Negotiating and Consultative Committee (PFNCC), which comprises the EFL, Premier League, Football Association and the PFA itself. The PFA, which is the union for professional footballers, argued the league could not implement changes "unless there was full agreement" with the Football Negotiating and Consultative Committee (PFNCC). "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," a PFA statement said.
A previous plan for salary caps to be brought into League One and League Two was withdrawn in 2021 following a decision by an independent arbitration panel.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. In 2021, the PFA successfully challenged the introduction of a salary cap however, the EFL believe the current proposal is not a major change and so should not be judged in the same manner.
Average losses in League One have skyrocketed from £2.3m in 2021-22 to £7.3m last season. As Daily Mail Sport previously revealed, League One sides lost a staggering average of £7.3m last year, and the aim of the plans is to reduce an overwhelming reliance on ownership funding.