LONDON: League One and League Two clubs, representing the third and fourth tiers of English football, have voted in favour of introducing salary caps for their squads, the English Football League (EFL) said in a statement on Friday (Aug 7).
League One clubs agreed to cap total expenditure on player salaries at £2.5 million while those in League Two agreed to an upper limit of £1.5 million.
"The term 'salary cap' is an emotive one, creating the impression of a restrictive measure but we are clear in our view that this is neither the objective nor the likely effect of these changes to EFL Regulations," EFL CEO David Baldwin said.
The cap includes basic wages, taxes, bonuses, agents' fees, image rights and other expenses, but excludes payments linked to progress in cup competitions or promotion.
Any income generated by loaning out players will be deducted from the clubs' salary cap calculations.
A number of EFL clubs faced financial difficulties even before English soccer endured a three-month stoppage due to the COVID-19 pandemic.
However, the move to introduce salary caps was opposed by the Professional Footballers' Association (PFA), which said it was being rushed into without enough consultation with the players.
"The financial impact of COVID-19 will be profound for EFL clubs and today's vote will help ensure clubs cannot extend themselves to the point that could cause financial instability," Baldwin added.
"We will now work with all clubs, the PFA and, where appropriate, other stakeholders to implement the new rules and continue our efforts to bring long-term sustainability to the EFL."
Discussions over a salary cap in the second-tier Championship are still ongoing.