League One and Two vote to introduce salary cap from 2020-21 season

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Clubs in Leagues One and Two have on Friday voted through the introduction of salary caps as part of their bid to ensure financial stability.

League One clubs will be limited to a cap of £2.5million, while that will drop to £1.5m for those in the bottom tier of professional football in England.

The caps will cover all outgoings on: basic wages, taxes, bonuses, image rights, agents' fees and "other fees and expenses paid directly or indirectly to all registered players".

Clubs will be free to spend what they wish on bonuses linked to promotion or progression in domestic cups as they will not fall within the cap, while any savings made on players loaned out will be considered.

EFL CEO, David Baldwin, said:"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.

“Over the last two weeks the discussions amongst Clubs in both Leagues One and Two have been healthy and constructive, allowing us to reach a clear consensus today and I am pleased that the clubs have determined to adopt the new approach. 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 amongst Championship clubs over proposals to further secure their financial futures continue.

Clubs relegated from the Championship without a salary cap and into League Two will cap all contracts at the divisional average prior to their relegation until contract's expire or are renewed.

Should clubs exceed their respective caps by up to five per cent, a penalty would be incurred for every £1 in excess. Should clubs overrun the cap by more than five per cent, they will be referred to an Independent Disciplinary Commission where sanctions could be handed down.

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