EFL forced to withdraw its controversial salary cap

In August 2020, the English Football League (“EFL”) introduced a salary cap to clubs in League One and League Two following wage inflation issues across the EFL and to address the sustainability of clubs. The Professional Footballers’ Association (“PFA”), the players’ union, brought a claim against the EFL for breaching its legal obligations by introducing a salary cap without the agreement of, or consultation with, the Professional Football Negotiating and Consultative Committee.

Last week, an independent arbitration panel ruled the salary cap must be immediately withdrawn after the PFA argued it was “unlawful and unenforceable”. This is a significant ruling as it has led to the EFL changing its rules and withdrawing the first salary cap in European football.

The PFA has recognised the economic impact of COVID-19 and the need for sustainability. The PFA stated “It is now in the best interest of the leagues, the clubs, and the players to work together and agree on rules that promote financial stability”. The PFA looks forward to working with the EFL on “reasonable and proportionate cost control measures for the future”.

If you have any queries or would like to discuss this further with our Sports Team, please email geoffrey.cunningham@freeths.co.uk or call 0797 388 2667.

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