League One Clubs’ Salary Cap And Luxury Tax Plans To Be Snubbed By Efl

The EFL is to reason extremist proposals from League One clubs to present a £4.7m net headdress and a luxury taxation for clubs that overspend.

Eighteen League One clubs wrote to nan EFL chair, Rick Parry, this period advocating a fixed squad net allowance, which they reason is required to get spending nether power successful a section wherever nan median nonaccomplishment among 24 clubs past play was £5.2m.

The clubs, led by Peterborough and Reading, besides projected a 100% taxation connected each penny of overspending supra nan cap, creating a money that would beryllium redistributed to clubs who complied. Luxury taxes are commonplace successful American sport, pinch Major League Baseball and nan NBA utilizing them to enforce net caps.

Parry is understood to person acknowledged nan letters and expressed willingness to talk ways of promoting greater sustainability and reducing reliance connected proprietor backing but will not backmost nan changes. The matter is understood to person been discussed connected Thursday by nan EFL board, which concluded it would not support nan clubs’ proposals.

The EFL sought to present net caps successful Leagues One and Two 4 years agone aft nan Covid pandemic near galore clubs facing acute financial problems, but it was thwarted by a ineligible situation from nan Professional Footballers’ Association.

The PFA is besides threatening to situation nan Premier League’s scheme to present a financial regularisation known arsenic anchoring, which would limit each club’s spending connected transfers and subordinate wages to 5 times nan cardinal media gross received by nan bottommost nine successful nan erstwhile season. Premier League clubs are owed to ballot connected anchoring astatine their shareholders gathering adjacent Friday.

The EFL Board is understood to person concluded that it would beryllium irresponsible to endorse a net headdress that could besides beryllium taxable to a PFA ineligible challenge. There are besides misgivings astir 1 section seeking to prosecute fundamentally different financial regulations

League One could spell it alone, pinch a two-thirds mostly ballot of its clubs required to change nan financial regulations, but it is unclear whether they are consenting to spell against nan board’s wishes.

The Championship’s profitability and sustainability rules, which align pinch those successful nan Premier League, are different from nan net costs guidance protocol utilized successful Leagues One and Two but nan underlying principles are nan same.

The EFL is expected to show nan League One clubs location are different ways successful which they could get spending nether control. League One clubs tin walk 60% of turnover connected subordinate expenditure. The limit is 50% successful League Two, wherever spending connected managers is besides included.

The EFL declined to comment.