Here, the PA news agency looks at the caps in more detail.
EFL Statement: 'Squad Salary Caps' introduced in @SkyBetLeagueOne and @SkyBetLeagueTwo.#EFL https://t.co/MMQUp72rtE
— EFL Communications (@EFL_Comms) August 7, 2020
A cap of £2.5million has been agreed by a vote of League One clubs. In League Two, the cap has been fixed at £1.5m. It comes into effect immediately.
No. Clubs are welcome to pay individual players whatever they want, provided they stay within the overall cap for the squad.
The finances of EFL clubs, particularly at League One and Two level, have been severely impacted by the loss of matchday revenue, with mass gatherings banned since March to limit the spread of coronavirus. EFL chairman Rick Parry talked about a combined £200m “hole” in clubs’ finances by the end of September when he addressed MPs in May.
It covers basic wages, taxes, bonuses, image rights, agents’ fees and other fees and expenses paid directly or indirectly to all registered players.
Promotion bonuses, cup competition success payments and severance pay will not be included.
Players under 21 are excluded from the cap calculations. Deals agreed before the vote are exempt, as is any renewal of that deal on the same terms if the player is still under 24 at that point.
There is also a relegated player exemption. Any deal agreed with a player no later than the end of the January transfer window in the season the club are relegated will be taken into account.
Clubs will be fined on a sliding scale if the breach is anywhere up to five per cent over the agreed cap. The money will then be split amongst the clubs in that league who had complied with the cap.
The club would be referred to an independent disciplinary commission, which could impose sanctions if the salary cap breach is proved.
Ahead of the EFL vote tomorrow, the PFA has sent a report to all club Chief Executives and the EFL regarding the proposed salary caps for League One and Two.
Read more here: https://t.co/mS6sBG3gcA— Professional Footballers' Association (@PFA) August 6, 2020
The British players’ union the Professional Footballers’ Association says it does not object to cost control measures being introduced to make the game more sustainable, but believes further consideration and consultation should have taken place before adopting the rules.
Julian Knight, the chair of the UK's Digital, Culture, Media and Sport (DCMS) committee which had called for a cap, welcomed the move as “common sense breaking out” and called on Championship clubs to follow suit. The move was also welcomed by Forest Green chairman Dale Vince, whose club were one of 22 in League Two to vote in favour.
Clubs have held discussions around cost control measures, including a cap, but it is understood there are no current plans for a formal vote on it.
