League One salary cap of £2.5m proposed

Salary caps of £2.5 million for League One and £1.25 million for League Two has been reportedly proposed by the EFL.

The Telegraph are reporting that automatic points deductions will be put in place for clubs who fail to pay their players on time. The caps would represent significant cuts at a number of clubs.

Telegraph Sport also reported that clubs in Leagues One and Two are being asked to vote on reducing squad sizes – with just 20 senior players (those aged over 21) per squad. Within the 20 man squad at least eight have to be home-grown players.

All clubs would have a season’s grace in which to comply with the new measures, while clubs relegated from the Championship would also be allowed a transition period given the range in player earnings and income between the Championship and League One.

Any decisions will have to go to a vote and would need a 75 per cent majority to be put into place.

Last week, we reported that salary caps were due to be proposed on Monday by the EFL in a bid to tackle future financial situations at clubs.

EFL chairman Rick Parry believes that the Football League are looking at a potential financial hole of up to £200 million by the end of September due to the coronavirus pandemic and the impact it has had within the game.

Parry believes his 71 member clubs must consider a salary cap if they are to escape from the current imbalance between wages and income that threatens to ruin many of them.

Parry told the Digital, Culture, Media and Sport committee last week that a salary cap and other cost control measures were “absolutely essential”.

“There is a lot of debate going on about that at the moment,” he said.

“We have an imbalance in the distribution, we have the parachute payments which cause immense stress within the Championship so yes I do think the distribution model is a problem.

“Any model where wages are 106 per cent of turnover is ridiculous.”

At Ipswich, previous figures showing that wages accounted for 108 per cent of the club’s turnover, 2 per cent higher than the figure quoted to be ‘ridiculous’ by EFL chairman Rick Parry.

Although that figure was when the club were operating in the Championship and will be significantly lower this term, with Town’s wage bill understood to be around the £5 – 8 million mark.

To put some context into Parry’s view, Reading, who currently sit 14th in the Championship, are understood to have had a wage-to-turnover ratio of a staggering 226 per cent.

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