EFL looking at salary cap plan for League One and League Two

Rotherham United could face a salary cap next season if they are not promoted from League One.

Third-tier sides would be given a £2.5m ceiling for salaries, while the sum would be down to as little as £1.25m for teams in League Two, according to a report in the Daily Telegraph.

The plan would also see clubs given automatic points deductions if players are not paid on time.

As it stands, the Salary Cost Management Protocol (SCMP) limits what League One and League Two clubs can spend on wages in relation to turnover.

Player wage costs are broadly restricted to 60 per cent of income in League One and 50 per cent in League Two.

EFL chairman Rick Parry recently spoke about the need for some form of cap on players’ wages as being “essential” to football’s recovery from the coronavirus crisis.

Parry, who has publicly spoken about EFL clubs looking to fill a £200m financial hole by the end of September following the suspension of football due to Covid-19, said: “I think salary caps and cost control are absolutely essential.

“There’s a lot of debate going on about that at the moment. We have the imbalance of distribution, the parachute payments [from the Premier League] that cause great stress within the Championship, so I do think the distribution model is a problem and any model where wages are 106 per cent of turnover is ridiculous.”

Meanwhile, clubs would be given a vote on the introduction of maximum 20-man squads.

If approved, it would mean only 20 senior professionals at each club, with eight homegrown players – those produced from the club’s academy system – within that group.

Forest Green chairman Dale Vince is among those who have expressed their support for the introduction of a cap.

But his call for fixed amounts of £3.6million spent on player wages for League One clubs and £2m for teams in League Two is a figure which is significantly higher than the EFL proposals.

He said: “We can all see the problems every year, there are a couple of clubs that just about make it to the end of the season – or don’t – and go into administration.

“A player wage cap would be a way to control that. The amount of money that gets spent by some clubs would then relieve the pressure on other clubs to match it – it becomes an arms race.”