PFA takes legal action against EFL over League One salary cap changes
The players' union has started legal proceedings against the English Football League over new spending limits in League One — the third tier of English football — setting up a fresh fight over how much clubs can pay their squads.
In May, the EFL announced that Squad Cost Rules would replace the existing financial framework — known as Profitability and Sustainability rules, a system that tracked clubs' losses over time — from the 2026-27 season. Under the new League One rules, clubs can spend no more than 50% of their turnover on wages, down from 60%. Teams relegated from the Championship (the tier above) get a slightly higher ceiling of 65% in their first season in the third tier, itself down from 75%. Manager pay has also been folded into the framework for the first time, and clubs are restricted to spending no more than 50% of cash injections from owners on wages (BBC Sport).
The Professional Footballers' Association — the PFA, the union representing professional players in England and Wales — argues that the league cannot push through these changes without full agreement through the Professional Football Negotiating and Consultative Committee, a joint body where the PFA, leagues and other football authorities discuss player terms (BBC Sport).
The EFL disagrees. In a statement on Tuesday, the league said it was "concerned and disappointed" by the legal challenge and did not consider the new rules to be a major change affecting players' terms and conditions of employment (EFL). The EFL said it did not accept that the PFA's position was correct.
This is not the first time the two bodies have clashed over salary limits. A previous plan for salary caps in League One and League Two was withdrawn in 2021 after an independent arbitration panel upheld the PFA's claim that the proposals were unlawful and unenforceable. Under those withdrawn plans, third-tier clubs would have faced a £2.5m ceiling on salaries and fourth-tier sides £1.25m (BBC Sport). The EFL itself confirmed at the time that the panel had upheld the PFA's claim (EFL, February 2021).
More recently, in November 2025, League One clubs proposed a £4.7m salary cap paired with a luxury tax — a penalty payment for clubs that overspend. The EFL said it would oppose that idea (The Guardian).
The history matters here. Back in 2020, the PFA publicly pushed back against EFL salary cap proposals that could have limited Championship clubs' wage bills to around £18m a year (PFA, June 2020). The union's argument then, as now, centred on the principle that any cap on what clubs can pay players is a fundamental change to employment terms — one that requires negotiation, not imposition.
For fans, the stakes are straightforward even if the legal arguments are not. Lower spending ceilings are designed to keep clubs solvent and prevent the kind of financial collapses that have sent historic teams into administration. But tighter limits also mean less room to compete on wages, which can make it harder for smaller clubs to attract or keep the players who win promotions. The tension between financial survival and sporting ambition is as old as the leagues themselves.
Neither side has indicated a timeline for resolution. The 2026-27 season — the first under the new rules — is still nearly a year away.
