Salary Caps Have Worked Everywhere... So Why Are The EFL Afraid To Say Yes?

Salary Caps Have Worked Everywhere... So Why Are The EFL Afraid To Say Yes?

It has come to light this week that the EFL board is reluctant to agree any salary caps, which many teams have campaigned for. The idea first came about four years ago after the pandemic when some teams had faced serious financial difficulties due to the lack of ticket and merchandise sales.

League One and Two the Most Affected?

Accoring to the Guardian the EFL board were considering a £4.7m salary cap with a tax on teams that exceeded the limit. Out of the 24 clubs in League One, 18 wrote to the board to express their concerns over the damage they are suffering financially as a result of their rising wage bills.

Two main advocates for the change were Reading and Peterborough, who requested that a 100% tax would have to be paid for teams that exceeded the spending cap and then evenly paid out to the other clubs in the league. The average loss for a team in league one last season was £5.2M.

The EFL is to oppose proposals from League One clubs to introduce a £4.7m salary cap and a luxury tax for clubs that overspend.

Eighteen League One clubs wrote to the EFL, led by Peterborough and Reading.

[@MattHughesMedia] #readingfc pic.twitter.com/dedaNVyrTc

— RFC Latest (@RFCLatest) November 15, 2025

On Thursday the EFL Board held a meeting in response to the letters they had recieved by the clubs. They concluded that they wouldn't agree to the change, but would rather look at ways to support clubs aside from only owners funding. Four years ago the salary cap change was almost agreed, and in fact the EFL board were happy with the clubs proposals, but it was rejected by the Professional Footballers' Association.

Whilst it looks like the current proposal put forward is a no go, the EFL are seeking other ways to combat the salary concerns. Currently League One clubs can spend 60% of their turnover on new players, with it dropping down to 50% for League Two.

An Unfair Advantage

With the rules as they are it significantly favours the wealthier teams. Take Luton for example, they are the most wealthy team in league one and have the highest wage bill at £340k per week. Compare that to Exeter who have the lowest wage bill at just under £77k per week.

By including the cap, Luton would be more restricted as to who they could sign, which would in turn level the playing field. It would still not tarnish the image of Luton, with the club being a former Premier League side with many players still favouring a move there, but it would help support those clubs who are struggling to pay their players anywhere near the amount of the teams that they are competing against.

Reading rank 10th in the divison for the most expensive wage bill and the Royals were one of the main clubs that wanted the change. That could be for a number of reasons. This goes back to when they were relegated in 2022/23 from the Championship, with their finanical accounts revealing the club had lost over £20M as a result.

It was over these accounts that Reading were placed under a transfer embargo after not submitting them on time. In addition they got a one point deduction in their first season back in League One for not paying their players wage bills on time during the relegation season.

BREAKING: Reading FC have been handed a one-point deduction, with a further three points suspended, after failing to pay players' wages on time and in full 🔵👑 pic.twitter.com/AUEC571uvL

— Sky Sports News (@SkySportsNews) August 16, 2023

Whilst the embargo has since been lifted, it would be understandable that they are still feeling the effects of the loss that they made that season. Performances this season can also support this claim, with the club desperate to return to the Championship where they feel that they belong.