Explained: Exactly what this week's salary cap developments mean for Sunderland & what happens next

As a result, the cap has been immediately scrapped pending further discussion amongst clubs.

It’s a bonus for Sunderland, who were strongly against the rules when they were brought in last summer.

The cap had a significant impact on their transfer business in both of the recent windows.

Immediately operating near the top of the £2.5 million cap, their interest in players such as Scott Fraser, Luke Garbutt and Armand Gnanduillet fell by the wayside.

Clubs had voted for the cap even though there was fierce opposition from a minority of clubs, but the PFA argued that they had been introduced without proper consultation.

They successfully argued that the EFL had breached the constitution of the Professional Football Negotiating and Consultative Committee (PFNCC) as a result, leading to the removal of the caps.

So what happens next, and what does it really mean for Sunderland?

We run you through what you need to know...

Does it make any immediate difference to Sunderland?

With the transfer window now shut, the removal of the salary cap will clearly make no difference in terms of Sunderland’s ambitions to get out of League One this season.

One area where they may be able to change their approach, however, is the significant number of contracts that expire this summer.

Over 20 players are set to see their current deals end and the fear that was with the salary cap in place, Sunderland were left vulnerable.

When the rules were introduced last summer, the EFL were eager to ensure clubs were not punished for contracts that had already been agreed. So as a compromise they introduced a transitional arrangement, whereby players already at clubs would see the salary counted towards the club’s overall tally as a League One average figure, rather than the full amount.

This was understood to be just in excess of £2,000 per week.

The issue for Sunderland is that any fresh contract agreed would then have to be counted in full.

So as they were already operating near the top of the cap, they could not offer new deals to players who would in all likelihood be earning well in excess of that average figure. Signing a new contract would therefore almost certainly lift Sunderland above the cap.

Lee Johnson alluded to this last month when he bluntly stated that any player wanting to earn a Championship-level contract would simply have to help get Sunderland into the Championship.

Theoretically, the removal of the cap should now mean they are free to agree new deals in the months ahead.

Whether they do so remains to be seen. Any new contract talks appear unlikely to progress significantly until Kyril Louis-Dreyfus’ takeover is confirmed, while it’s also fair to say that many decisions will be dependent on what division Sunderland are playing in next summer.

For the small cohort who have real value for the club and surely have a future in either League One or the Championship (Luke O’Nien and Denver Hume, for example), though, this is surely a good moment for the club to get to work.

What will it change in the long term?

That summer rebuild will now look significantly different if Sunderland do not win promotion this season.

Johnson had already alluded to the fact that the club would have to be ‘creative’ in the market this summer should they still be in League One, for the same reasons outlined above.

Sunderland are likely to embark on a significant overhaul of the squad and those new signings would be counting in full towards the £2.5 million cap.

The removal of the cap means that Sunderland will have significantly more financial firepower to do business if they are still in the third tier.

There are of course some major caveats here.

The COVID-19 pandemic has had a significant impact on all clubs and so it is likely to be a very different market to previous years.

Sunderland have also been clear that in their new plan for the long term, they will emphasise player development above all else.

So young players will still be key, and though there are ambitious plans for the development of the club under Louis-Dreyfus, major spending on fees and wages appears unlikely.

Nevertheless, Johnson has said they will invest in potential long-term assets and the removal of the cap will make that process much easier.

So what are the rules Sunderland actually being governed by right now and will any new rules be introduced?

The removal of the cap means that the EFL have reverted to the Salary Cost Management Protocols for League One clubs.

Under these rules, clubs can only spend 60% of their turnover on wages.

However, owners can support that turnover by injecting funds as long as they do so as equity, rather than loans.

The sanction for breaking these rules is a transfer embargo.

The rules clearly favour clubs like Sunderland who can generate a significant turnover through their fanbase.

Some future controls seem inevitable, though.

The EFL are set to discuss the matter with clubs later this week and even though they have had the cap struck down, the PFA have said they are happy to support the EFL and clubs in coming to an agreement on ‘reasonable’ cost controls.

So it’s a story with plenty of chapters left as there remains a strong appetite for controls of some sort, but a hard and fast cap now looks very difficult for the EFL to impose again.

What rules would apply if Sunderland were to win promotion?

Championship clubs are limited to a maximum loss of £13 million per season under FFP, calculated as an average over a three-season period.

Clubs discussed the possibility of introducing an £18 million salary cap earlier this season but it was comprehensively rejected for the time being.

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