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Sunderland handed boost as salary cap rules are scrapped following legal challenge

The EFL's salary cap rules have been overturned after a challenge from the Professional Footballers' Association.

Tuesday, 9th February 2021, 2:50 pm

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The rules were introduced last summer and limited Sunderland and their League One rivals to an annual wage spend of £2.5 million.

The Black Cats were firmly against the measure, which affected their transfer business both last summer and in the recent January window.

The PFA challenged the rules, arguing that the EFL had failed in their remit to consult properly with the Professional Football Negotiating and Consultative Committee when introducing the cap.

The salary cap rules governing League One have been overturned after a legal challenge

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As a result of the successful challenge, League One clubs will revert to the Salary Cost Management Protocols for the time being.

Those rules say that a club can only spend 60% of its turnover on wages.

Owners can inject equity to support turnover under these rules.

The debate over financial controls in the division is set to continue, with the EFL confirming that clubs will discuss the matter at a series of meetings later this week.

An EFL statement reads: "An independent arbitration panel has upheld a claim from the Professional Footballers’ Association (PFA) that the EFL was in breach of the constitution of the Professional Football Negotiating and Consultative Committee (PFNCC) by introducing ‘Squad Salary Caps’.

"In August 2020 following an extensive and comprehensive consultation process with EFL Clubs, Leagues One and Two voted to adopt new financial controls that replaced the previous Salary Cost Management Protocols (SCMP).

"The PFA argued that the PFNCC’s remit to consider matters relating to the employment of, and any associated rules and regulations to professional players employed by EFL Clubs, was not properly considered as part of the process to introduce the new rules and as a result served a notice of claim to that effect.

"The EFL and PFA then agreed to refer that matter to arbitration and after hearing submissions from both parties, an independent panel concluded that the EFL was in breach of its agreement as a member of the PFNCC.

"At the time of the adoption of the Salary Cap Rules, the EFL included a provision to ensure that any decision such as this would have the effect of reinstating the SCMP rules that were in operation during season 2019/20, which links player related expenditure to turnover.

"The EFL will now discuss the matter of financial controls and implications linked to this outcome at a series of meetings with its Member Clubs later this week."

The PFA said it would work with the EFL to agree 'reasonable and proportionate' cost control measures for the future.

A statement reads: "The PFA welcomes the fact that the salary cap rules are automatically withdrawn and hopes to open constructive dialogue to agree reasonable and proportionate cost control measures for the future.

"Like everyone involved in football, the PFA wants to see sustainable clubs at all levels. We also recognise the huge economic pressure that clubs have come under due to the COVID-19 crisis.

"The PFA believes it is now in the best interest of the leagues, the clubs, and the players to work together and agree on rules that promote financial stability."

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