EFL Expresses Concern and Disappointment Over PFA Legal Challenge to League One Cost Controls
Key Takeaways
- •The PFA has initiated legal proceedings to block the EFL's Squad Cost Management Protocol for League One clubs, contending it could reduce players' earning potential.
- •League One clubs averaged £7.3 million in losses last season with £8.3 million in owner funding, both figures having more than trebled since 2021-22.
- •The proposed protocol would complete structured cost oversight across all three EFL divisions, as League Two and the Championship already operate under similar financial rules.
- •The PFA successfully overturned a comparable EFL cost-control measure in 2021 after a court found it functioned as a de facto salary cap.
- •The Independent Football Regulator, operational since 2025, has the authority to impose financial solutions on the leagues if voluntary agreements are not reached.
The English Football League (EFL) has criticised the Professional Footballers' Association (PFA) for launching legal action aimed at blocking new cost-control measures for League One clubs.
The PFA is opposing the Squad Cost Management Protocol, arguing that it could harm players' earning potential. The union previously succeeded in overturning a similar rule change in 2021, when it was judged to constitute a de facto salary cap.
The EFL, which governs the three professional divisions below the Premier League, said it was "concerned and disappointed at the position adopted by the PFA," noting that clubs had voted in favour of the new regulations earlier this summer.
"Financial sustainability and player protection are not competing objectives — they go hand in hand. Put simply, these reforms are designed to make clubs more sustainable," said EFL chief executive Trevor Birch.
"Stable clubs are better placed to honour contracts, pay wages on time, invest in facilities and create long-term opportunities for players. But a rising tide of losses and growing reliance on owner funding increase risk for everyone."
"That is why delaying reform is a risk. Clubs need rules that help them plan responsibly and avoid spending beyond their means. With the Independent Football Regulator now operational, the game needs to show it can take credible action on sustainability itself, rather than wait for solutions to be imposed externally."
The Independent Football Regulator, which became operational in 2025 following legislation rooted in the 2021 fan-led review of football governance chaired by former Sports Minister Tracey Crouch, was established in response to persistent financial instability across the English football pyramid. Its creation followed high-profile club failures, including the expulsion of Bury FC from the EFL in 2019.
League One Losses Treble in Five Years
The EFL highlighted mounting concern over escalating financial losses in the third tier. Last season, League One clubs averaged a loss of £7.3 million, with owner funding reaching £8.3 million. Both figures have more than trebled since the 2021-22 season.
"League One and League Two clubs operate in a very different financial environment from clubs in the Championship and Premier League," said Birch.
"The rules need to reflect that reality. These reforms are about helping clubs compete responsibly, plan properly and remain sustainable for the communities they represent."
League Two already operates under a similar squad cost regime, while the Championship is subject to its own financial fair play rules. The proposed League One protocol would extend structured cost oversight across all three EFL divisions, though the PFA's legal challenge could delay implementation.
The dispute unfolds as the EFL considers a new financial redistribution deal proposed by the Premier League. The newly established Independent Football Regulator has the authority to intervene and impose a solution to the long-running funding dispute if no agreement is reached between the leagues.
