EFL confirm changes impacting Sheffield United, Sheffield Wednesday, Huddersfield Town, Barnsley FC & more
EFL confirm financial framework changes impacting likes of Sheffield United, Sheffield Wednesday and Barnsley
Championship and League One clubs have approved changes to their respective financial regulation models.
Clubs in the second tier have approved a new Squad Cost Rules (SCR) framework that will take the place of the current Profitability and Sustainability (P&S) system next season.
League One clubs, meanwhile, have approved changes to the existing Salary Cost Management Protocol (SCMP) rules with the aim of reducing losses and reliance on owner funding in the division.
Clubs in League Two, however, did not pass a proposed change which would have seen the division mirror the League One approach to equity injections.
Here are the key details as the footballing pyramid prepares for changes.
Championship approve SCR
An SCR system in shadow has been operating alongside P&S for the last year, allowing for a deeper understanding of the proposed changes.
SCR will limit spending on player and manager-related costs to a set percentage of their income, alongside a limited level of owner funding.
The SCR allowance for clubs will be set at 85 per cent of income, with a flexible equity top-up allowance of £33m over a three-year period, up to a maximum of £15m per season). It has been introduced with the intention of the league being able to monitor clubs in real time rather than ‘after the event’.
A version of the SCR framework will also to be introduced in the Premier League for the 2026/27 season, bringing closer alignment between the divisions.
Next season’s Championship will feature Sheffield United, as well as Middlesbrough unless they are given a play-off reprieve. Hull City will compete in the divison if they lose in the play-off final.
League One clubs approve change
In the third tier, the percentage of turnover clubs in League One will be able to spend on wages has been reduced from 60 per cent to 50 per cent, with manager costs to now also be included within the SCMP Calculation.
The staggered approach to equity injections has been removed, meaning all equity injections will be included within the calculation at 50 per cent.
For example, if an owner pumps £500m into their club, a maxmimum of £250,000 in addition what is already permitted as a percentage of turnover can be spent on wages. It is hoped clubs will be encouraged to invest into other areas, such as youth development and infrastructure.
Clubs relegated from the Championship will be permitted to spend 65 per cent of turnover on wages during their first season in League One, reduced from 75 per cent.
Barnsley are among the clubs to have publicly welcomed the changes made and CEO Jon Flatman said: “We welcome the move from the clubs in League One to take clear and obvious steps towards financial sustainability.
“Delivering a league wide collaborative solution is essential and this will allow clubs to ensure they remain competitive on the field and financially stable off the field.
“The reliance on increasing owner funding has been highlighted by the Independent Football Regulator as a risk for the game to address; the detail of which I outlined in late March to fans. A focus upon growing the financial stability of clubs will result in being able to ultimately invest more in facilities, academies, infrastructures, and their playing squads.”
Barnsley will be competing in League One alongside the likes of Huddersfield Town and Doncaster Rovers next term.