The Professional Footballers’ Association has launched legal action against the English Football League over new financial regulations that will tighten wage spending limits for League One clubs from the 2026-27 season.
The dispute centres on the EFL’s decision to introduce Squad Cost Rules in place of the existing Profitability and Sustainability framework. Under the revised system, League One clubs will generally be allowed to spend no more than 50% of their turnover on wages, compared with the previous 60% threshold.
Clubs relegated from the Championship will receive some additional flexibility during their first season in League One, but their permitted wage spending will fall from 75% of turnover to 65%.
The rules also widen the definition of squad costs by including manager salaries. In addition, clubs will be able to allocate only half of any owner cash injections towards wages, further limiting how additional funding can be used.
The PFA argues that the EFL did not follow the required consultation process before introducing measures that directly affect player employment conditions. The union maintains that changes of this nature require agreement through the Professional Football Negotiating and Consultative Committee, which includes representatives from the PFA, EFL, Football Association and Premier League.
The EFL rejects that interpretation and says the new framework is intended to strengthen financial discipline and improve the long-term stability of League One clubs. It has also indicated that discussions with the PFA and other stakeholders will continue despite the legal proceedings.
The dispute revives an earlier conflict over wage controls in the lower divisions. In 2021, proposed fixed salary caps of £2.5 million in League One and £1.25 million in League Two were abandoned after an independent arbitration panel backed a PFA challenge to the measures.
The latest rules have already had practical consequences. Oxford United were placed under a temporary player-registration embargo last month after failing to satisfy the new financial requirements. The club is currently unable to register new signings, including loan players and free agents, and has warned that reaching compliance could take several months.
Oxford have so far declined to comment publicly on how the PFA’s legal challenge may affect their situation.