EFL says losses not sustainable after PFA legal action

What the report says

The English Football League has warned that the current level of club losses is creating a “systemic insolvency risk” across the football pyramid, as it responded to legal action from the Professional Footballers’ Association over planned changes to financial controls. In an open letter, EFL chief executive Trevor Birch said the game’s finances were not sustainable and argued that doing nothing would leave clubs exposed to continuing losses.

The dispute centres on the EFL’s new Squad Cost Rules, due to replace the existing Profitability and Sustainability framework from the 2026-27 season. One change would reduce the share of turnover League One clubs can spend on wages from 60% to 50%. The PFA says the league cannot introduce the rules without full agreement from the professional football negotiating body, and it has raised concerns that the measures could restrict wages and squad spending.

Birch said the rules were intended as guardrails rather than limits on ambition, and he linked financial stability to player protection and long-term club security. He also pointed to rising expenditure and losses in League One, as well as heavier average losses in the Championship. His comments come amid broader concern in English football about clubs relying on owner funding and the risk of financial collapse.

BBC Sport’s report also notes that previous plans for salary caps in League One and League Two were abandoned in 2021 after legal objections from the PFA. Birch said a fairer distribution of money from the Premier League would remain important to the EFL’s finances.