An EFL salary cap would widen the gap to the Premier League but is the right thing to do

“We will be therefore refining in conjunction with the Premier League our own profit and sustainability rules, which don’t work in the Championship because clearly clubs are neither profitable nor sustainable,” says EFL chairman Rick Parry.

You can’t fault Parry’s bluntness, nor his accuracy. For all the moralising over rising Premier League wages, it is in the Championship that they have truly spiralled beyond control.

In the last full year of financial reports, the average ratio of wages to revenue in the division was 107 per cent. Financial experts suggest anything over 90 per cent is unsustainable in case of unforeseen problems. Like a global pandemic that decimates matchday revenue.

Very simply, the difference between the Premier League and Championship is less about the salary gap and more about the broadcasting revenue gap. The financial benefits of Premier League participation, and thus the widening chasm, promotes desperation. When Brentford got promoted, they spent £270 on wages for every £100 earned.

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Parry is insistent that a judgement day is coming, most likely in the form of a salary cap. This can take one of two forms: a limit on spending or a limit on the percentage of revenue you can spend. And both have their limitations. Early last year, an attempt to implement a set value salary cap was voted down by half (and roughly speaking the largest) clubs who felt it unfair given they had greater revenues than the lesser sides.

But a wages-revenue ratio cap risks the opposite issue. It would potentially reinforce the gap between the highest and lowest revenues in the Championship, perpetuating financial imbalance. If one club is allowed to spend 70 per cent of £40m revenue on wages and another club can spend 70 per cent of £10m, who is likely to be the more successful? Competition becomes ringfenced.

Parry’s task is to find a middle ground, a solution that enough clubs are prepared to vote for, promotes financial sustainability and yet does not disallow promoted EFL clubs from Premier League consolidation.

There are tools or strategies at his disposal – pleading for greater distribution of wealth from the Premier League and an overhaul of the parachute payment system are two – but it is a mighty difficult mission.

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To be pessimistic, the salary cap is effectively a choice between a widening competitive gap between the Premier League and Championship and multiple Championship clubs risking financial implosion.

If that judgement day is coming, every stakeholder must play their part in a world where self-interest typically runs free. As well as voting for change, clubs must accede to it – no revenue inflation, no creative accounting loopholes. Players will have to accept that pay cuts are inevitable for those outside the top flight. Governing bodies must feel empowered to punish rule-breakers efficiently and fully according to the law’s letter. Supporters must learn to edge away from transfer culture’s temptations and trappings.

Good can come of this, eventually. Good must come. If the future feels austeric, that should not promote bleakness but hope. More important than who your club signs or which division it plays in is that it exists at all – now, tomorrow, always. Without regulation, the Championship is a ticking timebomb. Without wealth distribution, the Premier League will become its own Super League. It is high time for both.

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