Sheffield Wednesday and League One rivals face new spending rules as EFL clubs vote on financial shake-up

Sheffield Wednesday and their League One counterparts are set to vote on an English Football League rule change that could alter their spending power.

Clubs right across the EFL are going to vote on Friday on significant changes to their financial regulations that could widen the gap in spending power between the Championship and League One.

Wednesday, of course, are gearing up for life back in the third tier of English football after being relegated from the Championship this season. The club secured just two league wins all season after a myriad of off-field issues saw them plunged into administration last October.

Fortunately, Wednesday have now been saved by US consortium Arise Capital Partners, and everyone associated with the club is now looking forward to a brighter future. Arise have vowed to invest in infrastructure and rebuild the squad to ensure the Owls have a competitive edge to themselves next term.

The specifics of the recruitment restrictions Wednesday may be operating under this term are yet to be determined, but they will be able to bring players in amid their quest to get back on their feet and put the events of the last 12 months behind them.

On Friday, the Owls and their League One counterparts will vote on whether their spending power will have greater alignment with clubs in League Two. Currently, League One clubs’ permitted spending under the salary cost management protocol (SCMP) stands at 60 per cent of turnover.

However, clubs are voting on whether to reduce it to 50 per cent of turnover - the limit it is currently set at for clubs in League Two. At least 16 of the 24 clubs in each division must vote in favour of the proposed changes for them to be introduced.

It has been reported by The Guardian that a number of League One owners wanted to go further by introducing a salary cap underpinned by a so-called luxury tax for clubs breaching it, but those proposals will not be put to a vote.

A reduction in the SCMP limit is seen as a compromise, with clubs in the division largely in agreement over the need to reduce costs.

Following a commitment made by League One and Two Clubs in the summer of 2024 to support proactive measures to stem financial losses, representatives from the two divisions, in December that same year, agreed amendments to SCMP rules.

SCMP is the Financial Fair Play framework in place for Clubs in Leagues One and Two and sets out the percentage of a club’s turnover that can be spent on player-related expenditure.

The average investment by owners of League One clubs this season was £9.6million, up from £2.6m four years ago, and many owners are reluctant to continue bankrolling such losses.