The English Football League (EFL) confirmed on Friday, May 15, 2026, that new financial regulations will be introduced across the Sky Bet Championship, League One, and League Two.
Sky Bet Championship
Championship clubs have agreed to replace the current Profitability and Sustainability (P&S) regulations with a new Squad Cost Rules (SCR) system from the 2026/27 season onwards.
Throughout the 2025/26 campaign, clubs operated the SCR model alongside existing P&S rules on a trial basis, allowing teams and the league to evaluate the framework and gather feedback before full implementation.
Under the new SCR model, clubs will be restricted to spending 85% of their revenue on player and manager-related expenses, including transfer fees. Owners will also be allowed to contribute additional funding through a flexible equity allowance worth up to £33 million across three years, capped at £15 million per season.
The EFL says the updated framework will provide clubs with clearer financial oversight through real-time monitoring during the season, rather than reviewing finances retrospectively. Measures have also been introduced to monitor commercial agreements linked to club owners or associated parties.
The changes are designed to simplify financial regulations and improve sustainability across the Championship. The Premier League is also expected to introduce a similar SCR-based model from the 2026/27 season, creating greater alignment between divisions.
Sky Bet League One and League Two
League One clubs have also approved major amendments to the Salary Cost Management Protocol (SCMP), aimed at cutting financial losses and reducing dependency on owner funding.
The new rules lower the percentage of club turnover that can be spent on wages from 60% to 50%, while managerial salaries will now be included in the calculation. Clubs relegated from the Championship will be permitted to spend up to 65% of turnover on wages in their first League One season, down from the previous 75% limit.
In addition, League One clubs voted to remove the staggered system for equity injections. Going forward, only 50% of any owner investment can be used towards wage spending. For example, a £500,000 owner injection would allow only £250,000 to count towards the wage budget, encouraging clubs to direct more funding into infrastructure and youth development instead.
The EFL believes the updated regulations will strengthen financial control and support long-term sustainability within the division.
Meanwhile, League Two clubs rejected a proposal that would have introduced the same equity injection model used in League One.
