Sport

Premier League agrees new spending cap after ‘majority of clubs’ vote in favour

It wasn't a unanimous decision.

Danny Jones - 29th April 2024

The Premier League has reached an agreement in principle on a new spending cap for all teams as the English top flight looks to replace the current Profitability and Sustainability Rules (PSR).

Set to be installed from the 2025/26 season onwards once fully ratified, revised spending limits will placed on teams in the first division, the number for which will be calculated in relation to a multiple of the money earned in prize money and TV rights by the lowest-earning club in the Premier League.

If approved at the AGM (annual general meeting) this June, the new model will replace the existing PSR system under which multiple clubs have broken FFP and been charged with other breaches over recent years, with Everton and Nottingham Forest having already been deducted points this season.

Although 16 of the 20 Premier League clubs reportedly agreed to the newly proposed regulations, four clubs were not in favour, with Manchester City, Man United and Aston Villa all said to have voted against the decision, while Chelsea chose to abstain.

BREAKING: Premier League clubs have agreed in principle to a form of cap on squad spending ahead of regulations being formulated, Sky News understands.

Sports correspondent @RobHarris reports. https://t.co/Z8JzX2tl18

📺 Sky 501 pic.twitter.com/AwxJe2SE9O
— Sky News (@SkyNews) April 29, 2024

The proposed spending cap wouldn’t come into effect until the 2025/26 Premier League season.

The new max-spending model is being referred to as ‘anchoring’ or ‘tethering’, which will take into account total amounts spent on buying players, weekly wages, agents’ fees and more.

If successful following a final vote in June and brought through the season after next, the aim is to curb the increasing financial gap between the top and bottom of the table by preventing things like big sponsorships which may otherwise see clubs assert massive spending power during transfer windows.

According to the Independent, cost controls will now “limit club expenditure on salaries, signing and fees to 85 per cent of total revenue” for those not competing in European competitions.

This comes after Premier League teams previously the latest UEFA rules that will see those playing in the likes of the Champions, Europa and Conference League only allowed to spend 70% of that revenue, given the added financial uplift from qualifying for these tournaments.

While 16 yeas were enough to see the initial vote move forward, it will only require 14 out of 20 clubs to agree to the rule change in June for the motion to be fully passed.

A Professional Footballers’ Association (PFA) spokesperson said: “We will obviously wait to see further details of these specific proposals, but we have always been clear that we would oppose any measure that would place a ‘hard’ cap on player wages.

“There is an established process in place to ensure that proposals like this, which would directly impact our members, have to be properly consulted on.”

It will be interesting to see how these new rules will factor into the wider decision-making regarding Man City, with 115 breaches of UEFA’s FFP regulations still looming over the City Football Group.