Premier League Clubs Vote In Favor Of Spending Cap

  • Premier League clubs voted in favor of a spending cap rule for the 2025-26 season.
  • The “anchoring” proposal would limit the amount of money clubs can spend on player wages, transfer fees, and agent fees.
  • Manchester City, Manchester United, and Aston Villa voted against the spending cap proposal.

In an effort to replace the controversial Profit and Sustainability Rules (PSR), Premier League clubs have voted in favor of a spending cap rule for the 2025-26 season.

Aside from Manchester City, Manchester United, Aston Villa, and Chelsea, the rest of the Premier League voted for spending cap changes. Chelsea abstained from the vote, while the three other clubs voted against it.

Bearing in mind their high revenue, it isn’t surprising that they wouldn’t want a Premier League spending cap. The clubs that bring in the most money do not want to be limited by a strict cap on team costs.

If approved, the “anchoring” financial model would see a spending cap on wages, transfer fees, and agent fees based on a multiple of the TV revenue generated by the Premier League’s lowest-earning club.

The multiple is expected to be five times the relevant income of the lowest-earning club in the league. Last year, a 4.5 times number was floated around, as well.

Clubs Agree To Squad Cost Ratio Framework

On April 11, Premier League clubs agreed to replace the PSR with squad cost ratio rules, with a transition period in 2024-25. Under this model, teams are limited to spending 85% to 70% of their revenue on wages, transfers, and agent fees.

In line with UEFA rules, teams not in Europe would be permitted to spend 85% of their revenue. Conversely, clubs in Europe would be allowed to spend 70% of their revenue on squad costs.

However, this squad cost ratio does not solve the discrepancy between rich and poorer clubs. The clubs that earn more revenue will always be ahead based on a spending percentage.

For example, in 2023, Manchester City recorded its highest-ever revenue after winning the Champions League. The organization earned a whopping £712.8 million. Compare this to clubs like Burnley and Sheffield United, who earned significantly less.

The “anchoring” provision would prevent such a gap between the top and lower clubs — hence, Manchester City, Manchester United, and Aston Villa’s disapproval.

Everton, Nottingham Forest Receive Penalties For Breaching PSR Rules

Under the current PSR system, Everton and Nottingham Forest were docked Premier League points for violating rules. In November 2023, Everton received the largest Premier League penalty ever for breaching financial policies.

Per the PSR, clubs are allowed to lose a maximum of £105 million over three years. The Premier League commission concluded that Everton surpassed their allowed losses by £19.5 million.

The missteps were discovered in the transfer business amid Everton’s desperate attempt to avoid relegation.

This was a serious breach that requires a significant penalty.

More recently, Nottingham Forest received a four-pint deduction from the Premier League. Similar to Everton, Nottingham Forest is accused of breaching the financial rules outlined in the PSR.

The outcry over Everton and Nottingham Forest’s point deductions has been a driving force for implementing a new framework.

How Much Would Clubs Be Able To Spend?

Based on the bottom club’s current TV revenue of £103.6 million and 4.5 times anchoring multiple, the spending cap would be £466 million. Clubs have not agreed on the anchoring multiple, but it is expected to be five or 4.5 times.

However, as we discovered, Manchester City made £712.8 million in 2023. The Premier League would effectively tell Manchester City they can only spend £466 million after making considerably more revenue.

While clubs making far less welcome this amendment with open arms, high earners will feel like they are being punished for being more successful. With 16 clubs voting in favor, there is certainly demand for a new system. The financial model will be revisited at June’s annual general meeting (AGM), where an official vote could occur.

About the Author
Kyle Eve profile picture
Kyle Eve
Sports/Casino Writer
Blog and News
FaceBook Twitter
Kyle Eve is a seasoned pro of The Sports Geek. Since joining the team in 2012, Kyle, has covered some of the biggest sporting events in the world. From the Super Bowl and World Series to March Madness, the NBA Finals, Kentucky Derby, and many more, Kyle has provided reliable analysis for millions of readers. After dedicating himself to hockey and football in high school, Kyle placed his first sports bet on his 18th birthday. Since then, he has spent his entire adult life devoting himself to becoming the best sports bettor and casino gambler possible. Kyle is from Windsor, ON, Canada

Leave a Reply

Your email address will not be published. Required fields are marked *