Premier League clubs to vote on spending cap tied to income of lowest earning club — The Athletic 24/4/24
By Matt Slater
The Premier League is heading towards another contentious
vote on Monday with a majority of clubs keen to add a hard spending cap to the
new “squad cost” rules that are being introduced for the 2025-26 season.
Based on the concept of “anchoring”, the de facto salary cap
would limit the amount of money any club can invest in their squads by tying it
to a multiple of what the lowest earners get from the league’s centralised
broadcast and commercial deals.
Earlier this month, the clubs unanimously backed a proposal
to progress talks on the squad cost regime, with a view to finalising the new
rules at June’s annual general meeting. Since then, the league has sent out
proposals on anchoring and scheduled a meeting on the matter for Thursday.
The plan is then to ask the clubs to back the idea in
principle at another meeting of the league’s shareholders — the 20 clubs and
the Football Association — on Monday.
When the idea was first suggested last year, the
top-to-bottom multiple its backers had in mind was 4.5 but, with several clubs
strongly opposed to the cap, the league is now suggesting a looser multiple of
five.
The hope is that the cap will operate as a backstop to the
more fluid squad cost rule, which ties the amount clubs can spend to their own
revenues, and raising the multiple should placate the idea’s biggest critics.
However, Chelsea, Manchester City and Manchester United have
already expressed their concerns about the idea, pointing out it is potentially
a breach of UK competition law.
What will it look like?
If anchoring was in effect last season, the cap would have
been £518million, five times the £103.6m that Southampton, who finished 20th,
earned in centralised revenues, with Chelsea spending more than that on wages,
amortised transfer fees and payments to agents, with Manchester City not far
behind.
Unsurprisingly, the idea is far more popular with clubs
further down the revenue table. They see it as a way to stop the league’s
biggest earners from being able to outspend them at an ever-expanding rate.
Without it, they fear the league’s already fragile competitive balance would be
further eroded.
The move could be viewed as a boost for other leagues
looking to close the gap on the Premier League, although rivals such as La Liga
in Spain already employ their own bespoke spending cap regime.
This model though is the first tying a club’s spending to
another club’s revenue with other iterations of financial fair play (FFP) rules
based on a club’s own revenue.
Who will be against it?
The debate on anchoring will not just be a replay of the
haves versus have-lesses rows that have dogged football for years, as it must
also involve the group of stakeholders perhaps most affected by the proposal:
the players.
Any move to set a ceiling on how much money an employer can
pay their employees — particularly one not based on that employer’s ability or
desire to pay their own staff — is always going to attract the interest of the
Professional Footballers’ Association (PFA), the players’ trade union.
For example, when the English Football League tried to apply
a soft salary cap in the Championship at the start of the pandemic, the PFA
successfully blocked it.
However, that was because the EFL had failed to properly
consult with the union before proposing the cap. For anchoring — or the squad
cost rule, for that matter — to have any chance of being introduced, the league
knows it must be approved by the Professional Football Negotiating and
Consultative Committee, the body that brings the union, the EFL, FA and Premier
League together to discuss matters relating to the employment of players.
All that is for the future, though, as the first hurdle that
anchoring must clear is finding sufficient support within the Premier League,
where a two-thirds (14-6) majority of the clubs is needed to change the
rulebook.
The recent rows over the league’s financial distribution
offer to the rest of the pyramid and its rules on associated-party transactions
have shown how hard it can be to clear that hurdle, with the 20 clubs less
united on a whole range of issues than at any time in the last 30 years.