Leeds United spending restriction proposal adopted as Premier League set to trial new financial rule — YEP 6/6/24

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By Joe Donnohue

The Premier League has agreed to trial a new financial system next season closer to a UEFA-style model whereby clubs are permitted to spend a proportion of their revenue on transfers, wages and agent fees, in conjunction with existing Profitability and Sustainability Rules (PSR).

It follows club chiefs' summit with the league at their Annual General Meeting (AGM) in Harrogate on Thursday, June 6 in an attempt to avoid sporting sanctions akin to those handed down to Everton and Nottingham Forest during 2023/24.

"The existing Profitability and Sustainability Rules will remain in place, but clubs will trial Squad Cost Rules (SCR) and Top to Bottom Anchoring Rules (TBA) in shadow," a Premier League statement read.

"The overall system aims to improve and preserve clubs’ financial sustainability and the competitive balance of the Premier League.

"SCR will regulate on-pitch spend to a proportion (85%) of a club’s football revenue and net profit/loss on player sales. TBA is a League-level anchor linked to football costs, based on a multiple of the forecast lowest central distribution for that season."

The new approach is seen as a 'pre-emptive' move in the interest of preserving financial sustainability among English football's elite.

Leeds United, meanwhile, are expected to join five other Championship teams at Friday's EFL AGM in proposing new spending rules also tied to clubs' revenues, as opposed to the one-size-fits-all financial arrangement currently used, in which clubs are permitted to lose a set amount over a three-year accounting period.

In the Premier League, Aston Villa's proposal to increase the loss-making cap from £105 million to £135 million over three seasons was rejected at Thursday's AGM.

A Telegraph report earlier this week revealed Leeds' alleged support for the loosening of financial controls in the EFL, which follows the UEFA-style model permitting clubs to spend 70 per cent of their revenue on wages, transfers and agent fees.

The Whites are one of the Championship's highest earners from commercial revenue and sponsorship and in theory would have a competitive advantage over their second tier peers should allowed expenditure on players be linked more closely to how much money a club brings in.

A number of clubs in England's top flight and division below are said to be close to their Profitability and Sustainability ceiling as teams seek to amend financial rules to better suit their long-term sporting and sustainability ambitions. Two-thirds of Championship clubs must agree on the motion to loosen financial controls at Friday's AGM in order to trigger a vote.

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