Premier League clubs have voted in principle to introduce a spending cap in an effort to curb escalating transfer fees and wages across the competition.
After exploring a number of methods to limit spending among its 20 teams, the issue was debated in a Premier League meeting today, with an agreement reached in principle that will anchor spending to the television earnings of the bottom club.
After 16 clubs voted in favour of the measures, a final vote on the specific details will take place at the Premier League’s annual general meeting in June ahead of the planned introduction for the 2025/26 season.
Manchester City voted against the spending cap (Image credit: Getty Images)
The purpose of a salary cap is to align spending to revenue, which would, in theory, make the Premier League more competitively balanced.
Opposition to the plans came from the bigger clubs that feared their ability to compete in Europe would undermined by the limits.
The Premier League also looked at the method which UEFA advocate that sees clubs limited to spending 70 per cent of their turnover on wages before opting for the cap that ‘anchors’ spending to a multiple of the lowest club’s broadcast income.
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If, for example, the multiple was five times, and a bottom-placed club earned £100million, clubs will be able to spend £500million on transfer fees and wages. The size of the cap will be decided before the final vote in June.
Chelsea abstained from the voting (Image credit: Getty Images)
The move comes after the Premier League failed in their effort to reach a ‘New Deal’ for funding with the EFL, with the top flight now wanting to set their own financial rules.
Today’s vote also comes amid the backdrop of the creation of an independent football regulator, with the government’s Football Governance Bill currently being read in Parliament.
Among the regulator’s potential remit would be improving the financial sustainability and resilience of clubs throughout the game.
This season has seen Everton and Nottingham Forest both deducted points for Profit and Sustainability limit breaches, with this new cap set to replace the current set of regulations.
