Premier League Clubs Agree New Spending Cap

Premier League clubs have reportedly agreed in principle to implement a spending cap to close the financial gap between the top and bottom of the English top division.

Clubs will be limited to spending a multiple of the money earned from broadcast rights by the Premier League’s lowest-earning club.

According to The Athletic, “the anchoring” proposal will be limited to five times the lowest-earning Premier League team’s broadcast revenue.

Official data for last season show that Southampton, the worst team, received £104 million ($130 million) in TV money.

According to the Times, clubs are expected to be convinced that any cap will not lead them to cut their current expenditure levels.

The plan gained a minimum of 14 votes from the 20 clubs required for approval.

However, defending champions Manchester City, Manchester United, and Aston Villa have reportedly rejected the plan, while Chelsea is claimed to have abstained.

If approved at an annual general meeting in June, the new model will take over the contentious Profit and Sustainability Regulations (PSR) for the 2025-26 season.

Everton and Nottingham Forest have been punished points this season for failing to comply with PSR, which permits teams to lose only £105 million over three years.

Several other clubs are on the verge of exceeding that quota, resulting in a significant drop in expenditure during the January transfer window.

Critics of a spending cap fear it will jeopardize the Premier competition’s status as the richest and most watched competition in the world.

The Professional Footballers’ Association, a players’ organization, has also opposed “any measure that would place a ‘hard’ cap on player wages”.

Those who support the ideas, on the other hand, argue that limiting spending to maintain competitive balance is justified by increased Champions League money for the top teams and the spending power of state-backed clubs like City and Newcastle.

Premier League clubs have already agreed to implement UEFA’s new financial fair play regulations beginning in 2025/26, which require them to spend no more than 85 percent of their total revenue on wages, transfer payments, and agent fees.

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