A player transfer percentage cap has been agreed upon by Premier League clubs as part of new changes to Profit & Sustainability Rules (PSR).
The proposed changes to player transfer, agent and wage fees will be capped at 70% for all Premier League clubs competing in European competition. An 85% cap will be placed on the rest of clubs not competing in European competitions.
The percentage caps are to club revenue and it is believed have been introduced by the league to not hamper club’s desire to spend and challenge for higher positions.
If the Premier League progresses with PSR changes, which are still ongoing, then the new requirements could be introduced for the 2025/26 season at the earliest.
Percentage caps to player transfers are at the centre of PSR changes, with the league indicating that it hopes to finalise all proposals in time for the Premier League AGM in June.
Another proposal relating to revenue as part of PSR rule changes is the potential introduction of a luxury tax, that would likely go hand-in-hand with the transfer cap.
It was revealed two weeks ago that Premier League officials are considering a luxury tax – much in line with the NBA and NFL – if teams break the three-year £105m threshold for losses.
Under the Premier League’s luxury tax, the money collected from any teams who go over into the luxury tax, will be distributed to the rest of the clubs remaining under the £105m threshold, or even be distributed to the clubs in the English Football League (EFL) deemed to be in financial trouble.
PSR has received major criticism for being too stringent after Everton was docked an immediate eight point deduction this season over two offences of breaching PSR, placing the team in a relegation battle which, if relegated, could place it in further financial trouble.
Nottingham Forest has also received a points deduction over breaking PSR, being handed a four point deduction with many outside the league calling for changes.
PSR reforms have been heavily discussed by clubs, which are anticipating a complete overhaul in June. 17 out of 20 clubs are expected to vote in favour of a system overhaul, with 14 needed to pass a vote.
Despite Premier League officials formulating new changes to PSR, they are wary of the prospects of the league losing its number one position in European club football from a revenue and spend standpoint.
The introduction of the new independent football regulator has also been cited as a potential threat to the Premier League’s status, with CEO Richard Masters recently stating that he would not want it to get in the way of the league being the ‘envy of the world’.
He said: “As chief executive of the Premier League, my overriding concern is that the bill would reduce our competitiveness and weaken the incredible appeal of the English game.
“It is a risk to bring politics and lobbying into football, especially when there are also genuine concerns regarding how truly independent the regulator will be.
“Already, before it has even arrived, the promise of regulatory intervention in football finances has changed incentives for a new voluntary arrangement to be struck.
“We have spent the past year in discussions with the EFL about an even more generous financial settlement. But these talks have only served to highlight how destabilising intervention could be.”
