Modifications to the Premier League’s Profit & Sustainability Rules (PSR) are expected to be passed in June, with a spending cap being one of the more prominent proposals.
In a recent development to PSR proposals, Premier League clubs are now discussing whether to implement an ‘anchoring’ approach to a spend cap on player transfer fees and wages.
The anchorage approach would mean that the club’s income revenue, which finishes last in 20th position, is multiplied to then implement a spending cap benchmark that is set for all clubs for the following season.
For example, Southampton finished in 20th last season and had a revenue income of £103.6m. With the proposed 4.5 multiplier to this figure, which could reportedly go as high as 5x, hypothetically, a spending cap for this season’s teams would be capped at £466m.
This has been proposed alongside previous spending cap suggestions. Earlier this month, Premier League clubs unanimously agreed upon a 70% cap for European competition clubs, and a 85% cap for those not competing in Europe of income revenue.
There have also been discussions surrounding the implementation of a luxury tax to PSR, similar to that of the NBA and NFL. This would essentially be applied to the three-year £105m loss threshold clubs are permitted not to breach and if they do, the luxury tax of however much an offended club goes over the threshold will be distributed to the rest of clubs and potentially across the English Football League (EFL).
All these proposals come as a response to many critics of the Premier League’s financial advantage it has over the rest of European football leagues, in particular the ‘Big Six’ clubs.
PSR was introduced back in 2013 but the league has significantly enforced the rules over the past several years. This has led to Everton and Nottingham Forest receiving points deductions this season for breaching PSR, but the guidelines have been criticised, and has now led to major overhaul which will be passed on in June.
The spending cap proposals have also drawn criticism from both sides of the Premier League. Less wealthy clubs believe a cap on revenue benefits the more wealthy clubs, whilst the bigger teams have argued that such proposals like ‘anchoring’ limits competition at the top of the table.
According to The Guardian, Manchester United officials are reportedly set to reject anchoring spending cap proposals as new minority owners INEOS are potentially likely to invest heavily in the squad in their first transfer window in charge of football operations.
United officials will be able to voice their concerns at the Premier League AGO shareholders meeting in June, with the new PSR expected to be officially implemented in the 2025/26 season.
