The Premier League is set to vote on a new financial regulation system with the aim to balance competition, but executives across the league believe it is doing more harm than good.
Premier League clubs are set to officially vote on the introduction of a new salary cap with both Manchester United and Manchester City fiercely opposing the proposed new rules.
The proposed cap has been dubbed ‘anchoring’, and will cap how much every Premier League club can spend. The measure is five-times the amount that season’s bottom-placed team was paid by the league on their football squad costs, which includes transfer fees, player and coach wages, and amortisation.
For example, the team who finish 20th this season is projected to make £122.3m in total prize money, which includes domestic and international broadcast rights revenue, and commercial sponsorship revenue. The league’s new £6.7bn domestic broadcast rights deal, as well as new international rights deals will help boost total prize money for teams.
This would mean for the 2026/27 season, with 5x multiplier, club’s will be set a £611.5m salary cap to spend on squad costs.
Anchoring will also run alongside UEFA’s enforced ‘squad cost ratio’ rules. This rules that any European club competing in a UEFA competition must not overspend 70% of its annual revenue. For teams not competing in UEFA competitions, this is extended to 85%.
The anchoring proposal is set to replace the league’s Profit & Sustainability Rules (PSR), which requires clubs to not exceed a loss threshold of £105m over three years.
Premier League clubs reportedly voted 16-4 in favour of the anchoring rules when they were first proposed in April 2024, with Manchester United, Manchester City, and Aston Villa voting against, with Chelsea abstaining from voting.
Penalties for breaking anchoring
Similar to PSR, the reported penalties for breaching anchoring involve fines and even potential points deductions.
For a breach of anchoring for a second violation, a possible set six point deduction could be handed out, with an additional one point deduction for every £6.5m overspent the hard salary cap.
The potential £611.5m anchoring cap for next season would already see several Premier League clubs such as Manchester United, Manchester City, Chelsea and others, exceed this cap.
Clubs such as Everton and Nottingham Forest have already been hit with points deductions in the past due to breaking PSR.
The anchoring rules have already drawn criticism from executives of Premier League clubs.
End of ‘Best League in the World’ status?
As previously mentioned, Manchester United and their cross-city rivals Manchester City are two of the primary opponents to the anchoring rules.
United minority owner Jim Ratcliffe has been vocal in his criticism of the proposed financial regulations, believing it will dampen the competitiveness of clubs at the top of the league and strip the Premier League of its ‘best in the world’ status.
“The last thing you want is for the top clubs in the Premier League not to be able to compete with Real Madrid, Barcelona, Bayern Munich, PSG, that’s absurd,” said Ratcliffe. “And if it does, it then ceases to be the finest league in the world.”
A hard cap on squad costs on player wages in particular has caused concerns from other Premier League club executives.
While the league has implemented PSR recently, clubs have still been able to spend hundreds of millions of pounds on player signings in past transfer windows. The most recent summer transfer window saw Premier League clubs spend more than all of the rest of the top five European leagues – La Liga, Bundesliga, Serie A and Ligue 1 – combined.
An insider told The Times the anchoring rules could prevent Premier League clubs from attracting the best players in the world due to the financial constraints. “How can that be in the best interest of English football”, said the insider.
The vote on the new financial rules is expected in November.
