Premier League to vote on new FFP rules in huge blow to Big Six
Monday, the Premier League teams will discuss “game-changing” financial fair play, or FFP, rules that might introduce a strict pay ceiling, or “anchoring.” Also, introducing squad cost limitations is a part of the league’s effort to revamp its financial fair play regulations.
Clubs in the Premier League have already decided to implement squad spending limitations similar to those implemented by UEFA. Now, the league is revising its contentious Profit and Sustainability Rules (PSR).
Wages, transfer payments and agency fees can only make up 70% of a European club’s total income under such conditions. Non-European Cup clubs will have 85% spending power.
However, it has just come to light that Premier League teams will first discuss a system known as anchoring. It would limit the pay bills of the wealthiest club to a multiple of the television money received by the lowest club. Opponents claim it would dilute competition and hurt the Premier League’s financial supremacy, while supporters insist it will keep things fair.
Premier League needs two-thirds backers for FFP rules to change
To alter the rules of the Premier League, they will require the backing of a majority of clubs, namely two-thirds (14-6) of the clubs, as per The Athletic. There is a fresh proposal to restrict expenditure, and the 20 teams in the Premier League will vote on it on Monday.
On top of that, they mention that most of the 20 teams are on board with implementing a “hard spending cap” as part of the new “squad cost” regulations for the 2025/26 season. On Monday, at least fourteen Premier League teams will have to vote in favor of the strict spending limit.
Under the proposed spending limits, top-flight teams would be unable to spend as much on player acquisitions. The lowest-earning clubs will receive a multiple of what the league’s centralized broadcast and advertising arrangements pay them. The Premier League has proposed a spending cap that is a multiple of five.
“The cap would have been £518million, five times the £103.6m that Southampton, who finished 20th, earned in centralized revenues,” according to The Athletic. “Chelsea, Manchester City, and Amortized Transfer Fees and Payments to Agents” amounted to more than that last season.
Why did the idea of luxury tax fail?
Previously, there was talk of instituting a “luxury tax,” in which wealthy teams would pay hefty penalties. Thus, the proceeds would go toward helping the less wealthy clubs stay within their FFP restrictions. But there wasn’t enough backing to get it beyond the brainstorming phase.
The current PSR will still apply to clubs until this summer. At that time, nothing will have changed. It would function as “shadow legislation” for the next season and be enforced for the 2025-26 season.
The Premier League has set a June deadline for clubs to agree on new financial fair play regulations. With new regulations on the horizon, teams that are already dangerously near the PSR limit will have to make cuts during the next transfer window. That includes Chelsea, Newcastle, Arsenal and Nottingham Forest.
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