Premier League clubs are divided over spending cap proposals

Premier League clubs are divided over whether to introduce a controversial new ‘salary cap’ ahead of next month’s vote on financial regulations, BBC Sport has been told.

The top-down anchoring model – or TBA – would restrict the amount a club could spend on player wages, agents and transfer fees to five times the income earned from broadcasting and prize money of the bottom club in England’s top flight.

This approach means that a cap will be imposed on clubs’ spending, regardless of their income.

The TBA is currently being trialled by the Premier League, alongside a ‘Squad Cost Ratio’ (SCR) financial control system that allows clubs to spend up to a percentage of their total revenue on team-related costs.

On November 21, the Premier League will meet and vote on whether to adopt either or both models, replacing the current Profit and Sustainability Rules (PSR) that allow losses of £105m over a three-year reporting cycle.

Nine of the 20 Premier League clubs must adhere to UEFA’s rules (SCR) as a result of qualifying for Europe, and some believe it makes sense to harmonize the regulations.

In order to encourage sustainability, UEFA allows participants in its competitions to spend up to 70% of their revenues on their teams, while the English Premier League said it would allow a more generous percentage of up to 85%.

However, BBC Sport has been told that a number of Premier League clubs will only vote to implement the SCR system if it is accompanied by ‘stabilisation’, so that those with the highest revenues do not get too far ahead of the rest, and competitive balance is protected.

This position has been strengthened by the additional funds generated through expanded European club competitions and the Club World Cup.

Last year, 16 clubs voted for a detailed analysis of the TBA, with only Manchester United, Manchester City and Aston Villa voting against it.

All three were known to be concerned that being restricted by the revenue of the bottom-placed club in the league could put them at risk compared to some of their European rivals, who only have to abide by SCR rules.

At the time, United co-owner Sir Jim Ratcliffe said the anchor would “block out the top clubs in the Premier League, and 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 and Paris Saint-Germain – that’s ridiculous.”

In the 2023-24 season, 20th-placed Sheffield United earn around £110m. So, last season, no top-flight club would have been able to spend more than a total of £550m on player wages, amortized transfer fees and agents, had the TBA been in place.

Meanwhile, a European club with revenues of £1bn, for example, would be able to spend £700m while adhering to UEFA’s rules (SCR).

Manchester City spent £413m on wages last year, with total revenues of £715m.

Ahead of its meeting next month, the Premier League has now sent proposals to its clubs, which reportedly include a proposal to punish those who breach the basic rules with points deductions.

Everton and Nottingham Forest were hit with points deductions in 2023 and 2024 as a result of PSR breaches.

Last February, the Professional Footballers’ Association (PFA) issued what the Premier League described as “legal demands” over concerns it had about the impact fixation could have on players’ contracts if it were introduced.

The league said the players’ union had “multiple opportunities to provide feedback.” The ATP still opposes the TBA, and has retained attorney Nick DeMarco in case it decides to take legal action.

In 2021, an independent arbitration panel upheld the PFA’s claim that the EFL’s planned salary caps for League One and League Two were “unlawful and unenforceable”.