Premier League clubs agreed to go ahead with plans to introduce cost caps.
Monday 29 April at 17:31
The BBC writes. The decision means that, for the first time, a ceiling will be set on how much the Premier League clubs can spend in the future on transfers, salaries and agent fees.
The details are expected to be in place before the annual meeting in June – when all the clubs for next year’s season are ready.
One of the details the clubs must agree on is the size of the cost ceiling.
According to the English media, the majority have backed the principle that no one can spend more than a given number of times the amount the league’s worst team receives in TV money.
Cost caps mean that a limit is set on how much money football clubs can spend on players, wages and agents.
The aim is to keep the Premier League competitive and avoid a few rich clubs completely dominating.
The clubs may be limited to using a certain proportion of the TV money they receive. The cap will apply to the total cost of a club’s player base, not to individual wages. After strong dissatisfaction from several of the biggest clubs, it is now likely that the ceiling will be five times what the club receives – and not 4.5, which was initially proposed, writes The Athletic.
A possible sanction could be fines in the form of a luxury tax, as is done in Major League Baseball in the USA. Another consequence may be point penalties.
If the cap is introduced, it will not necessarily mean that the clubs have to cut their expenses now, but it will put a limit on future expenses.
The purpose of the restriction is to ensure that England’s top division remains competitive. Many fear that the league will be dominated by one or two super-rich clubs if action is not taken.
All proposals at a shareholder meeting in the Premier League require a clear majority to be adopted. At least 14 out of 20 clubs must say yes.
Also read: Premier League clubs to vote on cost caps
according to The Mirror 16 clubs voted for the proposal during Monday’s meeting. Manchester United, Manchester City and Aston Villa voted against, while Chelsea voted blankly.
The Premier League has previously introduced a rule that limits clubs to spending up to 85 percent of their total income on wages and transfers. The scheme applies from the 2025/26 season.
This is how it can work:
- Premier League figures from last season show that bottom club Southampton received 104 million pounds in television money.
- A cap of, say, six times that amount would have given Manchester City and the other top clubs a cap of £624m on transfers, wages and agents.
- That will be slightly more than the 619.5 million that Manchester City spent last year.
