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Premier League clubs back plan to look at spending cap

By primenewsghana
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Premier League clubs have voted in favour of developing plans to introduce a spending cap.

Sixteen clubs approved proposals for the Premier League to complete the final economic and legal analysis needed to create a spending-cap model.

The model might be presented to clubs at June's annual general meeting (AGM), and if voted through it would replace the current Profit and Sustainability Rules (PSR) from the 2025-26 season onwards.

Manchester City, Manchester United and Aston Villa opposed the possible introduction of a spending cap on Monday, while Chelsea abstained.

The league's current financial rules, under which Everton and Nottingham Forest were penalised eight and four points respectively this season, have been criticised for favouring clubs with the highest revenues.

A spending cap would limit clubs' outlay on transfers, wages and agents' fees.

Proposals have reportedly included spending being capped to between four and five times the amount the lowest-earning Premier League club receives in TV revenue.

Leeds United, who finished 19th in the Premier League in the 2022-23 season, earned £112m in broadcast revenue - the least out of the 20 clubs in the top flight.

What are the current rules?

The Premier League's Profit and Sustainability Rules permit clubs to lose £105m over a three-season period.

The Premier League says the current regulations are designed to try to ensure the long-term financial sustainability of clubs and maintain the competitive nature of the league by preventing "unfair advantages".

What is the background?

In February, the Premier League was warned that a failure to reach a funding deal with the English Football League (EFL) would mean an agreement being imposed on it by a new football regulator being created by the government.

The following month, the Premier League and the EFL failed to settle on a funding deal.

Instead, the Premier League said that the clubs in the top flight had agreed to introduce a new, competition-wide financial system to replace the Profit and Sustainability Rules.

What is Uefa's Financial Fair Play model?

When the idea of moving away from the Profit and Sustainability Rules was first discussed, it had been anticipated that Premier League clubs would move towards a model adopted by Uefa.

Under Uefa rules, clubs can spend no more than 90% of their revenue on squad costs. This will reduce to 70% from the 2025-26 season.

This means the amount they can splash out is limited by the amount of cash they generate.