Can a spending cap make the Premier League less boring?

On Monday, Premier League clubs agreed in principle to introduce a spending cap ahead of the 2025/26 season to replace current profitability and sustainability rules. Also known as anchoring, this policy ensures clubs can only spend specific amounts on transfers, wages, and agents’ fees. The hypothetical rule would mean clubs can only spend the equivalent of the bottom club’s TV broadcast revenue on those areas.

For example, based on TV revenues from the 2022/23 season, the hard spending cap for clubs in the Premier League would be $159 million. That is how much a club’s financial spending could be. Now, these clubs could bring in more expensive signings, which have been climbing in recent years. That requires clubs to sell assets to earn more revenue. This ruling prevents incredulous spending from clubs that have wealthier owners.

Sixteen out of the 20 clubs in the Premier League voted in favor of the issue. The three that voted against are Manchester United, Manchester City and Aston Villa. Chelsea abstained in the vote. There are several consequences of what this would mean. In theory, the financial gap would be smaller between the top clubs like Manchester City and the bottom ones. That includes clubs like Luton Town or Sheffield United, which had a net spending of less than $40 million in transfers this season.

By comparison, three clubs had net spending losses greater than that hypothetical figure that would come from anchoring. Going back to last season’s TV revenue from Southampton of $159 million, Chelsea, Arsenal, and Tottenham had net spending greater than that amount. With anchoring, those three clubs would violate the new rule.

Is a spending cap what the Premier League truly needs?

Limiting what clubs can spend on players can help the Premier League. One of the biggest criticisms of the English top flight is that, before the first ball is kicked in August, there is a foregone conclusion. Manchester City has won seven of the…

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Author : Kyle Fansler

Publish date : 2024-04-29 18:33:41

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