Premier League agrees to bring in salary cap ‘anchored’ against TV revenue from 2025/26

April 30 – English Premier League clubs have taken a significant step towards introducing a salary cap for the first time in order to limit the gap in financial strength between teams at the top and bottom of the division.

A hard spending limit on wages and transfers would be linked to the revenue of the league’s poorest club.

The so-called “anchoring” plan will be capped at five times the lowest earning side receives via the Premier League’s broadcast deals. Official figures for last season show the bottom club, Southampton, were paid £104 million in TV money.

The Times said that clubs are expected to be assured that any cap would not cause any of them to reduce spending from their present level.

The plan on Monday reportedly received 16 votes from the 20 clubs, two more than the required number to be approved. Defending champions Manchester City, plus Manchester United and Aston Villa reportedly rejected the proposal, with Chelsea said to have abstained.

If approved at an annual general meeting in June, the new model will replace the controversial Profit and Sustainability Regulations (PSR) from the 2025-26 season.

Everton and Nottingham Forest have been docked points this season due to breaches of PSR, which allows clubs to lose only £105 million over a three-year period.

Critics of a cap on spending believe it could hinder the Premier League’s position as the richest and most watched league in the world.

However, those in favour of the plans cite increasing Champions League revenue for the top teams and the spending power of state-backed clubs such as Manchester City and Newcastle as justification for limiting spending to maintain competitive balance.

Premier League clubs have already agreed to follow UEFA’s new financial fair play regulations from 2025/26 by limiting spending to 85% of their total revenue on wages, transfer payments and agents’ fees.

Player unions have warned that salary caps, which are a feature of most US sports, could go against European competition law. The Professional Footballers’ Association said after the vote on Monday: “We will obviously wait to see further details of these specific proposals, but we have always been clear that we would oppose any measure that would place a ‘hard’ cap on player wages.”

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