Premier League to trial two new spending cap systems next season

June 7 – The Premier League announced on Thursday that it will trial two new spending cap systems starting next season.

The first system, known as the ‘Squad Cost Rules’, will restrict clubs in the English top flight to spending no more than 85% of their football revenue and net profit or loss from player sales on player expenses.

The second system, called ‘Top to Bottom Anchoring’, will limit spending to a multiple of the lowest projected prize money and TV rights revenue that any team is expected to earn.

The two forms of spending will aim to enhance and maintain financial sustainability and competitive balance within the Premier League, as well as to encourage ambition among clubs, according to the league.

The current ‘Profitability and Sustainability Rules’ (PSR) will remain in effect during the trial period. These trials are non-binding.

Under the existing PSR rules, which permit clubs to incur losses up to £105 million ($134 million) over three years, Everton and Nottingham Forest received points deductions last season. Yet there is a growing sense that the league is losing its competitiveness and that smaller clubs get slapped too aggressively with sanctions.

Manchester City have won the league four times in a row, the first English club to do so. In return, they have received heavy scrutiny for their heavy spending and state-backed operations and currently have 115 outstanding charges for breaches of financial rules against them.

In contrast Everton and Nottingham Forest, battling to avoid relegation all season in the bottom half of the Premier League, were both sanctioned with points deductions and fines.

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