Premier League clubs are divided over whether to introduce a controversial new ‘salary cap’ prior to next month’s vote on financial regulations, BBC Sport has been told.
The ‘top-to-bottom anchoring’ model – or TBA – would restrict the amount any club can spend on player wages, agents and transfer fees to five times the income earned from broadcasting and prize money by the bottom club in the English top flight.
The approach means that a cap would be imposed on clubs’ spending, regardless of their own income.
TBA is currently being trialled by the Premier League, alongside a ‘squad cost ratio’ (SCR) system of financial control that allows clubs to spend up to a percentage of their total revenues on squad-related costs.
On 21 November the Premier League will meet and vote on whether to adopt either, or both, models, and replace the current Profit and Sustainability Rules (PSR) that allow losses of £105m over a three-year reporting cycle.
Nine of the Premier League’s 20 clubs already have to comply with Uefa’s SCR rules as a result of qualifying for Europe, and some believe it makes sense to align the regulations.
In order to encourage sustainability, Uefa permits participants in its competitions to spend up to 70% of their revenues on their squads, while the Premier League has said it would allow a more generous 85%.
However, BBC Sport has been told that a number of Premier League clubs would only vote for SCR to be implemented if it was accompanied by ‘anchoring’, so that those with the largest revenues did not get too far ahead of the rest, and competitive balance was protected.
This stance has been hardened by the additional money being generated by expanded European club competitions and the Club World Cup.
Last year 16 clubs voted to conduct detailed analysis of TBA, with only Manchester United, Manchester City and Aston Villa voting against.
All three were known to be concerned that being pinned to the revenue of the league’s bottom-placed club would risk putting them at a disadvantage compared to some of their European rivals, who only have to adhere to SCR rules.
At the time, United co-owner Sir Jim Ratcliffe said anchoring would “inhibit the top clubs in the Premier League, and the last thing you want is for the top clubs in the Premier League not to be able to compete with Real Madrid, Barcelona, Bayern Munich, Paris St-Germain – that’s absurd”.
In the 2023-24 season, 20th-placed Sheffield United earned around £110m. So last season no top-flight club would have been able to spend more than a total of £550m on player wages, amortised transfer fees and agents if TBA had been in force.
Meanwhile, a European club generating revenues of £1bn, for example, would be able to spend £700m while still adhering to Uefa’s SCR rules.
Manchester City spent £413m on wages last year, with total revenue of £715m.
Ahead of its meeting next month the Premier League has now sent proposals to its clubs, which reportedly include a suggestion that those in breach of anchoring rules could be punished with a points deduction.
Everton and Nottingham Forest were handed points deductions in 2023 and 2024 as a result of breaching PSR.
Back in February the Professional Footballers’ Association (PFA) issued what the Premier League described as “legal demands” over concerns it had about the impact that anchoring could have on player contracts if introduced.
The league said that the players’ union had been given “multiple opportunities to provide feedback”. The PFA remains opposed to TBA, and has hired barrister Nick de Marco in case it decides to launch legal action.
In 2021 the PFA’s claim that a planned salary cap by the EFL for League One and League Two was “unlawful and unenforceable” was upheld by an independent arbitration panel.
