A controversial new ‘salary cap’ – which some believe will destroy the Premier League[1] – could become a reality as early as next month.
Top-flight clubs are set to vote on anchoring, which limits the amount of money any side can spend to a multiple of the amount the bottom side received in broadcast revenue and prize money, in the coming weeks.
Both Manchester clubs are known to be opposed to the system, which would run on top of new ‘squad cost ratio’ rules.
They believe it would rob the Premier League’s of its status as the best on the planet and see the world’s top players abandon the competition in their droves. Some also feel it would wreak havoc with the Championship and make it even harder for promoted sides to survive in the top-flight.
‘This will kill the status as the best league in the world and all the money that brings,’ said one exec. ‘It feels like we are being sleepwalked into disaster.’
Known as the ‘top to bottom anchor’ the rule would mean all clubs could only spend five times the amount paid to the side that finished bottom on their ‘football squad costs’ which include player and head coach wages, amortisation (transfer fee spread over duration of contract) and agents’ fees.
A new ‘salary cap’ could become a reality in the Premier League as early as next month
Both Manchester clubs – City’s Phil Foden, Erling Haaland and Rodri pictured – are opposed to the change and believe it could rob the Premier League’s of its status as the best on the planet
Manchester United co-owner Sir Jim Ratcliffe has labelled the controversial move ‘absurd’
Based on 2023/24 figures that would mean an approximate limit of £550m and mean that some sides would be at immediate risk of breach. To compound matters, the proposal is for a second breach to be dealt with by a six-point deduction, with an additional point for every £6.5m of overspend.
Critics believe the move would stop English clubs from paying wages similar to those offered by the rest of the continent’s elite, who would not be subject to such rules, and would see top players such as Erling Haaland and Mo Salah head to the likes of Real Madrid, Barcelona and Bayern Munich.
Three of Europe’s top five wage payers are already clubs outside the Premier League. It could also increase the flow of stars to Saudi Arabia. Over time, such a loss would no doubt lead to smaller TV revenues, which could prove disastrous. It would also, no doubt, lead to fewer transfers between the top-flight and the EFL.
United co-owner Sir Jim Ratcliffe has already voiced his view. ‘[Anchoring] would inhibit the top clubs in the Premier League,’ Ratcliffe said. ‘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, PSG – that’s absurd. And if it does, it then ceases to be the finest league in the world.’
The Premier League, already beset with legal costs that have soared to close to £100m over two years thanks to a series of battles with its clubs, has also warned that introducing anchoring would lead to more pain in the shape of a courtroom challenge by the Professional Footballers’ Association.
The PFA are known to object to the move, as they see it as a hard salary cap, and their opposition would no doubt present a major obstacle to its implementation. Some PFA insiders believe a number of clubs have not grasped the implications of what they are being asked to vote for.
Those against anchoring believe it would also reduce clubs’ incentives to invest in growth given they would be limited in how much they could reinvest into their squads. For some, it could also result in owners getting wealthier in the short term, because they would be limited in how much they would have to spend on wages.
The Premier League is set to bring in anchoring alongside SCR to replace the existing profit and sustainability rules which permit losses of £105m over three years. SCR limits spending to 85 per cent of revenue. They say that anchoring would be a ‘pre-emptive protection that only bites if there is a significant change that puts our leagues competitiveness at risk’.
Real Madrid have a rich and enviable history of luring the world’s best talent to the Bernabeu
PSG established themselves as a European powerhouse by winning the Champions League
Bayern Munich, the giants of German football, lured Harry Kane away from England in 2023
However, opponents reject that there is a competitiveness issue at the top of the league given a number of close title races and argue that the main issue is at the bottom – which would be exacerbated by anchoring.
They say four different teams have become champions in the last decade and add that five of City’s eight wins have been secured on the final day of the season. With regards to squad cost, the club with the highest spending on wages has won the title in three of the past 10 seasons.
Their argument is that the EFL would feel obliged to follow and would introduce a similar system into the Championship, in order to achieve their stated ambition of abolishing the parachute payment system.
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Such a move, should it remain a multiple of five, would mean any club relegated would be automatically in breach of what would be a £40m ‘cap’ based on 2023-24 figures. Indeed, had the system been in place at least four parachute payment clubs, Leeds United, Norwich City, Leicester City and Southampton, would have breached.
A 25-page draft of proposed rules has already been presented to clubs with a vote due to take place at a meeting on November 21. Amendments may be made between now and then.
Should more than two thirds of clubs vote in favour, the system would come into play from next season.
The Premier League have been contacted for comment.
References
- ^ Premier League (www.dailymail.co.uk)