Richard Masters has been chief executive of the Premier League since 2019
Premier League clubs are reportedly at odds regarding the potential implementation of a new ‘salary cap’ system, ahead of a crucial vote on updated financial regulations scheduled for next month, according to BBC Sport sources.
The proposed ‘top-to-bottom anchoring’ (TBA) model would place a restriction on club expenditure related to player wages, agent fees, and transfer fees, limiting it to five times the broadcasting and prize money revenue earned by the Premier League’s lowest-earning club.
This approach would effectively cap spending across the league, irrespective of individual club income.
The TBA model is currently undergoing trials within the Premier League, alongside a ‘squad cost ratio’ (SCR) system designed to allow clubs to spend up to a predetermined percentage of their total revenue on squad-related expenses.
On November 21, Premier League stakeholders will convene to vote on the adoption of either, or both, models, potentially replacing the existing Profit and Sustainability Rules (PSR), which currently permit losses of £105m over a three-year assessment period.
With nine Premier League clubs already obligated to adhere to UEFA’s SCR regulations due to European competition qualification, some stakeholders advocate for aligning domestic and European financial frameworks.
To foster financial sustainability, UEFA permits clubs participating in its competitions to allocate up to 70% of their revenues to squad costs. The Premier League has suggested a more permissive threshold of 85%.
However, BBC Sport understands that several Premier League clubs are only inclined to support the SCR system if it is coupled with the ‘anchoring’ mechanism, intended to prevent clubs with substantial revenues from gaining an insurmountable advantage, thus safeguarding competitive balance within the league.
Heightened apprehension surrounding the increased revenues accruing to top-tier clubs from expanded European club competitions and the Club World Cup has solidified this position.
Last year, 16 clubs voted in favor of conducting comprehensive analysis of the TBA model, with Manchester United, Manchester City, and Aston Villa dissenting.
The aforementioned clubs reportedly expressed concern that linking spending to the revenue of the league’s lowest-placed club could place them at a disadvantage compared to European counterparts bound only by SCR regulations.
At the time, Manchester United co-owner Sir Jim Ratcliffe asserted that 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, Sheffield United, finishing in 20th place, earned approximately £110m. Consequently, under the TBA model, no Premier League club would have been permitted to spend more than £550m on player wages, amortised transfer fees, and agent commissions.
Conversely, a European club generating revenues of £1bn, for example, could spend £700m while still adhering to UEFA’s SCR rules.
Manchester City’s wage expenditure last year totalled £413m, against total revenues of £715m.
Ahead of the upcoming meeting, the Premier League has reportedly circulated proposals to its member clubs, including the suggestion that breaches of anchoring regulations could result in points deductions.
Everton and Nottingham Forest both received points deductions in 2023 and 2024, respectively, for violating the league’s Profit and Sustainability Rules.
In February, the Professional Footballers’ Association (PFA) issued what the Premier League characterized as “legal demands” concerning the potential impact of anchoring on player contracts should the model be implemented.
The league stated that the players’ union had been afforded “multiple opportunities to provide feedback.” The PFA remains opposed to the TBA model and has retained the services of barrister Nick de Marco in preparation for potential legal challenges.
In 2021, an independent arbitration panel upheld the PFA’s claim that a proposed salary cap by the EFL for League One and League Two was “unlawful and unenforceable.”
Premier League set to decide on PSR alternative
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