The Premier League's spending cap: levelling the playing field?

Top clubs oppose plan to link spending to income of lowest-earning club, but rule could prevent success gap from widening

Manchester City's Erling Haaland (2nd left) celebrates scoring his side's second goal during the Premier League match between Nottingham Forest and Manchester City at City Ground on April 28, 2024
Manchester City, along with Manchester United and Aston Villa, voted against the proposals, while Chelsea abstained
(Image credit: Andrew Kearns / CameraSport via Getty Images)

A football season marked by off-field controversies may conclude with one of the Premier League's "better boardroom decisions".

On Monday, 16 of the 20 top-tier English clubs backed a proposal for a new "anchoring" system, said Miguel Delaney, chief football writer at The Independent. This is essentially a spending cap, limiting the amount a club could invest to a multiple (likely to be about 4.5 to 5) of what the lowest-earning club receives from centralised broadcasting deals. It would prevent the wealthiest clubs from accumulating more revenue to allow them to spend more, "as has been the case for most of the last 40 years". 

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'Punish them for their success'

This is a "significant step" towards a hard salary cap, said the Financial Times sports editor Josh Noble. It's part of a broader push across European football to halt the "spiralling wage and transfer costs" that have led to "years of losses" for clubs. The financial restraint is being driven by more professional investors and weakening broadcaster demand for live TV rights. 

The Premier League is the richest domestic competition in the world, and boasts six of 10 highest-income clubs in Europe, but they have "largely failed to translate increased revenue into profits". Last season, only three out of the 20 Premier League clubs recorded an annual profit. The competition is exploring new measures to end "the cycle of overspending".

But some executives fear linking spending to income will effectively "lock in the financial advantages of the biggest clubs", said Noble, and harm the competitiveness of the Premier League. Players' unions have warned that salary caps could go against European competition law. 

The Professional Footballers' Association said it would "wait to see further details" of the proposals. But the union would "oppose any measure that would place a 'hard' cap on player wages". 

Manchester United believe the proposal would "slow down" attempts to improve playing fortunes at Old Trafford, which will "cost a lot of money", said The Athletic. Limiting spending would undermine the club's ability to compete at the highest level in European tournaments, and "punish them for their success" in generating such significant revenues year after year.

'A more equitable rule'

It's "no surprise" that Manchester City are opposing the spending cap, said Ian Herbert in the Daily Mail. City are owned by Sheikh Mansour – a member of Abu Dhabi's royal family and the current vice-president and deputy prime minister of the United Arab Emirates. When a Gulf state owns a club, state-owned companies suddenly become interested in "paying top dollar" to sponsor that club. Gulf sovereign wealth funds are "shredding" any notion of financial parity in the competition.

City also have "myriad" other ways of bringing in extra cash, like selling players' image rights to companies they have a financial interest in or "intellectual property" to other clubs they own, or similar "acts of accounting gymnastics". 

The club is facing 115 charges of breaching financial sustainability rules (which it denies). A new system of spending controls, rooted in the "mundane, transparently calculable figure of the lowest club's income", would be a "profound relief" to those living in the real world, said Herbert.

This is a "more equitable rule", said Delaney in The Independent, one that would "encourage sustainability" and help suppress the "maddening" wage race that has led to punishment for overspending and ticket price increases. 

Something that is "often overlooked", he said, is that football's product isn't stars or super-squads, but competitive games. They drive interest because they create "drama", which creates a narrative. And competition balance doesn't happen organically; it requires "heavy regulation" to prevent wealthier clubs from "sailing away". That's why this proposal is being described as "future-proofing". It won't be perfect, but it is "the right step".

Harriet Marsden is a writer for The Week, mostly covering UK and global news and politics. Before joining the site, she was a freelance journalist for seven years, specialising in social affairs, gender equality and culture. She worked for The Guardian, The Times and The Independent, and regularly contributed articles to The Sunday Times, The Telegraph, The New Statesman, Tortoise Media and Metro, as well as appearing on BBC Radio London, Times Radio and “Woman’s Hour”. She has a master’s in international journalism from City University, London, and was awarded the "journalist-at-large" fellowship by the Local Trust charity in 2021.