Premier League clubs have unanimously agreed to proceed with plans for a hard spending cap as part of the "squad cost" rules. This decision, set to come into effect at the start of the 2025-26 season, was discussed at a Premier League shareholders' meeting held recently in London.
The proposed spending cap will anchor the maximum permitted expenditure of any club to a multiple of what the lowest earning side receives through centralised broadcast and commercial deals from the Premier League. Initially, this concept suggested a multiple of 4.5 but faced strong opposition from several clubs. As it stands now, if approved in June's annual general meeting (AGM), it is expected that a multiple of five will be implemented.
The introduction of this squad cost rule was unanimously approved earlier this month and is anticipated to be finalised during June's AGM.
Premier League spending cap different than La Liga model
This spending cap aims to function as a backstop to the squad cost rule which ties club spending to their revenue percentage. If implemented last season, for instance, current Championship club, Southampton would have had its cap set at £518 million - five times its centralised revenues (£103.6m).
Clubs like Chelsea and Manchester City who spend significantly more on wages and other fees stand out under such regulations. Lower-revenue clubs view these measures favourably as they believe it could prevent higher-earning teams from outspending them exponentially. Without such measures in place, there are concerns that competitive balance within league games could further deteriorate.
This move might serve as an encouragement for other leagues looking forward to closing their gap with Premier League standards. Some rivals like La Liga already have their bespoke spending caps in place; however, this model is unique because it ties one club’s expenditure directly with another’s revenue - unlike previous financial fair play (FFP) rules that were based on a club’s own revenue.
Manchester United in the opposition for proposal
Despite the general consensus, some top Premier League clubs like Manchester United have expressed their concerns. They believe such measures could negatively impact the league's competitiveness. The Professional Footballers’ Association (PFA), the players' trade union, is also expected to show interest in any move that sets a ceiling on how much an employer can pay their employees.
A PFA spokesperson said:
“We will obviously wait to see further details of these specific proposals, but we have always been clear that we would oppose any measure that would place a ‘hard’ cap on player wages.
“There is an established process in place to ensure that proposals like this, which would directly impact our members, must be properly consulted on.”
For this proposal to be introduced successfully, it must gain approval from not just Premier League clubs but also from the Professional Football Negotiating and Consultative Committee - a body that brings together various stakeholders including Professional Footballers’ Association (PFA), English Football League and Premier League for discussions related to player employment matters.
