Premier League clubs have agreed in principle to a spending cap that will limit clubs’ spending to only five times the commercial and broadcast incomes of the lowest earning teams in the league.
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The new spending model, known as ‘anchoring’, represents an effort to level the playing field amongst top flight clubs. In recent seasons, we’ve seen the likes of Everton and Nottingham Forest both face point deductions in breach of the Premier League’s current Profitability and Sustainability Rules (PSR).
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The spending cap proposal, set to commence from the 2025/26 season, was agreed by all clubs on Monday, with the exception of Manchester City, Manchester United and Aston Villa voting against it, whilst Chelsea abstained from voting. The proposal will now go to an Annual General Meeting (AGM) before it's potentially passed in June - this will be the first time in Premier League history a cap of this nature would be introduced.
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If this spending cap was introduced last season, it would have been £518 million – five times the £103.6 million 20th placed Southampton earned in broadcast and commercial revenue. Chelsea have exceeded that limit by about £21 million, with Manchester United and Manchester City the highest spenders under the cap.
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Caps of this nature have been implemented in American sports since the 1980s with the NFL, MLS and NBA all operating under similar methods of financial regulation. And although the Premier League has yet to action a spending cap of their own, it's clear a significant shift in the league's approach to financial governance is potentially on the cards.