The clubs of the Premier League have agreed in principle to introduce the spending cap rule to solve the problem of weak competitiveness of the league. In the past few years, due to the monopoly of a few clubs with rich financial resources, other clubs are at a clear disadvantage in the championship competition. In order to maintain the global appeal of the Premier League, this change is imperative.
The operation mode of this rule is relatively simple, that is, to limit the investment amount of any club in the team. The rules will be determined according to the numerical multiples obtained by the club with the lowest income in the league, to ensure that all clubs are restricted in wages, transfer fees and brokerage fees. This multiple is currently proposed to be 5 times, and the final decision will be made at the annual general meeting of shareholders.
Based on the data of last season, Southampton Club obtained 103.6 million pounds from TV and business income, which will become the upper limit for other clubs to comply with. For such rich clubs as Chelsea and Manchester City, their line-up costs will be limited. For other clubs, they will gain more flexibility, but only if the multiple of rules can reach consensus.
This expenditure cap rule is closely related to the profitability and sustainability rule (PSR). From the 2025-26 season, the PSR rules will no longer exist alone, but complement the expenditure cap rules. The club's expenditure will not exceed 85% of the total income, so that the team will be more limited in operation.
At present, the timing of this rule discussion is very critical. With the expansion of the number of participants in the Champions League next season, those English clubs that can qualify will have the opportunity to earn more money, thus further widening the gap with other clubs. For some clubs, this will be a serious competitive disadvantage.
If a club violates the spending cap rules, it may face the risk of levying a luxury tax. This rule aims to ensure that clubs comply with expenditure restrictions and improve the fair competitiveness of the league. However, if the club deliberately violates the rules, it will still face final sanctions, including points deduction and other measures. From the current situation, Manchester City, Manchester United, Chelsea and other big clubs may oppose the cap spending rule. They are worried that this rule may affect their competitiveness and may even violate the Competition Act. Nevertheless, the Premier League still hopes to reshape the competition order of the league through this rule to ensure that all clubs have the opportunity to compete for the championship.
