Spending limits in the Premier League: The Great Illusion

The facts, to begin with. This April 29, the Premier League decided to continue its discussions on the introduction of a spending cap (from a “limitation of expenses“) of its twenty shareholders from the 2025-26 season. Sixteen of them spoke in favor of continuing this initiative. Three opposed it: Aston Villa, Manchester City and Manchester United, while Chelsea abstained.

The PL takes its decisions by a two-thirds majority, or fourteen votes out of twenty, the matter is therefore heard. The richest and most expensive championship in the world (if we except the outbreak of fever of the Saudi Pro League last summer) would therefore have chosen to take the path of virtue in matters of money, forcing its clubs to respect a spending ceiling which would preserve its financial balance. The proposal is expected to be voted on at the organisation’s AGM next month. Given the distribution of forces present, there is little doubt about its outcome.

Presented in this way, this decision, which follows the deduction of points from which Everton (twice) and Nottingham Forest (who lost their appeal) received for non-compliance with the financial rules of the PL, seems to go in the direction of an in-depth transformation of the Premier League, which is part of a broader framework: that of the impact that the imminent arrival of a “football regulator” mandated by the government, with the support of the Labor opposition and other parties represented in the House of Commons.

In short, the time has come to clean up in a house whose occupants tend to forget to do the dishes or take out the trash when it is their turn. This does not mean that it is a sweeping sweep; rather with a stroke of the duster where the dust is most visible.

This is because when we look a little closer, we are entitled to wonder what these new provisions would really change.

First of all, there is no question of imposing a salary cap, as we have written a little hastily here and there. Salaries would only be one of the parameters taken into account, and nothing would prevent Manchester City from offering Jude Bellingham double what he earns at Real Madrid if the desire took them.

Then, it was first a question of putting in place an alternative to the regulations in place (Profitability and Sustainability Regulations, or PSR), which everyone agrees does not work or no longer works as intended. As things currently stand, no club can record losses in excess of £105 million over three seasons under penalty of sanctions. And that’s about it; in other words, insufficient.

At first reading, the new provisions would at least provide more clarity on what would be permitted and what would not. A club, for example, could not spend more than 85% of its income on transfers, salaries and commissions paid to intermediaries, with this additional condition: the amount spent could not exceed a multiple to be defined of the TV rights paid to the least successful club. loti of the PL.

In 2022-23, that club was Southampton, who finished this season at the bottom of the PL pack, and were therefore relegated, but not without having received £103.6 million in TV rights. The situation will have hardly changed in 2025-26, given that the PL will only benefit from a 4% increase in its rights in the United Kingdom by then (the agreements have already been signed). If we assume that roughly the same will be true for the rights paid by foreign rights holders, the Southampton of that year would therefore receive 107.7 million pounds, according to calculations by the football economist Swiss Ramble, an authority on the subject.

The question then is: what multiple to use to determine the spending cap what should the current giants of the PL respect? A factor of 4.5 was once considered, but it seems that we are moving towards a base of 5.

Clearly, this means that no club, whatever its income, could spend more than five times 107.7 million, or 518 million, on salaries, transfers and commissions.

It is an understatement to say that this allocation is generous. In fact, according to Swiss Ramble’s calculations, only one PL club, Chelsea, would have exceeded this ceiling if it had been in force in 2022-23, and even then, just barely: by 35 million, a pittance. Even Manchester City would have had room for maneuver of around 40 million, which did not prevent City from voting against the proposal.

We see that we are very far here from spending cap which many would like to see introduced at European level in order to remedy the current imbalance between the super-rich and the rest. To present the PL initiative as a first step in this direction would be to go astray from A to Z. It is not the reduction of expenses which is the objective. It is the establishment of a regulatory framework which ultimately would allow the opposite, that is to say for these super-rich to continue to spend what they spend today without fear of get your knuckles slapped. “Control”, here, means nothing other than ratifying a state of affairs.

Giuseppe de Lampedusa makes his character Tancred say in Cheetah : “if we want things to stay the way they are, things will have to change.” The Premier League is of exactly the same opinion.