The Premier League announced on Thursday that clubs in English soccer’s top flight face a points deduction if they breach new spending controls due to take effect from next season.
The 20 clubs will not be allowed to make a loss above ￡105 million (US$165 million) over the next three seasons, while from 2013-2014 they must limit their player wage bills.
“If people break the ￡105 million we will look for the top-end ultimate sanction range — a points deduction,” English Premier League chief executive Richard Scudamore said.
Officials hope “financial fair play,” which follows a similar directive from European governing body UEFA applying to continental competitions, will make Premier League clubs economically self-sufficient.
It would mean an end to the kind of spending sprees associated with European champions Chelsea, bankrolled by Russian billionaire Roman Abramovich, and reigning Premier League champions Manchester City, backed by oil-rich Abu Dhabi-based owners.
However, there are those who argue that for previously middling clubs to challenge giants such as Manchester United, there is no other way than by a massive cash injection and that the new rules could simply entrench the existing order, making for a less exciting league.
However, Scudamore said: “The balance we have tried to strike is that a new owner can still invest a decent amount of money to improve their club, but they are not going to be throwing hundreds and hundreds of millions in a very short period of time.”
“I think at ￡105 million you can still build a very decent club with substantial owner funding, but you have to do it over time, you can’t do it in a season,” Scudamore said.
The example of crisis club Portsmouth, FA Cup winners in 2008 and a Premier League team just three years ago, provides a salutary lesson in what can go wrong.
After several times being pushed to the brink of financial collapse, following a rapid turnover of owners, the south coast club, now struggling in third-tier League One, are facing expulsion from senior English soccer if a proposed fans’ takeover does not go through.
With players’ salaries making up the bulk of most clubs’ spending, the Premier League has also agreed to wage restrictions.
Those will kick in at ￡52 million next season, ￡56 million the following campaign and ￡60 million in 2015-2016.
“It’s not a salary cap, it’s a restraint on over-spending,” West Ham United co-owner David Gold said. “If clubs increase their revenues then they can increase their spending. We have got restraint, that’s the important thing. What’s driving the whole thing is we’ve got to avoid another Portsmouth.”
Britain’s Press Association reported the new financial regulations had only narrowly achieved the required two-thirds majority, with 13 clubs voting in favor, six against and Reading abstaining.
Chelsea, because of Abramovich’s involvement, were thought to be opposed to any changes to the existing setup, but a statement issued after Thursday’s meeting said: “Chelsea Football Club is supportive of moves that promote financial stability in football.”
“We are already subject to UEFA’s financial fair play principles and will comply with those,” it said. “The new rules will be subject to further detailed discussions before they are brought in and we will play our part in those to ensure implementation is fair for all clubs in the league.”