The Times report that the Premier League is set to introduce their own version in a bid to try and keep spending under control in the world’s most watched football league. The plan is, however, to introduce a higher percentage to allow for owners to continue to invest in their squads to reach and then be competitive in Europe.
The Premier League plans, which the Times report claims has broad support from the ‘big six’ of Liverpool, Manchester City, Manchester United, Chelsea, Arsenal and Tottenham Hotspur, are in their infancy and any plan to bring in the new regulations would be phased over a period of time.
UEFA’s new regulations which begin next year will start with a 90 per cent revenue to transfer/wage spend limit for the 2023 calendar year, followed by 80 per cent and 70 per cent over 2024 and 2025. Losses of €60m over three seasons are permitted as long as the club owners cover the extra losses by cash injections. The figure currently stands at €30m.
The failed European Super League plan, of which Liverpool were one of the 12 clubs behind it, had cost control measures as part of their overall plan, with proposals to limit the spending of its member clubs to 55 per cent of turnover on salaries and transfers combined.
Compared to their European rivals the Premier League dominates when it comes to the revenues generated, something that has shown itself this summer with gross Premier League transfer spend surpassing £1.5bn, comfortably beating the previous record of £1.4bn. That spending is considerably more other European leagues, including Spain’s La Liga.
With traditional US sports not having a promotion and relegation system in place costs and revenues are far more predictable when compared to football. While relegation isn’t something that unduly bothers Liverpool, missing out on the top four and the Champions League can have damaging impact on finances.
Any new rules would do little to address the major financial gap that exists between the biggest clubs and the rest, but it does limit what rivals can do and potentially puts the reins on the spending of the likes of Manchester City, Chelsea, Manchester United and the emerging force of Newcastle United under the ownership of the Saudi Arabian Public Investment Fund.
What is crucial, however, is that Liverpool keep driving revenues forward to ensure that they can maximise their position and not lose crucial ground. If any new Premier League rules also include the ability for clubs to spend more dependent on delivering revenue from player sales then the player trading model that had worked so well for Liverpool in the past would take on greater importance.
UEFA’s new rules are claimed to make it harder for clubs to bypass than FFP, with clubs facing breaches of national tax laws should they try to disguise wage expenditure through other revenue streams.