August 23 2014 Latest news:
Friday, February 8, 2013
Wealthy owners will no longer be able to buy overnight success in the Premier League after top-flight chairman agreed to new spending controls by the narrowest majority.
Clubs will now face a points deduction if they breach new restrictions on racking up huge losses and excessive wage increases for their squads.
The 20 club chairmen voted by 13 to six - with one abstention - to implement two significant controls - to limit players’ wage bills from next season, and longer-term measures that will restrict the amount of losses clubs can make to £105million over three years.
Clubs whose total wage bill is more than £52million will only be allowed to increase their wages by £4million per season for the next three years, although that cap does not cover extra money coming in from increases in commercial or matchday income.
The effect of the financial controls should prevent hugely wealthy owners achieving the almost-overnight success of Chelsea and Manchester City.
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.
“While it has worked for a couple of clubs in the last 10 years, and I am not critical of that, if that’s going to be done in the future it’s going to have to be over a slightly longer term without the huge losses being made.
“I think at £105million 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.”
Any club breaching the rules will face tough sanctions - and Premier League chief executive Scudamore said they would be pushing for points deductions.
Scudamore said: “The clubs understand that if people break the £105million we will looking for the top-end ultimate sanction range, points deduction.”
Only 13 of the 20 clubs voted in favour, six against with Reading abstaining. It meant that the ‘yes’ vote only narrowly achieved the necessary two-thirds majority of the 19 votes cast.
Clubs sources say Fulham, West Brom, Manchester City, Aston Villa, Swansea and Southampton all voted against. Chelsea, who had initially been viewed as opponents of financial fair play regulations, voted in favour.
Of the 20 clubs in the top flight, Manchester City, Chelsea, Aston Villa and Liverpool have reported losses of more than £105million over the last three years, according to the most up-to-date published accounts.
Scudamore said there would be an “absolute prohibition” on clubs reporting losses of more than £105million over the next three years with the first sanctions possible in 2016. Any club making any loss of more than £5million a year will have to guarantee those losses against the owner’s assets.
The ceiling when the wage increase restrictions kick in will be £52million next season, £56million the following year and £60million i 2015/16. Only seven of the current top-flight clubs would be under that ceiling at the moment.
The Premier League’s legal advisers will now work on the detailed proposals and these will be brought back before the chairmen in April to be ratified.