Earlier today that was a meeting of Premier League chairman in London who voted to adopt spending controls and a form of restraint on salary increases.
The new rules state that clubs can only lose £105m between 2013-2016 and that wages bills over £52m can only rise £4m per season if funded through TV cash. Clubs that breach the Premier League’s new wage increase controls and loss limits will face point deductions. Whilst some clubs may complain, these rules are much more lenient than the €45m allowed by Uefa FFP.
The rules are designed to prevent a repeat of the financial meltdown at Portsmouth, which became the first Premier League club to enter bankruptcy protection in 2010. Portsmouth are currently set to be relegated from League One this season, 11 points away from safety as it stands, when three seasons ago they were playing in the Premier League, reaching the FA Cup final that season and winning it two seasons prior.
If these rules were brought in three years ago, City and Chelsea would be in breach and facing a point deduction. City made losses of £97.9m, £197m and £121m (£311m over according to the new rules). Chelsea made their first profit in the Roman Abramovich era last year, at £1.4m, but made losses of £67.7m and £70.9m the two years before (£32m over according to the new rules).
In contrast, United’s net profit was £23.3m last year, £29.7m the year before, but recording losses of £83.6m the season before (despite making a record turnover of £286.4m) thanks to the Glazers’ interest repayments and one-off financial charges relating to the bond issue.
“The majority of the clubs supported change and now it will be up to the board to put into play. It was overwhelming the support,” said David Gold, co-chairman of West Ham. “Not all 20 clubs (voted in favor), some are a little concerned, but broadly, the vast majority of the clubs voted in favour.”