Premier League agree financial cap and clubs will face points deduction if they breach new rules
Martyn Ziegler, Press Association
12:21 GMT, 7 February 2013
19:08 GMT, 7 February 2013
How Martin Samuel broke the story…
Martin Samuel revealed last month that Arsenal, Manchester United, Tottenham and Liverpool were looking to shackle the spending of Chelsea and Manchester City
Top-flight clubs will face a points deduction if they breach new spending controls agreed today, Premier League chief executive Richard Scudamore has confirmed.
The 20 club chairmen agreed to 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, though 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.
Moneybags: Man City have splashed the cash in their bid for Premier League domination
Rolling in it: Chelsea have spent hundreds of millions under Roman Abramovich
Any club breaching the rules will face tough sanctions – and Scudamore said they would be pushing for points deductions.
Scudamore told reporters: 'As all things in our rulebook you will subject to a disciplinary commission.
'The clubs understand that if people break the 105m we will look for the top-end ultimate sanction range – a points deduction.
'Normally we stay silent on sanctions
as the commission has a free range but clearly if there is a material
breach of that rule we will be asking the commission to consider top-end
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
Of the 20 clubs in the top flight,
only Manchester City, Chelsea 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 that the measures
would mean it will take longer for benefactor owners to achieve success –
but that it would still be possible.
He 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.
FFP plans: The letter, revealed exclusively by Sportsmail's Martin Samuel, with the Arsenal header which says the proposed regulations do not go far enough
'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.'
'Chelsea won the Premier League two
years after Roman Abramovich's takeover, and Manchester City's title
success came three years after Sheik Mansour's takeover.'
Any club making any loss of over 5million a year will have guarantee those losses against the owner's assets.
'In some ways that's the most
significant part, this is a three-year rolling system of secure funding –
it's one year at the moment,' added Scudamore.
The ceiling when the wage increase
restrictions kick in will be 52million next season, 56million the
following year and 60million in 2015-16. Only seven of the current
top-flight clubs would be under that ceiling at the moment.
West Ham's co-owner David Gold said that the proposals for controls had received backing of the majority of chairmen.
He said: 'We have all voted and it
was overwhelmingly supported, not by all the clubs – some are a little
concerned – but the vast majority of the clubs voted in favour.
'It's not a salary cap, it's a
restraint on over-spending. 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.'