Arsenal and Chelsea seek £150m boost as Premier League salary cap warning signals new reality

The Arsenal and Chelsea teams line up before a pre season friendly between Chelsea and Arsenal at Camping World Stadium on July 23, 2022 in Orlando, Florida

The impending introduction of a salary cap into the Premier League could heighten the need for clubs to make the most of the opportunities that lie in the United States.

Last month an agreement in principle was reached regarding a salary cap being brought into English football's top tier. The move is an attempt to try and address the ever-growing gap between the biggest clubs and the rest of the division when it comes to revenue and spending.

At a shareholder meeting in London, the 20 member clubs voted on whether to introduce a spending cap that would be anchored to the broadcast revenues received by the team that finished last in the league the previous season. For context, that figure was £103.6million to Southampton in 2022/23.

The plan was to set a salary cap at five times that amount, with the sum to also include the costs for amortisation and agents fees. It was to be brought in as a backstop to the proposals for new financial controls to replace profit and sustainability rules from 2025, with the new regulations akin to UEFA's squad cost ratio rule.

Sixteen clubs were in favour, but Aston Villa, Manchester City and Manchester United were against, with Chelsea choosing to abstain. A final decision will be ratified at the Premier League’s AGM this summer.

While seen by some clubs as a way to stop Man City from further strengthening their advantage when it comes to spending power through their mammoth revenues, could the introduction of such a measure be damaging to the Premier League in the long run? Neil Joyce, CEO of direct-to-fan data firm CLV Group, believes that the need for clubs to make their mark stateside is more important than ever given the financial controls coming down the tracks.

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Both Arsenal and Chelsea are to head across the pond this summer for their pre-season tours, and with interest in ‘soccer’, and in particular the Premier League, currently booming in the US, with the World Cup just two years away, the battle to win this popularity contest has well and truly begun.

"The new rules intend to balance what can be spent from top to bottom of the Premier League, and will ‘anchor’ the spending cap to a multiple of the amount of broadcast money earned by the league’s lowest club," Joyce said. "Given that the current Sky Sports broadcast deal with the English Premier League is relatively static and actually has decreased on a per-game basis, it does call into question the long-term robustness of using such a method.

"That means ultimately limiting or stunting the growth of the Premier League in terms of its competitiveness against other leagues around Europe, but also other sports and even other industries. Therefore, finding new fans in new ways via new propositions will become absolutely crucial to clubs moving forward.

"We know the US market is ready for Premier League clubs to win the hearts, minds, and wallets of undecided, unknown US fans - whether it’s through selling merchandise directly to fans or pursuing partnerships across other sports, collaborations with video gaming, music, and content creators.

"Miss this opportunity and we risk losing all of our momentum to the rising tide of organic growth of Major League Soccer, not to mention other European heavyweights like Real Madrid, Barcelona, PSG, and Bayern Munich."

Fans cheer during a game between Aston Villa and Fulham at Exploria Stadium on July 26, 2023 in Orlando, Florida.
The race is on to turn US audiences into fans -Credit:Kevin Sabitus/Getty Images for Premier League

The prospect of a ‘39th game’ has reared its head once more in recent weeks, with one NBC executive telling The Athletic that the network had been in dialogue with the Premier League over its potential in the future. The idea of a game being played overseas isn’t a new one, with Premier League club owners back in 2008 having voted on proposals before they were kicked into the long grass by 2011.

But with North American major leagues taking their wares on the road, such as the NBA at the O2 Arena, the MLB at London Stadium, and the NFL at Tottenham Hotspur Stadium, there has been more noise in recent months over the potential for the Premier League to do the same, with FIFA softening its stance, and Spain’s LaLiga sensing opportunity in the Premier League’s hesitancy to make the first move and take a competitive game to the US.

Last summer, New Jersey Democratic Governor, Phil Murphy, had commented that he would like to see regular season Premier League games in the US after Arsenal’s friendly clash with Manchester United attracted a huge crowd to the MetLife Stadium. Joyce believes that if clubs are to truly unlock the growth potential that exists within the US market then they will likely have to follow the plans of La Liga.

Data from the CLV Group suggests that 42 per cent of a potential 88 million-strong audience are undecided about who they wish to follow, meaning that as much as £150m is being left on the table by clubs.

"With many of the top Premier League clubs preparing to embark upon their U.S summer tour once more, they all know the opportunity is there for them,” Joyce added. "To progress, they must give US fans more access - and having competitive matches actually take place in the US would only be replicating the success seen by the NFL in bringing American Football to UK and European audiences.

"Simply put, it’s a transformative opportunity that cannot be missed."