Arsenal, Chelsea and Tottenham warned over Premier League plan for overspending clubs in FFP update

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Premier League set to bring in clearer sanction framework for overspending clubs -Credit:Catherine Ivill - AMA/Getty Images

The Premier League is poised to introduce a more transparent sanction framework as part of the new squad cost rules, according to information obtained by the Press Association news agency.

Clubs like Arsenal, Chelsea and Tottenham, that spend 115 per cent or more of their revenue on squad costs will face sanctions, but they will have a clearer understanding of potential punishments under the new framework. The existing profitability and sustainability rules (PSR) have faced criticism, particularly from Everton and Nottingham Forest supporters, due to the discretionary nature of sanctions for PSR breaches.

Those are determined by independent commissions based on presented mitigating and aggravating factors. In 2020, clubs, including Everton, rejected the introduction of a sanction framework for PSR, but it's understood that one is likely to be included in the new financial rules that clubs aim to approve at the league's annual general meeting on June 6. Factors influencing the severity of the sanction could include whether it's a first offence and the extent of the overspend.

Sporting sanctions such as points deductions will continue to be part of the framework. The rules on squad costs are set to restrict Premier League clubs from spending more than 85% of revenue on player and head coach wages, agents fees, and transfer amortisation costs. Clubs exceeding this figure but remaining under 115%, face a financial levy.

However, these regulations will aim to balance overspending by mandating a lower ratio after reaching the 'amber-zone', i. e. an 87% ratio could necessitate clubs meet an 83% limit at the next assessment point.

Despite requests for a comment, the Premier League remained silent. Premier League clubs are making efforts to ratify new rules as football's independent regulator continues its progression through Parliament.

Thus far, the Government has rejected calls to broaden the remit of the regulator to oversee the Premier League, the EFL, and the National League's financial competition rules.

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In a committee hearing discussing the Football Governance Bill on Tuesday, Premier League chief executive Richard Masters stood his ground saying: "The decision the Government has taken is that this is for football bodies to look after. I wouldn't support the regulator looking after those rules."

EFL chairman Rick Parry backed Masters' stance, adding: "I think it's the boundary of where football authorities deal with the rules that govern the competition.

"As Richard said earlier, part of the role of the PSR is competitive balance rather than the sustainability of individual clubs. There is an element of crossover but I do think that PSR, cost control rules should fall firmly with the leagues to operate."

Another key aspect of the Premier League's fresh financial regulations is the concept of anchoring, which could essentially set a strict limit on expenditure for wages, agents' fees, and similar costs. This cap would be pegged at a multiple potentially four-and-a-half or five times of the central revenue generated by the league's lowest-earning club.

A majority of the clubs have shown support for a deeper look into the anchoring idea. Following this, the league has embarked on a legal and economic review of the proposal and it's believed that talks with the Professional Footballers' Association (PFA) have started.

The PFA has expressed its intention to challenge any plans that resemble a rigid wage cap.