Premier League salary cap: How it would work and why Chelsea and Man Utd would be in breach

Premier League salary cap: How it would work and why Chelsea and Man Utd would break it

The league will discuss introducing salary expense caps to protect its competitiveness at its AGM this week. But with Champions League profits set to rise by a further £1bn in 2024/25, the wealth gap is unlikely to close.

The Premier League is considering introducing a salary cap to protect its competitiveness.

At the end of a season in which Manchester City won the treble and the fifth league title in six years, the clubs will discuss proposals at their annual general meeting, which starts today.

As The Times first reported, a “pegging system” is proposed, introducing a rolling cap based on where teams finished the previous season.

And the idea came after UEFA President Aleksander Ceferin said in April that he would try to introduce a hard cap “as soon as possible” as the governing bodies would try to find ways to avoid that the gap between the superclubs is even greater. How will it work?

The idea is to tie the cap to the team’s finishing position from the previous season, a process known as “anchoring”. The cap would act as a revenue multiplier for the club at the bottom of the table and therefore with the lowest revenue.

For example, if the 20th-placed team earned £100m and the multiplier was double, then the teams would be allowed to spend a maximum of £200m on wages.

UEFA’s current rules state that only 70% of revenue can be spent on revenue, but they want to introduce tougher rules.

Will it be an effective way to level the playing field? It depends on where the multiplier is set. Taking those base numbers and assuming there is a £200m limit, Chelsea and Manchester United would currently be breaking the rules, but anyone from third-biggest Manchester City would be fine. According to the latest estimates available, six teams had wage bills above £100m and all but three of the Premier League teams were over £50m.

More relevant is the prize money available for those in Europe. City have raked in nearly £300m to achieve the treble this season and the sums for mere Champions League participation are such that a Premier League cap won’t be the only remedy for the competitive imbalance. When could there be?

Hard to say, but it would probably be introduced as a transitional phase to give clubs enough time to reconcile their wage costs. As with UEFA’s financial fair play rules, a larger cap can be introduced initially and then reduced over a three-season period.

And for that to happen, at least 14 clubs must vote in favour. The top clubs, which have the highest wages and much bigger revenues, are expected to resist the idea the most. Man City have collected almost £300m in prize money this season alone

What will the players do with it?

The vast majority will, of course, be totally against it. In April, after hearing about UEFA’s proposal, PFA chief Maheta Molango said the decision-makers were “creating a real problem” and the players were “rightly angry”.

As leagues talk about increasing revenue (UEFA expects the Champions League to generate an additional billion in revenue a year after the new, expanded competition format launches in 2024), frustration is easy to to understand.

Stars are being asked to play more games and some are starting to talk about their mental health suffering from the relentless strain and retiring early from international football to rest.

And a salary cap could mean owners end up making more profit because their payroll is capped. Todd Boehly has spent around £600m on his Chelsea side but now wants to cut costs on a bloated dressing room. (

“[Players] need to be treated as key stakeholders and be at the center of these conversations,” Molango said, introducing the stall for players early. “When players read that ‘everyone agrees’ with the cap on their salaries, I think they will rightfully get angry.

“Without proper engagement or consultation, players are continually being asked to play more and more games. New leagues are emerging and existing tournaments are expanding. All this generates more money in football.

“Capping the salaries of those who create the ‘product’ that others continue to benefit from is no solution to better financial management of leagues and clubs. Football officials will quickly create a real problem if they continue to treat players like that.”