Premier League clubs will be docked points for overspending

Feb 8, 2013
Bill Mann

New spending rules include a limit on financial losses and a cap on TV cash spent on wages

ENGLAND'S top football clubs faces stiff penalties in future if they flout new financial regulations. The Premier League has threatened to dock clubs points if their total losses exceed £105m over the next three seasons. In addition, players' wage bills must be kept below £52m.

Richard Scudamore, the league's chief executive, claims the new regulations will rein in the wild and often reckless spending within the top echelons of the English game and introduce a new era of responsibility.

While not exactly in the same 'austerity' bracket preached by the present government, the new rules aim to force clubs into investing more in youth development and improving facilities as opposed to showering cash on mediocre players from the continent.

From the start of next season, clubs will be limited to losses of £105m over three seasons based on their audited accounts. However, money invested in youth development and infrastructure can be discounted from the auditors' calculations.

Clubs whose total wage bill exceeds £52m will only be allowed to increase their salaries by an accumulative £4m per season for each of the next three years.

However, the wage regulations apply only to the clubs' share of the £5.5 billion television income to be distributed next season: they will be allowed to to add to their wage bills from any profits earned from ticket sales or commercial deals.

As West Ham co-owner David Gold said: "It's not a salary cap, it's a restraint on over-spending. If clubs increase their revenues then they can increase their spending."

The new regulations are intended to ensure that English football cannot in future be dominated by a club with a wealthy sugar daddy, winning titles on the back of huge investment, as has been the case in recent years with Roman Abramovich's investment at Chelsea and Manchester City benefiting from Sheikh Mansour's millions.

The Guardian says that if the new regulations had been in place between 2008 and 2011 four clubs - Chelsea, Manchester City, Aston Villa and Liverpool – would have been penalised for running up losses of more than £105m.

In future, warned Scudamore, clubs that flout the rules will be hit hard, with financial penalties and points deductions.

When the regulations were put to the vote, 13 Premier League clubs were in favour, six were against and Reading abstained. According to BBC Sport, Fulham, West Brom, Manchester City, Aston Villa, Swansea City and Southampton all voted against. Chelsea surprised many by voting for the regulations.

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