Premier League clubs concerned over spending cap being adopted in Championship

A growing number of top-flight clubs are concerned measures to cap squad spending in the Premier League might ultimately be adopted in the Championship.

Clubs are set to vote on top-to-bottom anchoring (TBA) at a meeting on November 21, a move which would cap the amount any club could spend on their squad at five times the smallest central Premier League broadcasting and prize money payout.

TBA is designed to promote competitive balance within the league by reining in the richest clubs, but Manchester City, Manchester United and Aston Villa are understood to have voted in April last year against further exploration of the idea. Opponents say TBA creates a salary cap.

The Professional Footballers’ Association (PFA) is opposed to the idea and has enlisted Nick De Marco KC to support its legal challenge.

There is also understood to be growing unease around TBA from the sort of middle to lower-ranking clubs who might, at face value, support a concept that would limit the spending of the big clubs.

Sources close to the discussion around the league’s new financial regulations say “credible concerns” are growing among clubs as the vote gets closer, with the prospect of a similar spending cap in the EFL seen as a worry by some.

Relegated clubs in receipt of parachute money fear finding themselves “at the other end of the scale” in the Championship if their spending was suddenly tied to the earnings of the bottom club in the second tier.

EFL chairman Rick Parry has spoken in the past about the inequalities he believes parachute payments have created in the Championship, and would surely have to be an option for the EFL if the measure survived legal scrutiny at Premier League level.

Another concern for clubs is that threat of litigation around TBA. The PFA seems certain to act if it was introduced, with its lawyers having previously warned the Premier League it would be in “flagrant breach” of rules requiring it to consult.

There is also the very real threat of a club or clubs taking their own action under competition law.

Sources believe the anchoring proposal will be dropped before the meeting or fail to gain sufficient support in a vote, but there is much less certainty over whether clubs will vote to stick with the existing profitability and sustainability rules (PSR) or replace them with the new squad cost rules (SCR).

The latter are designed to bring Premier League clubs into closer alignment with UEFA regulations and have been on trial in shadow form since the start of last season.

At European level, clubs can only spend up to 70 per cent of revenue on squad-related costs. The Premier League proposal is to introduce a limit of 85 per cent for those not involved in European competition, with clubs going over 115 per cent, subject to sporting sanctions such as points deductions.

Opponents of SCR believe it risks creating a stronger correlation between success and revenue, with the feeling being that PSR aligns better with the three-year player development cycle for those who rely heavily on investing in promising players and then selling them at a profit.

A handful of clubs are believed to already be opposed to SCR, although the newly-promoted clubs may favour it.

That is because their PSR calculations will only allow a maximum of £13million losses for any season in the Championship, something which would in effect be wiped out if SCR was voted through.