Representatives from Premier League clubs met yesterday to discuss changes to Financial Fair Play (FFP) and Profit and Sustainability Rules (PSR).
Substantial changes to the current £105million limit were discussed as well as aligning with UEFA’s squad cost ratio system.
The UEFA system limits clubs to spending 70 per cent of their revenue on squad costs – transfers, wages and agents’s fees.
For example, if a clubs turnover is £900m per year, they would be able to spend 70 per cent of that – £630m a year on player costs.
In Newcastle’s case, the club had a turnover of £250m in 2022/23, meaning they could spend £175m on player costs.
In the long run with more sponsors and revenue, the figure will increase for the Magpies. But in the immediate future clubs like Manchester City and Chelsea will still be able to spend much more due to their existing revenue streams.
The meetings are set to continue today, but as it stands nothing no decision has been made to change the FFP and PSR rules. For the changes to be put in place, 14 Premier League clubs will have to vote in favour of them.
A better proposal for FFP changes could consider a more flexible model that adapts to different clubs’ financial realities while promoting competitive balance. This might include a tiered spending system based on revenue brackets, allowing smaller clubs more growth opportunities without risking financial instability. Additionally, incorporating incentives for developing home-grown talent and investing in community and sustainability projects could promote healthier club ecosystems. This approach balances financial fairness with the need to foster competitive leagues and ensure the long-term health of football clubs.
Ronald Deo(Quote)