Premier League owners, including Roman Abramovich and the Glazer family, are close to agreeing a crackdown on players’ wages.
Talks have already taken place between all 20 top-flight clubs about introducing their own version of financial fairplay and a formal outline could be agreed later this month when Premier League chairmen meet in London on November 15.
There is a growing desire among the Premier League’s international owners to keep a big slice of what could be £5billion from the new television deals that start next year, rather than see it all go to players and their agents.
They are about to agree new rules on ‘wage restraint’, prohibiting clubs from increasing their wage bill by more than five per cent annually. Clubs spent £1.5bn on wages in 2010-11, 69 per cent of their income, and they had debts of £2.4bn, more than the amount they brought in.
Among the more radical proposals is that member clubs should be made to break even, something that even UEFA’s fairplay rules do not insist on. And West Ham chairman David Gold wants a points deduction for those whose debt exceeds a certain level of turnover.
Significantly, there is a will among even the richest owners — Abramovich at Chelsea and Sheik Mansour at Manchester City — to stop making huge losses. And the new breed of American owners — John W Henry (Liverpool), Ellis Short (Sunderland), Stan Kroenke (Arsenal), the Glazers (Manchester United) and Randy Lerner (Aston Villa) — are desperate to see a return on their investment.
Premier League clubs made cumulative losses of £361million, according to figures for 2010-11, with City (£197m), Chelsea (£68m), and Liverpool (£49m), most in the red.
An historic agreement by clubs would mark the end of escalating salaries enjoyed by elite players since the Premier League began in 1992. And that would be welcomed by ordinary fans who feel the gravy train has created a generation of stars who are out of touch.
By using ‘wage restraint’ rather than ‘wage cap’, club bosses hope changes will be palatable to the Professional Footballers’ Association.
The average wage for a Premier League player was £1,755 a week 20 years ago but had risen to nearly £35,000 per week in 2010.
Since then, it has gone up again, with United agreeing packages of more than £200,000 a week — more than £10m a year — for Wayne Rooney and Robin van Persie. And there are fears that players will want even more after the three-year deals secured by BT Vision and Sky.
An insider said: ‘There is a consensus from nearly every club that something needs to happen before the new TV deal takes effect next season. It doesn’t make sense for clubs to carry on losing money when so much revenue is being generated. It’s looking likely some form of agreement will be found.’
Executives from all top-flight clubs met in September in three regional meetings. But the get-together in 11 days is the first real chance for formal progress.
Fourteen of the 20 clubs have to agree to a new rule and it is believed only Fulham are explicitly against any form of financial fairplay, with chairman Mohamed Fayed worried the restrictions would deter a potential buyer in the future.
UEFA FFP rules allow clubs to make losses of €45m over three years. Many would like it to be compulsory for clubs to break even but a compromise might have to be reached.
Clubs like City, who have invested hugely since a takeover in 2008, would be given time to meet requirements and newly-promoted clubs would also be given dispensation on the five-per-cent wage rule.
With negotiations at a delicate stage, most chairmen are reluctant to go into too much detail, but West Ham’s Gold was candid for the website, Huffington Post.
‘We need to regulate spending, reduce debt and ensure profit — and quickly,’ he said. ‘We have to stop clubs running up debt or we’ll have an even more desperate situation. We can’t have clubs running with large percentage of debt against their turnover.
‘The lower leagues have implemented new regulation, and the Premier League must do the same.
‘I would propose that there is a robust and clear debt cap — enforced by a transfer ban on incoming players or a points deduction.
‘Of the bottom 12 clubs in the PL most will lose money and three will be relegated. But with proper governance, those 12 clubs, including the three to be relegated, could make £100m. It’s infinitely more desirable to get relegated having made £10m than having lost £10m.’