Premier League spending cap: Newcastle United impact, pros/cons, potential FFP/PSR changes & more

Newcastle United CEO Darren EalesNewcastle United CEO Darren Eales
Newcastle United CEO Darren Eales | Getty Images
A seismic vote is expected to take place between Premier League clubs later today

Premier League clubs will vote later today on whether to introduce spending caps for the first time in the competition’s history. Here is a round-up of everything you need to know about the proposed measures and how, if introduced, they would impact Newcastle United going forward.

Background

An “anchoring” system is being voted on that would tie how much can be spent on transfers, wages and agent fees to the TV revenue of the division’s bottom-placed club. For example, Southampton finished 20th last season and their broadcast revenue was £103.6million.

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What remains unclear is the multiple of £103.6million that could be spent. Five times that amount has been mooted. This comes just weeks after Premier League clubs decided to align their FFP/PSR measures with the UEFA model, with an 85 per cent cost-to-revenue ratio being implemented.

These potential measures will run concurrently as an extra layer of protection, although some suggest they contradict the UEFA-synchronised system. Frustrations have been born in recent months regarding FFP/PSR following points deductions and a frugal January transfer window.

Newcastle impact?

Toon chiefs are understood to be leading the charge for a drastic overhaul. But why? Well, money makes the world go round…

Current FFP/PSR measures have frustrated the St James’ Park hierarchy. Amid a crippling injury list, they were unable to bolster their ranks in January despite boasting the deepest pockets in world football.

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The anchoring system, on paper, should greatly benefit Newcastle. Planet Football listed their wage bill at £84million for last season, with that figure only increasing slightly. 

Newcastle also spent £19million on agents fees - the eight-most in the Premier League. For context, Chelsea, according to the BBC, forked out a staggering £75million to player representatives. 

Assuming clubs are allowed to shell out five times the division’s bottom-placed club (£518million), using the anchoring model, the Magpies could have spent a further £292million on transfers, wages and agent fees last summer than what they did. If this vote passes, the Saudi-backed takeover becomes supercharged.

The objectors?

Unsurprisingly, the traditional “big six” are thought to be opposed to the changes. The Telegraph claim Sir Jim Ratcliffe at Manchester United is vehemently against the idea of introducing a de facto spending cap.

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That perhaps comes as no surprise as the Red Devils top the wage bill charts at a staggering £205million. Chelsea, down to their lavish spending spree since Roman Abramovich’s exit, are the only club that would have breached the anchoring model if implemented over the past 12 months.

Manchester City are reportedly expressing concerns about whether the changes would breach UK Competition law. Arsenal are £192million under the proposed spending cap but, given the positive impact on clubs lower down the table, their motive remains unclear until today’s vote.

How will the vote be passed?

As per Premier League rules, a 14-club majority must be secured. Today’s shareholders’ meeting will involve a vote in principle and, if passed, further talks ironing out the size of the cap will take place ahead of the Annual General Meeting (AGM) in June.

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