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Deals & Investments June 12, 2023
Shlomo Sprung
Shlomo Sprung

Why the Premier League Is Mulling a Salary Cap

Raphaël Varane and Bruno Fernandes of Manchester United give chase to Erling Håland of Manchester City during the FA Cup Final match between Manchester City and Manchester United at Wembley Stadium on June 03, 2023 in London, England. (Photo by Robin Jones/Getty Images)
Last Updated: July 1, 2023
The proposed English Premier League salary cap would be tied to four times the last-place team’s TV revenue.

The gap between the haves and have nots are greater in European soccer than in any other sports league on Earth, but the Premier League is considering a salary cap to perhaps change that.

PL teams are reportedly considering a spending cap called “anchoring,” which would be tied to how much TV revenue goes to the last place club, according to a bombshell Monday report from The Times of London.

Manchester City won their third straight Premier League title this past season, giving them five of the last six domestic championships and bringing a predictability or certain sense of inevitability that may not be popular globally.

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The Times reported that a cap could be four times larger than the last place team’s revenue, but several more competitive balance ideas will be discussed ahead of the league’s annual meetings this week. Relegated Norwich City received £100.6 million for finishing last in 2021-22, which would’ve put the wage cap at £402.4 million. The highest-spending team that season was Manchester United at £384 million, meaning it wouldn’t have acted as a real deterrent in that scenario. This remains an inexact science.

The four UEFA Champions League teams from this past season, Manchester City, Liverpool, Chelsea, and Tottenham, reportedly earned between £70 and £115 million in extra revenue. City and Chelsea have already qualified for a new expanded Club World Cup format starting in 2025, having won UCL titles in the last three years — with City defeating Inter Milan for the crown on Saturday — which could bring in an additional £30 million.

This talk of anchoring comes amid a potential UEFA plan that would limit teams playing in European competitions like the Champions League, Europa League, and Europa Conference League to spending 70% of a team’s revenue on salaries and transfers. The Times says the Premier League is considering a similar proposal that would set that number at 85%. Perhaps the Premier League sees what a salary cap in the NFL has done for its parity and popularity, or maybe it wants a more competitive season. Either way, change could be coming to English football in a meaningful way.

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Shlomo Sprung

Shlomo Sprung is a Senior Staff Writer at Boardroom. He has more than a decade of experience in journalism, with past work appearing in Forbes, MLB.com, Awful Announcing, and The Sporting News. He graduated from the Columbia University Graduate School of Journalism in 2011, and his Twitter and Spotify addictions are well under control. Just ask him.