Premier League Curbs Soccer Club Spending, Sets Sanctions

England’s top soccer clubs agreed to a plan requiring them to restrict player costs or face point deductions and other sanctions.

The proposals for the 20-team Premier League were provisionally approved yesterday by a vote of members. The new rules, designed to improve the financial sustainability of clubs, would require them to curb spending from next season, limiting the loss each can make to as much as 105 million pounds ($165 million) aggregated over three years.

Officials also agreed on a cap on player costs proposed by Sunderland owner Ellis Short. It limits clubs with a wage bill of more than 52 million pounds this season to an increase of 4 million pounds. That will go up to 8 million pounds for teams with player costs of more than 56 million pounds in 2014-15, and to 12 million pounds for 2015-16 for those spending more than 60 million pounds. Teams can surpass that amount provided they pay for it with gains from commercial and match-day income.

Clubs that breach the new rules “will be subject to a disciplinary commission,” Premier League Chief Executive Officer Richard Scudamore told reporters in London. “There is an absolute prohibition of losing more than 105 million pounds over three years.”

Should clubs breach that amount, “we’ll be looking for the top-end ultimate sanction range,” including point deductions, Scudamore added.

TV Money

The rules come ahead of the start of a record television agreement worth about 5 billion pounds over the next three seasons, cementing the Premier League’s position as the richest in soccer. Broadcast income has allowed teams such as 19-time champion Manchester United, Manchester City and Chelsea to attract foreign owners and some of the top players in the world, including United’s Robin van Persie and City’s Carlos Tevez.

City, Chelsea and Liverpool would have exceeded the permitted losses if the last three years were to be taken into account, according to the most recent published accounts.

Most teams will be trying to meet so-called financial fair play regulations put in place by European governing body UEFA. Those more stringent rules aim to reduce debt and prevent teams from spending above their means. Those that fail to meet targets face sanctions including suspension from the region’s Champions League and Europa League competitions.

Although Scudamore didn’t want to comment on the actual voting, he said the Premier League proposals “got the regulatory constitutional majority, but it wasn’t unanimous.”

Thirteen of the 20 clubs voted in favor of the financial controls, with six against and Reading abstaining, the British Broadcasting Corp. reported.

Wages Curbed

The newly agreed spending limits, which will have to be ratified by the clubs in April, “won’t cut spending, but will reduce the amount of increases in spending,” he said.

When asked if the new rules would curb spiraling player wages, Scudamore said “in some ways, it will, yes.”

U.K. Minister for Sport Hugh Robertson said he was pleased that clubs came to an agreement.

“The government has been clear that we want clubs to be on a secure financial footing for the longterm health of the game,” the minister said yesterday in a statement. “This is a welcome and positive move.”

To contact the reporter on this story: Danielle Rossingh in London at drossingh@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net

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