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How can Premier League spending be curbed?


The Premier League is holding discussions with its clubs about how excessive spending can be curbed. There is a general willingness to do something, given cumulative losses of £380m in 2010-11.   The difficulty is that different clubs have conflicting interests, making it difficult to arrive at a consensus position.   Any proposal requires the agreement of 14 out of 20 clubs to come into effect.

For example, clubs like Fulham and Wigan Athletic are not happy about the domestic adoption of a full financial fair play model.   This would curb benefactor spending at smaller clubs and do nothing to offset the dominance of the likes of Chelsea and Manchester City.

One proposal under discussion is to extend from one year to five the period of future financial information clubs have to provide to the Premier League.  This would require clubs having to guarantee they can meet the costs of players' contracts.

There is also a proposal for owners to sign guarantees covering any liabilities should they decide to give up their clubs.   But in practice, despite forecasts to the contrary, benefactors 'walking away' has not really been a problem.  

Where there has been a difficulty is benefactors not having the money they claimed to have, or the money disappearing through changed circumstances.   This has been more of a problem at lower levels, Truro City being the latest example, although Portsmouth is a higher level example in the minds of many.   But guarantees would be worthless if the guarantor no longer had any money.

Sunderland wants a 'player cost protocol' whereby clubs agree to limit salary increases to no more than 10 per cent a year.   This is a more realistic proposal than the idea put forward by West Ham co-owner David Gold that increases should be limited to the range of inflation.

Of course, the Premier League has to be careful about damaging the product.  If salaries are restricted too much, it will become more difficult to attract the world class players that give the Premier League its international appeal.

Reasonably enough, the Premier League is adopting a very cautious approach.    It is starting with what in effect are two 'brainstorming' sessions with clubs divided on a north-south basis with the southern clubs coming first.   It is going to be a long process.