Premier League spending cap: Clubs vote in favour of developing plans

Football finance expert Adam Davis believes that the proposed spending cap would allow clubs like Newcastle and Nottingham Forest to spend the amount they feel they need to in order to be competitive, but could also push some teams to financial breaking point.

“We don’t know the ins and outs of what the spend cap will include but our understanding is that the amount that is allowed to be spent is likely to be on player wages, amortisation and agent fees,” said Davis.

“That will be a fixed total based on the lowest amount of broadcasting money received in the Premier League, so whatever is earned by the 20th club. Over the last few years that has basically meant approximately £100m-worth of broadcasting income, that is what the likes of Sheffield United will earn.

“The spend cap will be a hard multiple, and the rumoured amount is five times that amount, which would basically mean a spend cap of approximately £500m.

“From a good perspective, that will open up the likes of Aston Villa and Newcastle to spend more than what they currently have because under the current regulations it is tied to their own revenues.

“It would also mean under a new regulation, teams like Nottingham Forest could spend what they want to spend, or claim they need to spend, to stay competitive.

“A potential negative is that spending will increase in the Premier League to potentially unsustainable levels.

“The danger is that by saying you are able to spend more, it could be interpreted as you must spend more to remain competitive. We could potentially see more and more clubs pushing to breaking point.”