Everton and Liverpool will find themselves impacted when it comes to how much they can spend on wages as new plans to introduce a salary cap in the Premier League are set to be discussed.
The Times reported on Monday that plans for a cap to try and keep the Premier League more competitive would be discussed at the League’s annual meeting later this week in Hampshire, with proposals centred around how much television money is paid to the team that finishes bottom of the league.
The ‘anchoring’ proposals would see wages have to fall in line with what the bottom team earned from broadcast rights, with clubs allowed to spend four times that sum, although the Times report states that the exact details have yet to be defined and will be discussed in more depth in the coming days. Such a proposal, the report claims, has opposition from some of the biggest sides in the League.
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While Southampton finished bottom of the Premier League this year, published figures from the League following the 2021/22 season, where Norwich City finished in last place, showed that the Canaries picked up £100.6m in TV money from the bumper deals that the League has in place both domestically and internationally. Should wage bills fall in line with that figure, at a multiple of four, it would mean that the limit would be set at £402.4m in terms of how much a club could spend. Manchester United were the closest to that figure with their most recent wage bill, which stood at £384m.
In Everton’s case, the 2021/22 financial year showed spend on payroll was at £162m, 40.2 per cent of the example of the allowed (based on the 2021/22 figures) wage spend. In Liverpool’s case that is much closer, with the Reds spending 91 per cent of that limit at present, although that wage bill included bonus payments made for on-pitch success and is likely to decrease when the 2022/23 financial accounts are made public early next year.
Spending controls on wages would come in a year on from proposals to tackle wage spend being introduced by UEFA. Those cost controls limit spending on wages and transfers to 70 per cent of club revenue, with clubs allowed three years to get to that point. The Premier League has looked at adopting a similar control but with the increase from 70 per cent to 85 per cent in a bid to stop aspirational clubs such as Newcastle United from having the ladder pulled up from them.
Liverpool owner John W Henry has previously spoken out on greater cost control being introduced in the Premier League, telling the ECHO in an exclusive interview back in March: “There are ever-increasing financial challenges in the Premier League.
“The league itself is extraordinarily successful and is the greatest football competition in the world, but we’ve thought for some time there should be limits on spending so that the league doesn’t go the way of European leagues where one or two clubs annually have little competition.
"Excitement depends on competition and is the most important component of the Premier League.”
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