Premier League ‘considering’ new financial rules set to impact Newcastle United, Man Utd & co

The Premier League could introduce new financial rules, including a ‘luxury tax’, to combat issues laid by their current Profit and Sustainability Rules. As it stands, Premier League clubs are not permitted to lose more than £105m over a rolling three-year period with any breaches of that punishable by points deductions.

Everton and Nottingham Forest have both been handed points deductions this season with the Toffees facing further punishment for a second breach. A clamp down on PSR breaches meant clubs across the division had a very quiet January transfer window with spending massively down across the board.

Changes to PSR are set to be introduced in June with an adoption of UEFA rules limiting clubs to spending 70% of revenue on transfers and wages, a possible option for clubs. However, according to the Mail, Premier League clubs are instead considering abolishing points deductions and instead implementing a ‘luxury tax’, as seen in the NBA.

This ‘luxury tax’ would see clubs that overspend receive a financial punishment - one that would then be shared around those clubs that stay within the guidelines. Under this proposed system, clubs would then be free to spend however much they feel appropriate, but any fines would then trickle down to other clubs in the Premier League. The Mail also report that clubs are considering a vote to reverse a ruling on related-party transactions.

Under the current rules, clubs like Newcastle United, Aston Villa and Wolves face potentially selling some of their key assets in order to comply with PSR and ensure they do not lose more than £105m over three years. With Everton and Forest already falling foul of these rules, pressure from clubs to change them is growing and new financial regulation could be introduced at the Premier League’s AGM in June. 

In order for any new financial regulation system to be imposed, 14 of the 20 Premier League clubs would have to vote in favour. A ‘New Deal’ for the EFL is also still to be agreed with June now seemingly a key month in shaping what the future of professional football in England will look like.