This is why Newcastle United and the 19 other Premier League clubs are meeting in London on Thursday

Premier League clubs still have the option to vote through new financial rules on Thursday despite the threat of legal action from the Professional Footballers’ Association if they do so.

The 20 top-flight teams will gather for a meeting in central London on Thursday to discuss, and potentially vote on, a new system to replace the existing profitability and sustainability rules (PSR).

Two new mechanisms are under consideration. The first are the squad cost rules (SCR), which would limit clubs to spending no more than 85 per cent of revenue on squad-related costs, similar to the approach already taken at European level by UEFA where clubs will be limited to spending 70 per cent of revenue on squad costs from next season.

The second is top-to-bottom anchoring (TBA) which would effectively create a hard spending cap by limiting squad-related spending to five times the amount received in central league income by the Premier League’s bottom club.

The PFA’s lawyers warned their Premier League counterparts last week they would commence legal proceedings if the new rules were voted through, and/or if they failed to receive a written undertaking from the league to properly consult on the rules, which the union believes will have a material impact on players’ wages. The Premier League pushed back strongly against the PFA’s claims that it had not consulted properly, and is understood to have responded to the PFA letter to the league’s lawyers.

Last March, Manchester City, Manchester United and Aston Villa all voted against a further exploration of TBA. The Manchester clubs have expressed concerns that a hard cap would impair their ability to compete for top talent with their European rivals. The argument in favour of anchoring is that it protects competitive balance at a time when European and global competitions are expanding, allowing the top clubs to further stretch their revenue.

Clubs spoken to by the PA news agency have expressed nervousness around both mechanisms, and there may be a reluctance to change any rules related to revenue on Thursday while Manchester City’s challenges to the associated party transaction (APT) rules remain ongoing. Premier League chief executive Richard Masters wrote to clubs last week to inform them about City’s latest challenge, which is centred on amendments to the APT rules voted through last November.

The league and City are also awaiting clarification of an earlier verdict given by an arbitration panel last October on the APT rules. The panel found aspects of the rules unlawful. City’s position is that all the APT rules are therefore void, whereas the Premier League argues that the ruling required discrete elements of the rules to be remedied, which it believes has now been achieved.

The APT rules are designed to ensure that commercial deals – now including shareholder loans – linked to a club’s owners are done for fair market value. Clubs will also discuss football matters, with semi-automated offside technology (SAOT) still set to be introduced at some stage this season. The technology was originally due to be brought in after one of last autumn’s international breaks but those deadlines came and went.

However, the league’s chief football officer Tony Scholes said last week that “significant progress” had been made with the technology supplier Genius Sports and that the intention was still to introduce it this season.

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