- Agencies oppose top-to-bottom anchoring and squad cost rules
- TBA would set a hard cap on how much clubs can spend on players, potentially limiting agencies’ earning power
- Clubs to vote on proposed financial rules on 21st November
The Premier League could be sued by leading soccer agencies if it introduces new financial rules, including top-to-bottom anchoring (TBA).
Clubs in the English top tier are set to vote on TBA at a meeting on 21st November, a move which would cap the amount any club could spend on their squad at five times the smallest central Premier League broadcasting and prize money payout.
TBA is designed to promote competitive balance within the league by reining in the richest clubs, but Manchester City, Manchester United and Aston Villa are understood to have voted in April last year against further exploration of the idea. Opponents say TBA creates a salary cap.
Now three of the biggest agencies in the English game, CAA Base, CAA Stellar and Wasserman have made their positions clear.
In letter from leading law firm Clifford Chance, the three agencies have accused the Premier League of failing to consult them on the changes, according to The Athletic.
The trio also oppose squad cost rules (SCR), which would limit clubs to spending up to 85 per cent of their soccer-related revenues on squad-related costs, such as first-team wages and agents’ fees. Those that go over 115 per cent would be subject to sanctions such as points deductions.
The Premier League has previously said it had consulted the soccer industry on its proposed changes to the current profitability and sustainability rules (PSR) rules for at least 18 months, including sharing information with top agencies, including the three that have issued the legal threat.
The Athletic reports that Premier League clubs paid combined agents’ fees of more than UK£400 million (US$527 million) last year, but the agencies have acted to oppose a set of rules that could curb their earning potential.
They are the latest group to oppose TBA, joining the Professional Footballers’ Association (PFA), which has enlisted Nick De Marco KC to support its legal challenge.
There is also reportedly growing unease around TBA from the sort of middle to lower-ranking clubs who might, at face value, support a concept that would limit the spending of the big clubs.
According to PA, sources close to the discussion around the league’s new financial regulations say “credible concerns” are growing among clubs as the vote gets closer, with the prospect of a similar spending cap in the English Football League (EFL), which governs the three tiers below the top flight, seen as a worry by some.
Relegated clubs in receipt of parachute money fear finding themselves “at the other end of the scale” in the Championship if their spending was suddenly tied to the earnings of the bottom club in the second tier.
There is also the threat of a club or clubs taking their own action under competition law. A common view among clubs is that, although the Premier League’s revenues far exceed those of other leagues, the proposed changes would disadvantage English clubs compared to other Europe’s heavyweights, who would not be subject to a hard cap such as TBA.
Sources believe the anchoring proposal will be dropped before the meeting or fail to gain sufficient support in a vote, but there is much less certainty over whether clubs will vote to stick with the existing PSR or replace them with SCR.
Opponents of SCR believe it risks creating a stronger correlation between success and revenue, with the feeling being that PSR aligns better with the three-year player development cycle for those who rely heavily on investing in promising players and then selling them at a profit.
Manchester City and Manchester United are among at least half a dozen clubs, and perhaps as many as nine, that intend to vote against TBA at the shareholders’ meeting, according to The Athletic. This would kill the proposal as Premier League rule-changes need a two-thirds majority of the clubs to back them.
If proposals to introduce SCR also fail to get a two-thirds majority, that would leave PSR in place despite its unpopularity among clubs.
The Athletic adds that the Premier League is also proposing a third measure, known as sustainability and systemic resilience (SSR). This would require clubs to maintain enough working capital to cover all their bills for the season, with an additional buffer for unexpected fluctuations in revenue. Although less controversial, it is still not universally popular – and there would be little value in introducing it without the other proposed changes.
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