Premier League clubs vote to limit spending

Ben Hoskins

It's been mooted for a while but finally the 20 Premier League clubs have agreed on measures to limit spending, though whether the proposals that have gone through are a good or a bad thing for Reading in the ong-term remains to be seen.

First of all, financial fair play rules are already in place for the Championship and for clubs hoping to enter European competition so this is a logical step by the Premier League.

However, at first glance this won't have too much of an impact on an already well run club such as Reading. Early reports suggest that clubs will still be able to run up a loss of over £100m in a three year period, figures that still dwarf anything Reading have ever put out. In recent memory the most we've lost in a single season is well within the £10m mark and we've actually turned profits in our two previous Premier League seasons.

The most positive news is that clubs have agreed a limit on wages, though again what these limits are we can't be sure*(see edit below). Again it's unlikely to see Chelsea or Arsenal forced to pay it's best players anywhere near as low as what Reading must be paying out but it should stop a fellow minnow blowing us out of the water by gambling on their financial future.

We can only speculate but at the moment around the specifics but these spending/debt limits would seem to be related to income, so in the short to medium term, this this could all but shut the book on Blackburn style fairy-tales where a rich owner comes in and transforms a small club into title challengers. The income levels of the likes of Manchester United dwarf anything Reading could hope for and that's why Anton Zingarevich's long-term plans to grow the club, as mentioned in his interview with Jonny Fordham, will become even more important.

The positive side of this is obviously to stop less responsible owners getting their clubs into a Portsmouth or Leeds situation. Talk of points deductions is a good step but how exactly these rules will be monitored/enforced will be crucial if they are to work. This will help the smaller teams all keep on a level footing and will help stop ridiculous spending that we've seen from just down the M4 at Loftus Road.

It's not the complete answer to some of football's financial problems but it's a good first step.

EDIT:

More details have since come out about the agreement which was only narrowly passed by a vote of 13 for, six against and one abstention, which as it happens was from Reading. Reading's reason for abstention is unclear, but the fact that Southampton, Fulham, Villa, Swansea, Manchester City and West Brom voted against these proposals demonstrates that they are far from universally supported and could lead to a whole new set of problems. Those problems have been mentioned above, particularly with regards to clubs making significant strides forward in a short time frame. Southampton, Fulham and Manchester City have all befitted greatly from large investment from ownership, something that would be curtailed under the new system.

Under these new rules, clubs with a wage bill of over £52m will only be allowed increments of £4m a season over the next three years. However, those wage rises are only in terms of what you can spend TV money can be spent on. For example, if Reading pick up an extra £10m from a commercial sponsorship deal, they'd then be allowed to increase their wage bill by an extra £10m on top of that £4m... still with me?

Again that's fine if you're Manchester United and sign a big new shirt deal, but for a club like Reading it means they can't go and transform a squad overnight, which is a good or bad thing depending on how you want the club run and how much money you believe Anton actually has. There's also a lack of clarity at the moment into how any extra commerical revenue will be monitored. For example, could Zingarevich simply name himself as a £50m a season shirt sponsor, or label the stadium 'The TSI Bowl'?

As for the penalties? Talks of points deductions are encouraging but again until we know how/when they'd be implemented it's hard to make significant comment.

Generally these extra details do nothing to change my original feelings on the issue. They're a good set of measures to protect clubs from overspending and should stop another Pompey situation from happening. However, they put another nail in the coffin of any club hoping to come out of obscurity and challenge for the top honours.


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