New financial restrictions are designed to rein in player wages and encourage youth investment, but may increase ticket prices
Smaller clubs want to ensure that their increased broadcast income doesn't exclusively go into the pockets of players and agents (hence the wage controls) while the likes of Manchester United and Arsenal already must comply with Uefa's stricter FFP rules and want to guard against the emergence of new-moneyed challengers (hence the long-term rules limiting losses).
Since the seismic shock of Portsmouth's administration in 2010, the Premier League has tightened up its financial regulations and increased transparency. The new regulations have been presented as a further step on that journey – one that they are now able to take the clubs on in the name of enlightened self-interest.
From next season, clubs with total player costs of more than £52m (13 of the 20 according to latest figures) can only increase the total bill by £4m from their pot of additional TV revenue. The following season, they can add an additional £8m and another £12m in 2015/16. But additional money earned from commercial deals and match-day income can also be put towards the total – which could put pressure on the sensitive area of ticket prices.
Clubs can lose a total of £105m over a rolling three-year period, starting next season. Losses must be covered by owners and future funding guaranteed for the next three years – arguably the most significant measure as it will prevent clubs being left in the lurch with unsustainable wage bills. As with Uefa's rules, investment in infrastructure and youth development can be written off. The hope is that it will discourage short-term splurges and encourage more sustainable investment.
The Premier League argues that the £105m limit has been calibrated to allow ambitious clubs to invest to make it into Europe and challenge the elite. Once there they have to comply with Uefa's more stringent Financial Fair Play rules in any case.
The Premier League will rely on retrospective analysis of audited accounts and the future financial information already supplied by the clubs. Like Uefa, it has insisted that so called "related party transactions" will have to be set at a fair market value and can't be used to inflate commercial deals. It insisted that breaching the rules would bring stiff penalties, including points deductions.