A new cap on player spending is set to replace the Premier League’s Profitability and Sustainability Rules.
Clubs voted unanimously to agree in principle to introduce a major shake-up which would bring in cost control ratios, meaning Prem teams can spend a maximum of 85 per cent of their turnover on play-related costs which includes transfer fees, wages and agent fees.
It comes as Sheffield United became the latest club to fall victim to a potential points deduction as they will be docked two points if they are relegated to the Championship for defaulting on payments to other clubs in their 2022/23 promotion season.
Everton have been docked a total of eight points after being twice found guilty of breaching the current PSR rules. Nottingham Forest say they will appeal after being docked four points.
The current PSR system - which allows clubs maximum losses of £105m over a three-year period - has caused major controversy and also led to a quiet January transfer window because teams were scared to spend for fear of breaking the rules.
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They have been seen as outdated, out of step with inflation and do not allow clubs on the way up to spend to try and challenge the Premier League elite.
Everton have been left furious as they are trying to build and finance a new stadium while trying to balance the costs of maintaining a competitive squad.
The Premier League sees PSR as a way of ensuring competition rather than allow mega-rich owners to buy up the best players.
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Sheffield United have been hit with a two-point deduction (Getty Images)The cost control ratio system is currently used by UEFA and allows teams in European competition to spend up to 70 per cent of their revenue on players.
The Premier League have yet to thrash out the finer details of the new PSR system but hope to have it in place for their AGM in June. Any new system will be brought in next season but will shadow the current PSR for 12 months to allow a transition period.
Clubs insist they cannot agree to a new financial support deal for the EFL until they know their budgets for PSR and there has been a stand-off.
Sheffield United said in a statement: “While disappointed to have the deduction imposed upon the return to the EFL and highlighting that awaiting overdue monies from several other clubs affected Sheffield United’s financial situation, the club took the view that it was better to reach an agreement which minimised the risks of a higher deduction or further transfer embargoes being imposed, and being distracted by lengthy and costly legal proceedings.
“The club is now in a position to close this matter and concentrate on the future.”
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