Three clubs remain on “amber” ahead of the Premier League’s deadline for announcing breaches of their financial fair play rules this week.
That is the view of financial experts who believe Chelsea, Manchester United and Aston Villa may have to limit January transfer business to comply in the future.
Why is this week significant?
As part of rules introduced to fast-track the process, clubs needed to submit audited versions of their accounts to the Premier League by 31 December as part of the league’s profitability and sustainability regulations (PSR).
If any club has breached the limit of £105m of losses over three seasons, they will find out by 14 January.
It is expected that the league will declare all 20 clubs fully compliant for this season, the first time in three campaigns that no club will be under investigation.
But sources have told The i Paper that anxiety around possible future breaches and complying with Uefa’s stricter financial fair play rules are feeding into a “flat January” with little or no major business expected this month.
Professor Rob Wilson, a football finance expert and programme director at the University Campus of Football Business, told The i Paper: “We look at it as a traffic light system and my calculations are Villa, United and Chelsea are all currently on amber.
“It’s not serious in terms of a breach and points deduction but I think it absolutely limits what they can do in January and before 30 June.”
The Wednesday deadline is seen as significant because it is the first chance to gauge the relative health of the division’s top clubs.
Is anyone at risk of a breach this year?
The i Paper can reveal that nine clubs have posted consecutive losses in their last two accounts. Those clubs are Manchester United, Villa, Everton, Liverpool, Crystal Palace, Fulham, Tottenham Hotspur, Wolverhampton Wanderers and Newcastle United.
In theory all nine could be in trouble but Professor Wilson believes that, unlike the last two years, “no one will be having sleepless nights this year”. He says the shock of seeing Nottingham Forest and Everton being charged and losing points in 2024 has had a “huge impact” on the way clubs choose to spend money.
The i Paper understands Newcastle, for example, are definitely not at risk following the £130m sale of Alexander Isak. They have substantial capacity to spend in January if they wish, although club chiefs are wary of the longer term impact of investing.
Will the ‘amber’ clubs pass?
Of the three on amber, Professor Wilson points to Villa’s issue with their wages to turnover ratio, which stood at 91 per cent, as a cause for long-term concern that still needs to be addressed. The sale of their women’s team for £55m in June, however, should see them avoid a breach.
Chelsea will have few worries given they announced a pre-tax profit of £128.4m last year. But Professor Wilson believes their £1.7bn spend on players since the BlueCo takeover is unsustainable at the current rate and will lead to a quiet January transfer window, even with new boss Liam Rosenior in place.
As for Manchester United, the club themselves admitted they were at risk of a PSR breach in a letter to supporter groups 12 months ago to justify a cost-cutting drive.
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“They’ve really pushed on cutting wages,” Professor Wilson says.
“Their average salary will be less than £200,000-a-week by the summer which will be one of the lowest wage to turnover ratings in the division. That doesn’t help them in January but in the next financial year it should.
“It’s ironic given the poor performance on the field but they’d be in really good shape next year if they get back into the Champions League.”
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