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Reportedly, what is the Premier League’s new spending cap and how does it involve Manchester City?

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Premier League clubs have reportedly taken a significant step towards leveling the playing field by agreeing in principle to introduce a spending cap to bridge the financial gap between the top and bottom sides in the English top flight.

According to reports, clubs will be restricted to spending a multiple of the amount of money accrued in television rights by the lowest-earning club in the Premier League. This “anchoring” plan will be capped at five times the amount received by the lowest-earning side through the league’s broadcast deals, which was reported to be £104 million ($130 million) for Southampton last season.

While the plan has received at least 14 votes from the 20 clubs necessary for approval, defending champion Manchester City, Manchester United, and Aston Villa are among those who have reportedly rejected the proposal. Chelsea, on the other hand, is said to have abstained.

If approved at an annual general meeting in June, the new spending cap model will replace the controversial Profit and Sustainability Regulations (PSR) from the 2025-26 season. Everton and Nottingham Forest have already faced point deductions this season due to breaches of the PSR, which limits clubs to losing only £105 million over a three-year period.

Critics of the spending cap fear it could hinder the Premier League’s status as the richest and most watched league in the world. However, proponents argue that limiting spending is necessary to maintain competitive balance, especially with the increasing revenue from the Champions League and the financial power of state-backed clubs like Manchester City and Newcastle.

Premier League clubs have also agreed to adhere to UEFA’s new financial fair play regulations from 2025/26, limiting spending to 85 percent of their total revenue on wages, transfer payments, and agents’ fees.

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