Premier League could ‘abolish points deductions’ for ‘luxury tax’ as Man City await FFP outcome

Joe Williams
Pep Guardiola waves to Man City fans.
Pep Guardiola waves to Man City supporters.

The Premier League are considering the possibility of scrapping points deductions in order to introduce a ‘luxury tax’ on clubs, according to reports, as Man City await the outcome of their FFP case.

Both Everton and Nottingham Forest have been given points deductions this season, while Leicester City have also been charged by the Premier League with a breach of their Profit and Sustainabilty Rules despite not currently playing in the top flight.

No more points deductions in future Premier League seasons?

Clubs are usually allowed maximum losses of £105m over a three-year assessment period but this is reduced by £22m per season for any seasons within the period spent in the Championship.

Forest, who have appealed their four-point deduction, were particularly unhappy with the Premier League’s submission to the independent commission and claimed trust in the governing body had eroded due to their initial push for a stiffer sanction.

In a statement last month, Forest said they were “extremely dismayed by the tone and content of the Premier League’s submissions before the commission,” especially in light of the “exceptional cooperation” the club had given the investigation.

The commission which imposed the sanction noted Forest’s breach was “serious” and stated in its conclusion: “The four points sanction is not to punish Forest so much as it is to be fair to the other clubs; to give the public confidence that when a club invests as Forest did to compete in the Premier League, it still needs to comply with the PSR threshold for losses.”

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Everton had their points deduction reduced from ten to six points on appeal, while the Toffees are also waiting to see if a potential second points deduction will come their way.

But punishments of this nature could soon be a thing of the past with the Daily Mail claiming that the Premier League is ‘considering abolishing points deductions and introducing a ‘luxury tax”.

Many club officials ‘deem the league’s Profit and Sustainability Rules (PSR) not fit for purpose’ after the spotlight was shone or certain clubs this season.

‘There are also grave fears are that, under its current guise, PSR will see the Premier League fall from its lucrative position as the world’s best league because it will no longer be able to afford the best players on the best salaries.

‘Radical reform has been discussed among the clubs and an entirely new system could be voted in at the end of the season meeting in June. As many as 17 of the 20 clubs are thought to be leaning towards significant change. Fourteen clubs need to be in agreement to get a rule change through.

‘Some feel that the eventual six-point penalty dished out to Everton and the four handed to Forest were draconian and not reflective of why PSR was brought in.’

The Daily Mail add that clubs are considering other options to control the incredible amounts of money involved in the English game’s top league.

‘A ‘luxury tax’ has been considered, where those clubs who overspend will have a financial punishment which would increase the more they splash the cash. But clubs can choose to press on regardless if they wish.

‘The monies collected, which could run into the tens of millions, would then be redistributed to those Premier League who complied with the rules. It has been discussed that some of the fines could even go into an ’emergency fund’ to assist EFL clubs in financial danger.

‘Currently, such a tax features in America’s Major League Baseball and National Basketball Association, and relates to the amount spent on the salaries of the playing squad.’

It is unclear what impact that would have on unresolved cases with Man City charged in February 2023 with more than 100 breaches of the Premier League’s financial fair play regulations dating back to 2009.

The club could face a points deduction or even expulsion from the competition if found guilty but City have vociferously denied any wrongdoing and vowed to fight their case. It is unclear how long this process will take with some suggestions proceedings could run for several more years.

Man City ‘expulsion’ is ‘on the table’ for ‘the first time’?

And former Everton CEO Keith Wyness recently suggested that the 52-page document detailing the findings and reasons for Nottingham Forest’s four-point deduction suggests that “expulsion” is a possibility for Man City if found guilty of their 115 charges.

Wyness told Football Insider: “For the first time, I’ve noticed the word expulsion cropping up in the report from Nottingham Forest’s hearing.

“City must be noticing that for the first time, as well.

“We don’t know yet, and they’ve got every right to plead the case, but expulsion does seem to be on the table given the severity of what’s supposed to have happened.

“We’re yet to see the evidence, though, and we need to get it going sooner rather than later.”