Arsenal, Chelsea and Tottenham Hotspur are set to be affected by UEFA’s proposal to replace Financial Fair Play (FFP) rules with a salary cap and luxury tax.
Under current FFP regulations, which were introduced 11 years ago, clubs competing in any European competition must balance the books over a three-year period.
But the continent’s governing body is plotting a drastic change which will be announced next month and come into force next year.
That’s according to The Times, who have reported all clubs participating in European competitions would see their spending on salaries limited to a fixed percentage of their revenue in the region of 70 per cent.
Furthermore, the report states that any clubs breaching the cap would then have to pay a Euro into a fund distributed to the other teams in that competition.
If the cap is breached the next year, the repeat offenders would pay €1.50 (£1.28) or €2 (£1.70) for every €1 (£0.85) they have gone over, depending on the scale of the breach.
Meanwhile, repeat offenders would also face possible sporting sanctions, up to the ultimate punishment of disqualification from European competition, as UEFA believes there still needs to be a strong deterrent to stop clubs from overspending.
There is also an idea of having one fixed salary cap at a very high level, for example €600 million (£509 million), alongside the percentage of revenue to stop the elite clubs inflating their income to ridiculous levels via related-party sponsorship deals.
The salary cap as a percentage of revenue would potentially have a similar effect as those clubs with the bigger revenues can spend more on wages, but it would be more flexible and would at least allow owners to breach the cap if they were prepared to pay for it.
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If the change was to have taken place this year, Arsenal would not have been affected.
That is because the Gunners are not in any form of European competition in 2021/22 as a result of finishing eighth in the Premier League last season.
But if Mikel Arteta can lead his side back into the top-seven in the upcoming campaign then they will be affected by UEFA’s proposal to replace FFP rules with a salary cap and luxury tax.