According to recent financial accounts released by Premier League clubs, Liverpool paid out more on player wages last season than Manchester City, with their wage bill increasing by 75% since 2017.
Manchester United paid out the most on wages among the ‘big six’ clubs in the 2021-22 season, with a total of £384m, followed by Liverpool with £366m, and Man City with £354m.
Chelsea’s figures for last season are yet to be released, but they paid out £333m on wages in the 2020-21 season.
Tottenham paid out more on player salaries than their north London rivals Arsenal, with a 66% increase from £127m in 2017 to £209m last season, while Arsenal’s increase over that same time is just 5.6% from £195m to £206m.
You will often hear pundits tell you that a club’s wage bill is an accurate gauge of where a club will finish in the Premier League, i.e. if you have the 4th highest, you are likely to finish around 4th.
Arsenal finished 5th last season and have not drastically increased their bill for this season, highlighting even more the remarkable job Mikel Arteta has done at the club.
What is Premier League Financial Fair Play?
The Premier League operates its version of financial fair play (FFP) rules, which are designed to ensure that clubs do not spend more than they earn, and thereby maintain the financial stability of the competition as a whole. The rules are intended to prevent clubs from overspending on players’ wages and transfer fees, which can ultimately lead to financial difficulties or even bankruptcy.
Under the Premier League’s FFP rules, clubs are required to submit annual financial information to the league, which is then assessed by an independent panel to determine whether the club is in compliance with the regulations. The key metric used to assess a club’s compliance is their profitability and sustainability (P&S) calculation, which is based on their revenues, expenses, and transfer activity over the course of a three-year period.
The P&S calculation is intended to ensure that clubs do not generate excessive losses or debts, and that they have a sustainable business model. The Premier League also imposes limits on the amount that clubs can spend on players’ wages and transfer fees, which are calculated as a percentage of their total revenue.
If a club is found to be in breach of the Premier League’s FFP rules, they may face a range of sanctions, including fines, points deductions, or even transfer bans. However, the rules are not as strict as those imposed by UEFA for European competitions, and there have been relatively few cases of clubs facing significant sanctions for FFP breaches in the Premier League.
Overall, the Premier League’s FFP rules are intended to promote financial stability and fair competition within the league, and to prevent clubs from overspending in pursuit of success. While the rules are not as strict as those imposed by UEFA, they nevertheless play an important role in ensuring that the league remains financially viable and sustainable over the long term.