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Filtering – A Viable Alternative to PSR and FFP

By: Ted Fred Franky, Refuting misinformation, October 17, 2024  2 weeks ago

Why Filtering Is the Key to Financial Fairness in the Premier League

The Premier League is the pinnacle of global football, but its financial landscape is increasingly skewed. With mega-rich clubs like Manchester City and Chelsea capable of spending fortunes on world-class talent, smaller teams often find themselves at a significant disadvantage. The solution? Financial filtering—a system that caps spending based on a club’s standing within the league, ensuring a fairer, more sustainable competition.

Filtering introduces a rule where clubs can spend no more than 20% over the previous season’s league-wide average on transfers and wages. This straightforward mechanism guarantees that no club can overspend to the point of distorting the competition while still allowing bigger clubs, newly promted clubs or clubs with new investment to invest more. Let’s explore how this approach brings balance to the league.

Levelling the Playing Field

One of the biggest advantages of filtering is that it curbs runaway spending. Under current rules, clubs with unlimited financial backing—like Chelsea after Roman Abramovich’s takeover or Manchester City’s era under Sheikh Mansour—can spend vast sums on players and wages, creating a near-unbreachable gap between themselves and the rest of the league. A system based on filtering would prevent this from happening again.

Official Manchester City Scarf – PUMA 2
Official Manchester City Scarf – PUMA 2

For example, if the average Premier League club spends £100 million on transfers and wages in a given season, the new rule would mean that no club can exceed £120 million in spending the following year. This limit would drastically reduce the chances of a club buying their way to success, creating a more balanced competition where skill, scouting, and long-term planning take precedence over raw financial power.

Balancing Success with Fairness

The genius of the filtering system lies in its balance. While it caps excessive spending, it doesn’t punish success. Clubs like Liverpool or Manchester United, who generate significant revenue through global fanbases, sponsorships, and commercial deals, would still be able to outspend their smaller competitors. However, this ability to spend would be regulated—set at a 20% increase above the league’s average—ensuring their dominance isn’t simply a result of outlandish budgets.

This approach allows clubs to grow within their financial means while preserving the competitive spirit that makes the Premier League so thrilling. A club like Manchester United, for instance, would still have the resources to bring in marquee players, but teams like West Ham or Everton wouldn’t be left hopelessly behind—they’d remain competitive, with realistic chances of breaking into the top six.

Official Manchester City Scarf – PUMA 2
Official Manchester City Scarf – PUMA 2

Long-Term Investment in Ambitious Clubs

Filtering would also promote more sustainable, long-term investment in ambitious clubs. Take West Ham, for example, a team that, despite operating on a tighter budget compared to the financial behemoths, has shown the potential to punch above its weight. With smart ownership and measured investments, West Ham have flirted with European qualification in recent seasons.

Under a filtering system, West Ham’s owners could continue to invest in the squad, but within structured financial limits. This approach rewards careful planning and shrewd transfers over quick fixes through lavish spending. West Ham could still push for the next level, building a squad capable of competing for European spots without risking their financial health by chasing unrealistic transfer targets.

This method encourages steady growth for clubs like West Ham, providing a path for long-term success while avoiding the financial collapse that often follows aggressive, unsustainable investment—something we’ve seen with clubs like Leeds United in the past.

Cycles of Growth for Smaller Clubs

One of the most appealing features of filtering is how it allows smaller clubs to cycle through periods of consolidation and investment. Clubs that generally live within their means, such as Brighton or Crystal Palace, would have the opportunity to “bank” on stability for a few seasons before making a significant push to improve their squad.

For instance, a club like Burnley could operate conservatively for several years, staying competitive and balancing their books. Then, every 3-5 years, they could leverage the system to increase their spending and make a run at European qualification. This cyclical growth model would allow smaller clubs to stay relevant, challenge for honours occasionally, and avoid being perpetually stuck at the bottom of the table.

Reverse Spending as a Check on Excessive Expenditure

An intriguing aspect of the filtering system is how it empowers less well-resourced clubs to influence overall league spending actively. Since the spending cap is based on the league’s average expenditure, smaller clubs could strategically spend less during certain periods to lower the average. This “reverse spending” could effectively curb the spending power of wealthier clubs, as their maximum allowable expenditure would decrease accordingly.

Manchester City MCFC Scarf
Manchester City MCFC Scarf

Imagine a scenario where several smaller clubs decide to tighten their belts simultaneously. By collectively reducing their spending, they lower the league’s average expenditure. Consequently, the 20% cap above this new, lower average forces the bigger clubs to restrain their spending as well. This strategy could be particularly effective during periods when smaller clubs are focusing on financial consolidation or rebuilding.

One of the beauties of this “reverse spending” tactic is that it shifts the balance of power away from simply having the most money. Suddenly, the ability to manage finances shrewdly becomes just as important as deep pockets. Clubs with smaller budgets could deliberately curb their spending to disrupt the spending power of wealthier rivals, creating a situation where even the richest clubs have to think more strategically and act more cautiously. It’s no longer just about who can spend the most, but about who can manage their resources the best, introducing an extra layer of competitive dynamics to the Premier League.

This mechanism adds a layer of strategic financial planning to the league. Not only do clubs compete on the pitch, but they also engage in a form of financial gamesmanship off it. Smaller clubs gain a tool to prevent wealthier rivals from pulling further ahead, thereby maintaining a more competitive balance within the league.

Preventing Financial Doping

The biggest win from introducing filtering is the prevention of “financial doping,” where clubs are artificially boosted by huge cash injections from wealthy owners. Clubs like Paris Saint-Germain or RB Leipzig, backed by endless financial resources, have dominated their respective leagues in ways that aren’t achievable through natural growth or club-generated revenue alone.

In the Premier League, we’ve seen similar scenarios with Chelsea’s Abramovich era and City’s rise under their Abu Dhabi ownership. Filtering would stop any new owners from doing the same in England’s top flight. By capping expenditure, the league avoids situations where a wealthy owner can arrive and, in just a couple of transfer windows, obliterate the competition with an all-star lineup assembled through unchecked spending. This maintains the integrity of the league, ensuring every team has to follow the same financial rules.

Had such a system been introduced before Chelsea’s rise in 2003 or Manchester City’s surge after 2008, both clubs could still have climbed the football hierarchy. However, the journey would have taken longer, as their success would have been built on sustained, strategic growth rather than instant impact through colossal transfer fees. The playing field would have been more level, and their progress would have mirrored more organic climbs like those of clubs such as Aston Villa or Wolves. With shrewd planning, smart recruitment, and the occasional stroke of luck, these clubs could have made similar journeys to the top, achieving success while preserving the competitive balance of the league.

Official Manchester City Scarf – PUMA3
Official Manchester City Scarf – PUMA3

Conclusion

Financial filtering is the ideal solution for the Premier League’s current disparities. It levels the playing field without stifling ambition, allowing clubs to invest and grow sustainably. Larger clubs can still spend, but within limits that protect smaller clubs from being left in the dust. Teams like West Ham can steadily build towards long-term success, while even the smallest clubs can periodically make ambitious pushes up the table.

Moreover, the ability of smaller clubs to influence overall spending through “reverse spending” adds a democratic element to the league’s financial ecosystem. By choosing to spend less, these clubs can indirectly restrain the spending of wealthier teams, promoting fiscal responsibility across the board. In this scenario, it’s no longer just about who has the most money, but about who can be the most shrewd and strategic in their financial dealings.

Most importantly, filtering ensures that the Premier League remains competitive, exciting, and financially viable for the future. It’s a system that benefits all stakeholders—clubs, players, and fans alike—by preserving the integrity and unpredictability that make English football so captivating.