Clubs are delaying new contracts over concerns around the Profit and Sustainability Rules (PSR).
Everton have already been docked 10 points this season for financial infractions. The Toffees could face further deductions alongside Nottingham Forest.
Clubs are now trying to curtail their wage bill as they fear breaching spending limits for the current season’s financial accounts.
Consequently, clubs are delaying the ratification of new player contracts until this summer, when spending can be placed within next year’s financial accounts.
Some clubs have gone a step further by reaching agreements with players but with a plan to backdate increased wages. This move places the expenditure under the subsequent accounting period.
Due to fears over the new PSR constraints, the January transfer window has witnessed a significant reduction in spending.
Clubs have been forced to maintain financial prudence. They are increasingly resorting to loan deals as a cost-effective strategy to bolster their squads during this period.
Manchester United manager Erik ten Hag and Newcastle United’s Eddie Howe have openly acknowledged the limitations imposed by spending constraints.
Ten Hag confessed last week that acquiring a new striker was an unattainable goal following Anthony Martial’s injury that will rule him out for ten weeks. His team will have to soldier on despite being short-staffed due to PSR limits.
Howe told the press today that any additions to his squad would be contingent on player sales.
The revelation that clubs are on the verge of violating financial laws to the extent that they cannot accommodate increased salaries shows the magnitude of the challenges facing clubs as they grapple with maintaining financial prudence.
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