Premier League clubs have narrowly voted to restrict the amount of income from the huge new television deal they can spend on players' wages, with a possible points deduction awaiting any that breach the limit.
The move, which secured the required majority only after League newcomers Reading abstained, is the first step towards the Premier League's own version of financial fair play and will come into effect from next season.
At a meeting in central London, the vote of the 20 clubs went in favour of two moves designed to control spending and restrict the amount of losses a club can make over a three-year period. Of the 20, 13 voted for and West Bromwich, Fulham, Swansea City, Manchester City, Southampton and Aston Villa are understood to have opposed the changes for a variety of reasons. With a two-thirds majority required, Reading's abstention proved decisive.
The headline effect should be to prevent wealthy new owners being able to turn a club into title contenders in the space of a couple of seasons, as Roman Abramovich did at Chelsea.
The long-term measures prevent a club from accruing losses of more than £105m over a three-year period – again with a points deduction the ultimate sanction – a ruling that Manchester City, Chelsea, Villa and Liverpool would have all fallen foul of in the past. It will come into force from 2015-16. Richard Scudamore, the league's chief executive, said there would be an "absolute prohibition" on any clubs breaking that ceiling.
The wage restriction will limit the amount of the central pot handed out by the Premier League, which is set to total more than £5.5bn, that can be spent on player costs. Next season each club is expected to receive more than the £60m Manchester City collected for winning the title last season. But any club whose total wage bill exceeds £52m – a total that it is estimated will cover all but six of the clubs – can spend only £4m of the central handout on wages next term, rising to £8m the year after and £12m in 2015-16. The penalties for breaching the limits will come into force from next season.
Scudamore said: "As all things in our rulebook, you will be subject to a disciplinary commission. The clubs understand that if people break the £105m we will be looking for the top-end, ultimate sanction range: points deduction. It won't cut spending from what [the clubs] are currently spending but it will reduce the amount of increase in spending.
"The balance we have tried to strike is that a new owner can still invest a decent amount of money to improve their club but they are not going to be throwing hundreds and hundreds of millions in a very short period of time.
"While it has worked for a couple of clubs in the last 10 years, and I am not critical of that, if that's going to be done in the future it's going to have to be over a slightly longer term without the huge losses being made.
"I think at £105m you can still build a very decent club with substantial owner funding but you have to do it over time, you can't do it in a season."
Chelsea were two years into the Abramovich regime before they won the Premier League title, while Manchester City won it three years after Sheikh Mansour took over the club. The Premier League believes the restrictions lessens the chances of the top flight suffering another Portsmouth-style collapse as any club making any loss of over £5m a year will have to guarantee those losses against the owner’s assets.