Top clubs agree salary cap

Man Utd saw their wage bill rise by 40% last year

Europe's leading clubs have agreed to cap spiralling salary costs in a bid to protect the financial future of the game.

The G14 group, which includes 18 of Europe's top clubs, used a meeting of its members in Brussels to agree a salary ceiling of 70% of a club's turnover.

The recommendation is part of a 10-point plan which will come into effect from the 2005/2006 season.

The plan in full

There is currently no limit to what a club can spend on salaries and many are facing financial ruin after gambling on spiralling wages.

  The G14 clubs

England: Liverpool, Manchester United, Arsenal

Italy: AC Milan, Inter Milan, Juventus

Spain: Barcelona, Real Madrid, Valencia

France: Marseille, Paris St Germain, Lyon

Germany: Bayern Munich, Borussia Dortmund, Bayer Leverkusen

Holland: Ajax, PSV Eindhoven

Portugal: Porto

The G14 plan, which also commits to the principle of performance related pay, intends to introduce a code of conduct to combat ever-increasing wage demands and transfer fees.

It is the first time any form of player salary cap has been agreed in European professional football since the abolition of the old maximum wage in the sixties.

Manchester United - the club with the highest turnover in the world - revealed in September that their wage bill had grown by 40% to £70m in the last year.

But they are the only club in the English Premiership to spend less than 50% of their turnover on player wages.

It is hoped the new limit will help prevent clubs from putting themselves under pressure by overspending in an attempt to compete.

PFA rethinks salary cap

"The cost-control concept is also recommended to be adopted by other clubs apart from G-14 clubs, whose participation will reinforce its effect," the group said in a statement.

However, although the self-regulated G14 group has used the meeting to recommend best practice proposals for clubs, it has no power to impose sanctions for those that do not comply.

The statement added: "For each 12-month accounting period, covering an entire football season, the amount of total staff cost of each member club will be limited to 70% of its audited turnover.

"Verification of the club's compliance with the above principals shall be carried out by their statutory auditors."

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G14's 10-point plan

At the Brussels meeting, the G14 clubs agreed:

• To the principle of self-regulation to cut costs.
• To urge other clubs to follow the guidelines.
• To launch an information campaign to publicize cost-cutting measures.
• To "continuously promote" the measures.
• To cap payroll costs at 70% of annual turnover from the 2005-6 season.
• To the principle of performance-related pay.
• To allow statutory auditors to verify clubs' compliance with the recommendations.
• To provide standard provisions for players' contracts.
• To back the harmonisation of different national leagues' licensing systems, as "a potential common pattern for European club football."
• To consult the European Commission to ensure compatibility of its recommendations with EU law.