How dramatic Premier League U-turn could impact Arsenal, Spurs and Chelsea

The Premier League is reportedly considering scrapping points deductions in favour of a 'luxury tax' penalty. The bombshell news would have an impact on Arsenal, Tottenham Hotspur and Chelsea, as well as rivals in the top flight and mark a U-turn on the current system.

Everton were handed a ten-point penalty earlier this season for breaching Profitability and Sustainability Rules and Nottingham Forest were also slapped with a four-point deduction - although to Toffees' punishment was reduced to six points after a successful appeal.

Those points penalties had Premier League clubs cautious over January spending, making it one of the quietest windows on record. However, widespread reports today suggest that the reaction of teams means that “many officials deem the league's Profit and Sustainability Rules (PSR) not fit for purpose”.

The fear is that current limitations to spending could see the Premier League fall from its steadfast position as the world's most lucrative league. The Daily Mail reports that clubs have discussed a 'radical reform' that could be approved by vote in a June meeting.

The report claims that 17 of the 20 Premier League clubs would back the 'luxury tax' change - only 14 'yes' votes are needed to green light approval. A luxury tax system would mean that clubs that spent over the limit would have a financial punishment imposed rather than a points penalty. The more they spend, the greater the financial punishment is.

The proposition would then be for the money accumulated to be redistributed to the Premier League clubs that stay within the spending parameters. Some of the cash could also go into an 'emergency fund' for EFL clubs. A similar system is currently used by Major League Baseball and the NBA in the USA.

When and if the new system is approved and implemented remains to be seen but it would alleviate the pressure on clubs such as Arsenal, Spurs and Chelsea, who may want to spend big. Crystal Palace are also under a new dawn with Oliver Glasner at the helm and Brentford have shown this season that recruitment is needed to avoid another relegation battle next.

Explaining the impact of current regulations on Arsenal in the January window, The Athletic's David Ornstein said: “Don’t forget that [Arsenal are] close to the line on Financial Fair Play, Profit and Sustainability. We know that, we’re not just saying it, because the last deal they did for David Raya had to be structured as a loan with an option to buy.

“When they get sufficient money, they’re going to have to direct it towards Raya, turning that deal permanent with Brentford. [Brentford] are in the process of signing a second goalkeeper, so that is definitely going to happen – Raya to Arsenal permanently.

“Then in the summer, I do think Arsenal are really going to attack the market again. We could well see a striker come in, they’ll be really looking at the options, like many clubs will be. So I think the excitement around Arsenal transfers probably needs to be put on hold for a few months.”