Blackpool chairman Karl Oyston has backed the Financial Fair Play rules that will come into effect in the Championship next season.
The forthcoming campaign will see second-tier clubs limited to the amount of losses they can make, with anyone losing ?4million or more being hit with a transfer embargo or substantial fine.
Championship clubs amassed a net debt of ?0.9billion last season and Oyston has voiced his support for the new structure.
"It's difficult for a player who has been used to earning five, six or seven thousand a week to be told the only offers available are for three, four or five thousand," he told The Blackpool Gazette.
"It's going to be difficult for a lot of those players to take a step back in their income but that's what's happening.
"At the moment players and agents aren't quite grasping that and are finding it difficult to accept. That isn't just at this football club, it's everywhere. It's not a club's choice to tighten things - it's now a regulatory necessity. Quite rightly it has been enforced.
"For far too long, people have run their businesses horrifically badly. These new regulations are the punishment for this, even for those of us who didn't run our businesses in that way."
The Chilean's arrival has been widely expected since 2012 Premier League-winning boss Roberto Mancini was sacked a month ago.
The 59-year-old has agreed a three-year deal at the Etihad Stadium and will officially take up his post on June 24.
Pellegrini arrives from Spanish side Malaga, whom he guided to the quarter-finals of the Champions League last season.
He said: "I am delighted to accept this hugely-exciting opportunity.
"The club has a clear vision for success both on and off the pitch and I am committed to making a significant contribution.
"Everything is in place for Manchester City to continue to be successful and I am excited to be able to work with such a talented squad, the executive team and the board to deliver for fans who are renowned for their steadfast support."
Pellegrini had been linked with City even before Mancini's departure and the club did not deny interest after deciding to make the change.
Pellegrini's appointment was expected to be ratified soon after his final Malaga match on June 1, but the club are not understood to have been concerned by the delay since.
Reports have suggested there may have been a hitch over the terms of his exit from Malaga, but obstacles may have been removed after the Spanish club confirmed Bernd Schuster as Pellegrini's successor.
Pellegrini has more than 25 years' managerial experience.
Prior to moving to Malaga he led Villarreal to the last four of the Champions League as well as a second-placed finish in La Liga.
Those feats attracted the attention of Real Madrid and he spent a single season in charge at the Bernabeu before making way for Jose Mourinho in 2010.
He also arrives at City with a good reputation for man-management, something which will have been a key factor in his appointment. The club did have concerns in this area under Mancini.
City chairman Khaldoon Al Mubarak said: "Manuel is a hugely experienced and successful manager with a proven track record.
"We have been greatly impressed throughout the selection process by his philosophy, his attitude and his commitment to the long-term development of Manchester City.
"I am delighted that he has joined us."
Pellegrini does have a tough act to follow in fans' favourite Mancini.
The Italian ended a 35-year trophy drought by overseeing FA Cup success in 2011 and he topped that by following up with dramatic Premier League success the following year.
His record in the Champions League did let him down, however, with two group-stage exits, and last season's runners-up domestic finish did represent a regression.
Pellegrini will be expected to improve upon this with chief executive Ferran Soriano recently speaking of a target of five trophies in the next five seasons.
He will bring with him three members of backroom staff.
Long-standing right-hand man Ruben Cousillas, from Argentina, will be his assistant while Xabier Mancisidor will be goalkeeping coach and Jose Cabello fitness coach.
Assistant manager Brian Kidd, who took caretaker charge of the team after Mancini's exit, will also remain as part of the set-up.
Pellegrini said: "It is important to me that Brian remains part of the coaching team.
"He has great football knowledge, knows the league, the players and will be a big part of what we try to achieve.
"We have spoken and we are all excited to work together."
Pellegrini will get to work with his new squad during a pre-season programme which includes trips to Hong Kong, South Africa, Germany and Finland.
He will need to integrate new players with City looking set for a busy summer in the transfer market.
Brazilian midfielder Fernandinho and Spain winger Jesus Navas have already been signed from Shakhtar Donetsk and Sevilla respectively for a combined initial cost of almost ?45million.
City have also been heavily linked with moves for Malaga playmaker Isco - whom Pellegrini has developed considerably and with whom he shares an agent - and Napoli striker Edinson Cavani.
Arnold has progressed through the youth ranks with the Royals and signed a new one-year contract extension earlier on Friday.
The 19-year-old is yet to make a first-team appearance for the Berkshire outfit but was an ever-present member of their under-21 side last term.
Wanderers boss Gareth Ainsworth told the club's official website: "I'm excited to be working with him having watched him play a number of times for Reading under-21s last season.
"I feel he's got something. He can play anywhere on the right, is energetic and has pace and strength.
"Hopefully he can follow in the footsteps of the successful loan signings we had last year."
Arnold becomes Ainsworth's second summer signing after goalkeeper Charlie Horlock.
The 24-year-old was one of 13 players made redundant by Aldershot last month after the financially-stricken Hampshire outfit went into administration.
And Dale boss Keith Hill has moved to secure Lancashire's services, with the former Southampton and Walsall defender passing a medical on Friday.
Lancashire is reunited with midfielder Peter Vincenti after he left Aldershot earlier this summer following the club's relegation from the Football League.
