The Premier League clubs have agreed to overhaul their financial regulations by scrapping the long-running Profit & Sustainability Rules (PSR) and introducing a new Squad Cost Ratio (SCR) system starting from the 2026/27 season. This marks a fundamental shift in how clubs manage their finances, with an emphasis on linking spending directly to revenue and bringing domestic rules more in line with the financial controls already used by UEFA.
Under the outgoing PSR regime, clubs were allowed to record adjusted losses of up to £105 million over a rolling three-year period. These regulations were retrospective and often complex, allowing clubs to use accounting practices like amortisation and capital transactions to stay compliant, and frequently resulting in delayed sanctions such as points deductions.
By contrast, the new SCR rules focus on the proportion of income a club spends on its first-team playing staff and related costs, including player wages, transfer fees, agent fees and other squad-related expenses. Clubs will be required to keep these costs within 85 % of their football-related revenue (which includes matchday, broadcast, commercial income and the net profit or loss from player sales). Spending above this threshold can trigger financial penalties, and more serious or repeated breaches may lead to sporting sanctions, such as points deductions, similar to the system UEFA already applies.
For clubs participating in UEFA competitions, the domestic SCR cap aligns with UEFA’s stricter model, which currently limits eligible squad costs to 70 % of revenue, a ceiling that is being phased in across recent seasons under UEFA’s own financial sustainability regime.
The SCR system also introduces new measures to prevent loopholes, such as forbidding clubs from inflating revenue via intra-group asset sales, a tactic used under PSR in recent years. Instead, the focus is on real football earnings, and compliance will be assessed annually, rather than over a three-year look-back.
Clubs also endorsed complementary Sustainability and Systemic Resilience (SSR) tests to ensure longer-term financial health. A proposal to tie spending limits to the revenue of the lowest-placed club (a “top-to-bottom anchoring” system) was rejected, partly due to concerns it would act as a de-facto salary cap.
To be honest, an 85% cap still benefits clubs with high revenue and may not substantially improve competitive balance!