Premier League Approves New Financial Regulations from Next Season

Premier League clubs have approved a substantial reform of the league’s financial regulatory framework, replacing the existing Profitability and Sustainability Rules (PSR) with a new system centred on a Squad Cost Ratio (SCR) and enhanced sustainability requirements, to be implemented from the 2026–27 season. The move represents a shift from assessing cumulative losses over a rolling period to closer, season-by-season monitoring of football-related expenditure.

Under the SCR framework, clubs will be required to limit total squad costs—comprising player and managerial wages, amortised transfer fees and agents’ fees—to 85% of their football-related revenue. The new model is designed to simplify regulation by focusing on football costs and ensuring that clubs’ squad spending remains closely linked to the income they generate from football operations. The changes also aim to align the Premier League’s financial controls more closely with UEFA’s regulatory model.

A key feature of the new regime is how asset disposals are treated within club ownership structures. While clubs may continue to transfer capital assets, such as hotels or women’s teams, to related entities, revenue arising from such intra-group transactions will no longer be considered for SCR compliance. Only income derived from core football operations, including broadcasting, matchday and commercial revenues, will be taken into account, effectively preventing clubs from using internal asset sales to increase their permissible squad spending.

The SCR system also includes a calibrated enforcement mechanism, featuring a rolling allowance that permits limited spending ahead of revenue and a graduated sanctions framework, with financial penalties for moderate breaches and sporting sanctions, including points deductions, for more serious overspend.

Alongside these changes, clubs rejected the proposed “anchoring” mechanism, which would have imposed a spending cap linked to the revenues of the lowest-earning Premier League club. Concerns were raised that such a cap could operate as a de facto wage ceiling, limit clubs’ ability to grow as revenues increase, and expose the league to legal and commercial risks. The anchoring proposal failed to secure the requisite support and does not form part of the new regulatory framework.