Squad cost ratio will prevent clubs from spending more than 85% of their footballing revenue and the money they make from player sales
Premier League clubs have voted to get rid of the profit and sustainability rules (PSR) and introduce new regulations called the squad cost ratio (SCR).
The vote, held in London on Friday, ends two years of deliberation and effects the biggest rule change in the Premier League since the introduction of PSR in 2015. SCR will replace PSR from the 2026-27 season.
Under the new system, clubs cannot spend more than 85 per cent of their footballing revenue and the money they make from player sales.
If more than 85 per cent of revenue is spent on wages, transfer fees and associated costs, clubs will face sanctions, including potential points deductions.
The Premier League said the new rules “bring the league’s financial system close to Uefa’s existing SCR rules”. Uefa’s SCR rules prevent clubs playing in European competitions from spending more than 70 per cent of their revenue on squad costs. The Premier League’s rules provide an extra 15 per cent room for clubs.
Another option that clubs were considering was the top-to-bottom anchoring (TBA), which meant that every club would not be able to spend more than five times the revenue earned by the Premier League’s bottom-placed side.
Only seven clubs supported the proposal, while 12 voted against it in favour of SCR. Burnley abstained from voting.
The old PSR system restricted clubs to maximum losses of £105m over three years. It will remain in force for the rest of the current campaign.
