Premier League clubs approve major overhaul of financial rules with new spending limits

Premier League clubs voted on Friday to introduce sweeping changes to the competition’s financial regulations, adopting a new model that restricts spending directly tied to on-pitch performance. The reforms were approved by a 14–6 majority.

Under the new squad cost ratio (SCR) system, clubs will be limited to spending 85 percent of their football-related revenue plus net profit or loss on player sales. Squad-related costs include wages, agent fees and transfer fees. The system mirrors UEFA’s approach, which caps such spending at 70 percent of club revenue.

The Premier League said the updated framework—set to take effect in the 2026/27 season—aims to simplify financial oversight by focusing solely on “football costs.” Clubs will also be granted a “multi-year allowance” of 30 percent, enabling them to exceed the spending cap, but doing so will trigger a levy similar to a luxury tax. Once that allowance is exhausted, exceeding the 85 percent limit will result in sporting sanctions, including points deductions.

The new rules also close loopholes that previously allowed clubs to boost their balance sheets by selling non-football assets to related entities. Chelsea, for example, sold two hotels and their women’s team to sister companies in 2023 to remain compliant under existing profitability and sustainability (PSR) regulations.

Clubs additionally approved new sustainability and systemic resilience (SSR) rules aimed at evaluating financial health over short-, medium- and long-term horizons. However, they rejected a proposed hard cap on squad spending that would have limited any team to spending no more than five times the central income earned by the league’s bottom-placed club. The Professional Footballers’ Association opposed the measure, calling it a de facto salary cap and even threatening strike action.

Under current PSR rules, clubs can incur losses of up to £105 million over a rolling three-year period. Both Nottingham Forest and Everton were docked points in the 2023/24 season for breaching those regulations.