From the 2026-27 campaign onwards, English men's soccer's top-tier Premier League will adopt a new system of monitoring clubs while trying to ensure financial fair play.
Representatives from the league's 20 sides voted in two new methods of regulating clubs' finances – effectively replacing the current profit and sustainability regulations (PSR) – but voted against a third option.
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A Squad Cost Ratio rule, through which clubs not competing in pan-European competitions will only be allowed to spend 85% of their revenue on wages, was voted through, with 14 clubs in favour and six against. Teams that are participating in UEFA competitions will still have to adhere to that governing body's stricter limit of 70%, meanwhile.
Squad costs technically comprise player and manager wages, any outgoing transfer fees, and agents' fees.
Although the limit is 85%, there is a rolling additional allowance of 30% – clubs spending over 85% of their revenue on squad costs receive a financial penalty, and any that exceed 115% will face a points penalty (starting at six points).
The six teams to have voted against this change were Bournemouth, Brentford, Brighton, Crystal Palace, Fulham, and Leeds.
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By GlobalDataOn top of this, sustainability regulations, covering the need for clubs to set out their spending plans over the short, medium, and long term, passed unanimously. These take the form of a trio of tests – one covering the current season's costs as well as "unforeseen fluctuations," another looking at whether a club can handle issues such as relegation to the league below, and the third assessing a club's debt from a long-term point of view.
However, a rule that would have placed an upper limit on clubs' spending based on the amount earned by the bottom club in the Premier League (known as anchoring) did not get through the vote – 12 clubs voted against, with one abstention, and only seven were in favor.
The Premier League has now said, on the Squad Cost Ratio introduction: "The new SCR rules are intended to promote opportunity for all clubs to aspire to greater success and bring the league's financial system close to UEFA's existing SCR rules."
For failing to adhere to UEFA's SCR limit in 2024-25 (at that point, it was at 80%), Chelsea and Aston Villa were both fined by that body.
The Premier League, from now on, will assess all clubs every March to check for non-compliance.
The league added: "The other key features of the league's new system include transparent in-season monitoring and sanctions, protection against sporting underperformance, an ability to spend ahead of revenues, strengthened ability to invest off the pitch, and a reduction in complexity by focusing on football costs."
The old PSR system simply took all club revenues and losses over a three-year period, with clubs having breached if they lost an aggregate of £105 million over three rolling seasons (although multiple avenues of spending did not count as losses for PSR purposes, including money spent on clubs' women's teams).
Anchoring, which failed to pass the clubs' vote, would have meant each club could only spend a multiple of the revenue earned – the previous season – by the 20th-placed side.
That proposed measure has encountered significant criticism during the past few weeks, with the Professional Footballers' Association suggesting it would consider strike action if anchoring was introduced.
The league also stated that the new rules have been brought in following "extensive consultation with clubs and a wide range of stakeholders," and that the new system has been introduced to work "effectively in parallel with UEFA's rules, and is consistent with the objectives of the Independent Football Regulator."
