Premier League clubs have voted to introduce sweeping new financial regulations that will prevent teams from selling assets such as hotels and women’s teams to their own ownership groups in an attempt to comply with spending limits. The new rules, set to take effect next season, close one of the most controversial loopholes used in recent years to improve balance sheets artificially.
The decision follows a tight vote in London on Friday, where clubs agreed to replace the existing Profit and Sustainability Rules (PSR) with a new system based on Squad Cost Ratio (SCR). Fourteen clubs backed the SCR model— the minimum number required to introduce a rule change—while six voted against.
How the 85% squad cost cap will work
Under the new framework, Premier League clubs will be required to cap overall squad costs at 85% of annual revenue from the 2026–27 season. For clubs competing in European tournaments, the limit will be lower—70%, in line with UEFA’s existing financial rules.
Squad costs will include player wages, manager wages, transfer fees and agents’ fees. Crucially, the new system bans the reclassification or internal sale of capital assets, which had previously been used to offset spending. Last year, Chelsea sold two hotels to a sister company to remain compliant with PSR, while Everton sold their women’s team to the parent company. Aston Villa were reportedly planning a similar move—none of which will be allowed under the new regime.
Clubs lose ability to manipulate accounts through non-football assets
The assessment will now be based solely on revenue generated from football operations, excluding hotels, training facilities, real estate and women’s teams. The aim is to create a more transparent system and reduce opportunities for financial manipulation.
Sustainability rules, focusing on long-term financial planning, passed unanimously. However, a proposed “anchoring” rule—designed to link top-club spending to the revenue of the bottom Premier League club—failed after only seven clubs supported it.
Premier League statement outlines goals of new system
In a statement, the league said the SCR system is designed to give all clubs a fair chance of competing, while aligning closely with UEFA regulations. It stressed new features such as in-season monitoring, spending flexibility, stronger oversight and simplified financial reporting focused strictly on football costs.
Unlike PSR, which assessed club finances over a rolling three-year window, SCR will review squad spending each season. The Premier League has added a multi-year 30% rolling allowance, giving clubs controlled flexibility to exceed the 85% limit to manage underperformance, invest ahead of revenue, or navigate fluctuations.
The thresholds include:
•85% Green Threshold: Exceeding it results in fines, though less severe than UEFA penalties.
•Red Threshold: Set at 85% plus the 30% allowance. Exceeding this incurs an automatic six-point deduction, increasing by one point for every £6.5m past the limit.
Practically, every club begins the season able to spend up to 115% of revenue without sporting sanctions.
Who will feel the impact?
Clubs with smaller stadiums or limited commercial income may be most affected. Bournemouth, Brentford, Brighton, Crystal Palace, Fulham and Leeds voted against SCR, raising concerns that linking wages to revenue could disadvantage teams with lower income despite Premier League-level wage commitments. Bournemouth, for example, have a ground capacity of just over 11,000.
Meanwhile, clubs such as Aston Villa and Newcastle—previously frustrated by the restrictiveness of PSR—still face the tighter UEFA limit of 70% due to their participation in European competitions.
Why anchoring failed
Anchoring would have capped total spending at five times the revenue earned by the Premier League’s bottom club—around £600m based on current estimates. While intended to prevent elite clubs from financially outpacing the league, top clubs were divided. Manchester United and Manchester City opposed it, concerned it could restrict their ability to compete with European giants like Real Madrid. Liverpool and Arsenal supported it.
The PFA had also warned that anchoring would effectively create a wage cap and could provoke legal challenges.
Sustainability rules passed without dispute
Clubs unanimously backed enhanced sustainability requirements, mirroring obligations expected under the incoming Independent Football Regulator (IFR). Teams will be required to submit detailed financial forecasts and demonstrate their capacity to operate responsibly. Non-compliance could trigger spending restrictions or mandatory debt restructuring.
These changes come after a turbulent two years in which multiple clubs—including Everton and Nottingham Forest—were deducted points for PSR breaches, intensifying calls for clearer and more consistent regulation.
