Premier League clubs have unanimously voted to scrap the current financial rules and adopt a new system focused solely on spending directly tied to on-pitch performance.
What the New Squad Cost Ratio (SCR) Model Means
Sixteen Premier League clubs voted in favour of introducing the Squad Cost Ratio (SCR) model, which will cap “on-pitch spending” at 85 percent of football-related revenue and net profit or loss from player trading. Squad-related costs include player wages, agents’ fees, and transfer fees.
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UEFA’s Model Provides the Blueprint
UEFA already operates a similar system that limits spending on player and coach wages, transfers, and agent fees to 70 percent of club revenue.
Clubs Get a 30% Allowance
According to the Premier League, clubs will have a multi-year allowance of 30 percent to go above the 85 percent limit.
Exceeding it triggers a levy, effectively a luxury tax. Once the allowance is exhausted, any further breach will lead to sporting sanctions such as points deductions.
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Restrictions on Asset Sales to Boost Books
From 2026/27, the league says the SCR will simplify financial rules by focusing on “football costs”.
Clubs will no longer be able to sell assets such as hotels or women’s teams to related companies to inflate spending capacity. Chelsea previously used such asset transfers under the existing Profitability and Sustainability Rules (PSR).
New Sustainability and Systemic Resilience (SSR) Tests Introduced
Premier League Clubs also approved new SSR rules, which will assess financial health across short, medium, and long-term indicators.
Salary-Cap Style Proposal Rejected
However, clubs voted against introducing a hard cap that would have limited squad spending to no more than five times the central income received by the league’s bottom club.
The Professional Footballers’ Association opposed the measure, calling it a salary cap and threatening strike action.
PSR Breaches Still Fresh in Memory
Under current PSR rules, clubs are allowed a maximum loss of £105 million over a rolling three-year period. Nottingham Forest and Everton were both handed points deductions during the 2023/24 season for breaching these regulations.
