English Premier League introduces new financial rules

Premier League clubs have voted in favor of a significant financial shake-up that will introduce a new spending framework from the 2026-27 season, with Squad Cost Ratio (SCR) winning the narrow majority required to replace the existing Profit and Sustainability Rules (PSR).

All 20 Premier League club representatives met in London on Friday to vote on three financial control proposals. SCR received 14 votes in favor and six against - the minimum required to implement a rule change. Under the new system, overall squad costs will be capped at 85% of a club's revenue starting in 2026-27, while teams playing in European competitions will need to conform to UEFA's stricter 70% limit.

Squad costs are defined as player and manager wages, transfer fees and agents' fees. The new regulations will also close a loophole that has allowed clubs to sell non-football capital assets, such as hotels or women's teams - to related companies to balance their financial figures.

Regulations around long-term financial sustainability passed unanimously among shareholders. However, the "anchoring" proposal, which would have capped spending relative to the revenue of the Premier League's bottom club, failed to gain approval, with 12 voting against, seven in favor and one abstention.

In a statement, the Premier League confirmed: "At a Premier League shareholders' meeting today, clubs voted to introduce a new set of financial rules which will come into effect from the start of the 2026-27 season."

Explaining the system further, the statement added: "SCR will regulate clubs' on-pitch spending to 85 percent of their football revenue and net profit/loss on player sales. Clubs will have a multi-year allowance of 30 percent that they can use to spend in excess of the 85 percent. Utilizing this allowance will incur a levy and once the allowance is exhausted, they will need to comply with 85 percent or face a sporting sanction."

"The new SCR rules are intended to promote opportunity for all clubs to aspire to greater success and brings the league's financial system close to UEFA's existing SCR rules, which operate at a threshold of 70 percent," the statement added.