Premier League clubs vote to change financial rules, PSR to be replaced by SCR from next season
Premier League clubs have voted to overhaul the league’s financial regulations from the start of the 2026-27 season.
The clubs held a shareholders’ meeting in London on Friday to discuss a range of proposed new financial measures, known as top to bottom anchoring, the squad cost ratio (SCR) and the sustainability and system resilience (SSR).
Anchoring was voted on first but received only seven votes in favour, with 12 against and one abstention. The clubs then voted on SCR, which passed 14 to six, and SSR, which passed unanimously. A threshold of 14 of the 20 clubs voting in favour of a proposal is required to change Premier League rules.
SCR will replace the league’s current profitability and sustainability rules (PSR), which limit club losses to a maximum of £105million ($137m) over a three-year period. This season will be the last under those regulations.
What is SCR?
SCR limits the amount clubs can spend on wages and transfer fees for their squads and head coaches, as well as agent fees, to 85 per cent of their total income.
SCR was initially introduced by UEFA — limiting English clubs competing in Europe to spending 70 per cent of their income on transfers and wages — and has been operated domestically, in shadow, both this season and last.
While UEFA’s SCR runs annually, from January to December, the Premier League’s version will see clubs assessed on March 1, with further monitoring also taking place in October. The league says clubs who exceed the 85 per cent threshold in March will be subject to additional assessments in June and October.
“The new SCR rules are intended to promote opportunity for all clubs to aspire to greater success and brings (sic) the league’s financial system close to UEFA’s existing SCR rules which operate at a threshold of 70 per cent,” a Premier League statement said on Friday. “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.”
Chelsea and Aston Villa received combined fines of around £14.7m (€17m) from UEFA last summer for breaching the SCR rules in 2024.
What about SSR?
SSR comprises three prongs. One seeks to ensure clubs have sufficient resources to handle both known outgoings and any reasonable fluctuations that may occur in revenue. The other two look at clubs’ long-term financial outlook, assessing the health of a club’s balance sheet.
“The sustainability and systemic resilience rules assess a club’s short, medium and long-term financial health through three tests — working capital test, liquidity test and positive equity test,” the league added.
Chelsea and Villa have breached UEFA’s SCR rules in recent seasons (Clive Mason/Getty Images)
And what is anchoring?
Top to bottom anchoring would have limited clubs’ spending on wages and transfer fees — including agent fees — to five times the amount paid in prize money and broadcast revenue to the club which finished bottom.
For example, last season, Southampton received £109.2m while finishing in 20th place, meaning the anchoring limit would have been set at £546m.
It is forecast that had anchoring been in place for the current 2025-26 season, expected increases in distributions to clubs following the start of a new TV deal cycle would have lifted the anchoring limit to £600m.
Anchoring, therefore, represents a variable cap on spending, which applies equally for all 20 top-flight clubs.
As reported by The Athletic, the Premier League could have faced legal action from its players if it had voted in favour of anchoring, which would have effectively resulted in a U.S. sport-style salary cap.
The CEO of the Professional Footballers’ Association (PFA), Maheta Molango, told the BBC last week: “You cannot artificially cap someone’s ability to make a living as this would just not withstand any legal challenge.”
In response, the Premier League claimed the PFA had been given “numerous opportunities” to share its view on the proposed changes, adding: “It is the league’s objective to maintain the Premier League’s value, competitive balance and ensure clubs operate in a sustainable way.”
Three leading football agencies – CAA Base, CAA Stellar and Wasserman – also threatened to sue the Premier League if new rules were voted through, claiming they were not consulted about the potential introduction of anchoring or the squad cost rule (SCR).
