Premier League’s new financial rules will have winners and losers
Incoming Squad Coast Ratio rules across the Premier League will breed a new wave of winners and losers, experts have warned.
The conclusion of the Premier League season on Sunday – which saw champions Arsenal lift their first title in 22 years – aligned with the end of Profit and Sustainability Rules, where teams could lose millions of pounds across a number of years before being punished.
But their replacement, Squad Cost Ratio, may still give a perception of “Big Six” bias.
PSR vs SCR: The difference
“From the 2026-27 season, the Premier League is adopting new Squad Cost Ratio (SCR) rules,” Reed Smith partner Matt Phillips explained, “focused on on-pitch spending and capped at 85 per cent of football-related revenue, aligned with Uefa’s latest financial framework.
“SCR spending limits apply on a season-by-season basis and, although sporting sanctions remain the ultimate punishment, compliance is monitored throughout the season on a more “real-time” basis, representing a philosophical shift.
“PSR measured an accounting figure rather than assessed actual financial health, invited creative compliance rather than prudent financial management, and left fans concerned, rightly or wrongly, that it preserved the in-built advantage enjoyed by the biggest clubs.”
Premier League winners and losers
Football finance expert Kieran Maguire stated that there will be winners and losers out of the changes. “It has to be noted that 14 clubs voted in favor of the move to SCR and six voted against,” he told City PM. The likes of Brentford, Brighton, Bournemouth and Crystal Palace were against the reforms.
“They were opposed to it,” Maguire added, “because it reduces the impact of player sales. Instead of being able to put all of your player sale profits into your PSR calculations, under SCR those profits are spread over three years. So those clubs which use the transfer market to a greater extent as one of their income generating areas, income generating units, are going to be slightly disadvantaged.
“The sides that will benefit are those who have very significant commercial arms. The other winners will be clubs that have just been promoted to the Premier League.”
English football strength
This season saw the likes of Sunderland, Bournemouth and Brighton reach European football qualification, while Aston Villa’s victory in the Europa League final means the English triple this season – with Arsenal in the Champions League final and Crystal Palace in the Conference League final – is still possible; demonstrating the financial power in English football.
Akshay Sewlikar and Patrick Lloyd of law firm Michelman Robinson concluded that it is a waiting game. “Only time will tell if this new regime will succeed in improving top clubs’ financial health,” they said, “but the fact that the SCR and IFR rules have the same aim should create a more consistent framework for better financial management.
“Moreover, implementing a clear expenditure limit linked to football-related revenue and player sales aligns the Premier League with the Uefa rules. It’s a step in the right direction.”