![\"Chelsea](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/11\/chelsea-villa-scaled.jpg\")
<\/p>\nPremier League clubs have voted to overhaul the league\u2019s financial regulations from the start of the 2026-27 season.<\/p>\n
The clubs held a shareholders\u2019 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).<\/p>\n
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.<\/p>\n
SCR will replace the league\u2019s current profitability and sustainability rules (PSR), which limit club losses to a maximum of \u00a3105million ($137m) over a three-year period. This season will be the last under those regulations.<\/p>\n
How will SCR work?<\/p>\n
Similarly to the current SCR regime operated by UEFA, which nine Premier League clubs needed to adhere to already this season.<\/p>\n
SCR broadly covers one year of club activity, except for player sales (see below), and Premier League SCR will be assessed across a season. UEFA, by contrast, assesses clubs on an annual January to December basis.<\/p>\n
SCR puts a direct limit on how much clubs can spend on their players and head coach, albeit one which is linked to a given club\u2019s revenue. In other words, the amount able to be spent under SCR will differ from club to club.<\/p>\n<\/p>\n
Costs assessed under SCR include player and head coach wages, agent fees and the amortisation or impairment (when a club writes down a player\u2019s value in their books) of transfer fees. In a continuation of the old PSR regime, costs relating to women\u2019s teams and youth academies are excluded for SCR purposes.<\/p>\n
To allow for swift punishment \u2014 i.e. to avoid matters dragging over multiple seasons, as they have under PSR \u2014 clubs will undergo an SCR Compliance Test each March 1. If their squad cost is equal to or less than 85 per cent, they will be deemed compliant. If they exceed that level, they will be subject to an Accounts Confirmation Test at the end of the season in June.<\/p>\n
How does this compare to UEFA\u2019s rules?<\/p>\n
A notable difference between the two SCR frameworks is the proportion of relevant income clubs can spend on squad costs. Under UEFA regulations, that limit sits at 70 per cent while the Premier League has agreed to an 85 per cent limit.<\/p>\n
That won\u2019t matter to the nine clubs already competing in Europe this season, but the extra 15 per cent allowed for the rest tallies with the Premier League\u2019s statement, which says the new rule will \u201cpromote opportunity for all of (our) clubs to aspire to greater success, while protecting the competitive balance and compelling nature of the league\u201d.<\/p>\n
Clubs will only be able to spend a set proportion of relevant income under SCR, which comprises \u201cfootball-related revenue\u201d (so, generally speaking, a club\u2019s annual turnover) plus their net profit or loss generated from player sales. Under UEFA rules, the latter is averaged over the past three seasons, meaning clubs are less easily able to extricate themselves from regulatory trouble with a quick player sale. The averaging has been reflected in the Premier League\u2019s SCR regime.<\/p>\n
UEFA\u2019s SCR rules saw Chelsea and Aston Villa receive combined fines of around \u00a314.7m (\u20ac17m) last summer for breaches in 2024.<\/p>\n
What about SSR?<\/p>\n
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\u2019 long-term financial outlook, assessing the health of a club\u2019s balance sheet.<\/p>\n
\u201cThe sustainability and systemic resilience rules assess a club\u2019s short, medium and long-term financial health through three tests \u2014 working capital test, liquidity test and positive equity test,\u201d the league added.<\/p>\n
<\/p>\n
\n Chelsea and Villa have breached UEFA\u2019s SCR rules in recent seasons (Clive Mason\/Getty Images)<\/p>\n
And what is anchoring?<\/p>\n
Top to bottom anchoring would have limited clubs\u2019 spending on wages and transfer fees \u2014 including agent fees \u2014 to five times the amount paid in prize money and broadcast revenue to the club which finished bottom.<\/p>\n
For example, last season, Southampton received \u00a3109.2m while finishing in 20th place, meaning the anchoring limit would have been set at \u00a3546m.<\/p>\n
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 \u00a3600m.<\/p>\n
Anchoring, therefore, represents a variable cap on spending, which applies equally for all 20 top-flight clubs.<\/p>\n<\/p>\n
As reported by The Athletic<\/a>, 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.<\/p>\n The CEO of the Professional Footballers\u2019 Association (PFA), Maheta Molango, told the BBC last week<\/a>: \u201cYou cannot artificially cap someone\u2019s ability to make a living as this would just not withstand any legal challenge.\u201d<\/p>\n In response, the Premier League claimed the PFA had been given \u201cnumerous opportunities\u201d to share its view on the proposed changes, adding: \u201cIt is the league\u2019s objective to maintain the Premier League\u2019s value, competitive balance and ensure clubs operate in a sustainable way.\u201d<\/p>\n