Premier League clubs vote to replace PSR with new financial rules

It will be replaced with a new model named SCR

A shareholders meeting was held on Friday where the clubs discussed the implementation of new measures; top to bottom anchoring, squad cost ratios (SCR) and the sustainability and system resilience (SSR).

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Any agreed changes will be brought into force from the 2026/27 season.

The "top to bottom" anchoring measure would have been able to limit spending on wages and transfer fees, and agent fees to a maximum of five times the amount paid in prize money and broadcast revenue to the club that finished bottom in the table, however it received only seven votes in favour and 12 votes against with one abstention.

While no agreement was made on anchoring, clubs did vote in favour of SCR and SSR.

SCR will bring about the largest change as it will fully replace the league's infamous profitability and sustainability (PSR) rules.

Currently these rules set a limit on club losses to a maximum of £105million ($137m) over a three-year period.

Both Nottingham Forest and Everton have faced points deductions in the past for failures to comply with PSR.

What does SCR mean for the league?

Per The Athletic's report on the new regulations, SCR is defined as "a direct limit on how much clubs can spend on their players and head coach."

Adding: "SCR broadly covers one year of club activity, except for player sales (see below), and Premier League SCR will be assessed across a season."

Essentially, over one year clubs cannot spend at a rate higher than 85% of their incoming revenue. If this boundary is breached, they would then face a Accounts Confirmation Test.

The one-season model has been put in place in order to prevent matters dragging over across multiple seasons, as was the case under PSR.

What is SSR?

The league have provided a statement summing up what SSR will mean for clubs, it reads: "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."

Clubs are only likely to face a serious punishment if they surpass the Premier League's "Red Threshold" after review.

What we know about punishments so far is that "Red Threshold breaches" will lead to a minimum six-point deduction, with a further point taken off for every £6.5 million of overspending.