New Premier League Financial Rules: How Will They Impact Clubs? | OneFootball

With the end of the 2025/26 Premier League season within sight, many clubs are starting to turn their attention towards next campaign already.

But with new financial rules being put in place, how might things change for those competing in England’s top flight next season?

Why the change?

The existing financial rules in the Premier League, the Profitability and Sustainability Rules (PSR), have come under considerable scrutiny. Rules such as this were implemented to prevent clubs from facing bankruptcy by placing a focus on profits and limiting losses. However, on a day-to-day basis, this isn’t what most fans saw in these rulesets.

It’s easy to understand the frustration of fans at these rules. Take clubs like Aston Villa and Newcastle United, for example. Both are historical clubs with impressive stadiums, large financial might and a desire to push towards the top of the table and disrupt the status quo. Both clubs, however, have struggled to adhere to PSR while maintaining this upward projection.

Missing out on the Champions League spots or dropping out of Europe altogether means considerably smaller transfer budgets, yet qualifying for European competition means a requirement for squad improvements and more depth to deal with the increased fixture load. Both clubs have had to adopt a sell-to-buy model, constantly selling their best talent to adhere to financial rules and sustain their ambition.

Then, we turn to the promoted teams. After slogging through the relentless 46-game season of the Championship, sides coming up from the second tier are now faced with the herculean task of surviving in the Premier League, the most elite league in the world.

This means new star players, new depth, and for some, new coaching staff too. But PSR is a three-year rolling tally, meaning all losses made in the previous two seasons, including the Championship, where there are a lot of losses, count towards this figure too. This means the task is to attempt to survive, while being shrewd and sensible enough that should teams be relegated, they don’t put themselves in financial trouble.

On the other hand, the biggest clubs, notably Manchester United and Chelsea, in recent years seem to be able to spend almost whatever they want regardless of where they finish in the table. Both of these teams have had seasons where they missed out on European competition altogether, yet were still able to outspend almost everyone else in the league, whilst not breaking PSR. Their enormous commercial revenue means that even when missing out on the estimated €100 million or more of a decent run in the Champions League, they are rarely at risk of overspending.

The issue is that PSR was concerned almost exclusively with a football club’s profits over three years, yet the vast majority of clubs don’t turn a profit, making this seem a strange measure.

What are the new rules?

The new financial rules, brought in through popular vote by current Premier League clubs, are called ‘Squad Cost Ratio’ (SCR) and ‘Sustainability and Systemic Resilience’ (SSR).

SSR was voted in unanimously by all 20 teams involved, likely in part because there are no sporting repercussions for breaking this rule. No financial penalty or points deductions can be imposed upon an SSR breach; instead, a business plan of how to get back on track must be submitted. This rule is primarily a measure of liquid capital. In simple terms, if you stopped making money tomorrow, such as if your stadium had to close, would you have enough money on hand to pay this month’s wages?

As there are no real punishments for breaking SSR, it has little impact on the fans; instead, it makes the biggest difference to the business teams at each club. Far more important to the fans is SCR.

SCR was slightly less popular, being voted in 14-6. These rules change the way that spending is measured, with only ‘on-pitch’ spending measured, meaning player, head coach and agent costs. This includes wages, transfer fees, amortization and agent fees, but means that considerable costs such as corporate and coaching staff wages, along with investments in stadiums and commercial sectors, are now exempt.

These new rules limit this ‘on-pitch’ spending to 85% of a club’s football-related revenue and net profit/loss from player sales, with some leniency on this figure. These limits are agreed with the Premier League at the start of the season, based on financial performance from previous seasons, and are monitored on 1 March, after the winter transfer window and again in June and October at the end of the season if the team is above the 85% threshold.

The hope with these more proactive, mid-season checks is that any club found guilty of breaking SCR’s red threshold (85% plus their leniency percentage) can be given a standardised points deduction (six points for a breach, with an additional point per €7.5 million overspend), and any overspend of the green threshold (original 85 or 70%) can be fined accordingly, in the same season that the breach occurred.

This means teams will face repercussions for breaking the rules in the season where they see the most benefit from those breaches, and a standardised deduction system negates the need for lengthy and subjective decisions on deductions. This should make the process clearer, easier and faster with less appeals and ambiguity.

There is some leniency on this cap, with teams able to spend up to 30% over; however, this figure is exhaustive. For example, if a team were to spend 10% over their cap in season 1, their new leniency in season 2 would fall to 20%, making their new hard cap 105%. Breaching this cap in season 2 by spending 106% would cause immediate sporting sanctions. This threshold can be ‘regained’ by 10% per season by remaining compliant with the 85% cap.

Additionally, clubs competing in UEFA competitions will be given a 70% spending cap, rather than the standard 85%. The hope with this lower cap is that the additional revenue gained from competing in European competition won’t allow clubs to spend significantly more than any other Premier League team fighting for European places. The Premier League hope that this will encourage competition in the league and result in different teams making it to Europe.

Who benefits?

The most significant change for many clubs will be the larger focus on single-season income, and the only costs in the calculations being ‘on-field’ costs, i.e. the players at a club. This means staff, commercial investments, stadium expansions and investments in the women’s and youth teams are all excluded from SCR calculations. This is effectively a free pass from the Premier League for clubs to make these long-term investments.

While this is great for many clubs, allowing them to introduce more revenue streams and improve their facilities, it does mean that clubs that already have huge commercial income, matchday revenue and valuable youth teams are at an inherent advantage.

The ‘big six’ are the most obvious examples of this. Their multinational brands and matchday incomes mean that their squad cost cap is going to be very high, allowing for continued heavy spending and little incentive to stop. Large stadiums, along with events being held at their facilities outside of the footballing season, such as concerts, give these teams far more revenue than many of their competitors.

A group of teams benefiting less from this are the newly-promoted teams. The new ruleset, looking forward to the season ahead, rather than back at the last three seasons, means that many sides towards the bottom of the table can treat each season as a fresh start.

These clubs will face no limitations due to losses made in the EFL Championship, and a full season ahead of Premier League prize money to fund their squad improvements. Many fans of these clubs will hope this makes Premier League survival more realistic, making competing with established sides a more level playing field.

Who does this hurt?

Unfortunately, the nature of these new rules means that a specific subset of clubs, many of whom have previously been considered to be some of the best-run clubs in England, are going to suffer.

Clubs that currently make a lot of money, but not from commercial revenue, are going to find these new rules difficult. This includes Brighton and Hove Albion, Crystal Palace, AFC Bournemouth, Brentford, amongst others.

The issue for these clubs is that they funded their ambition through selling players for large fees, reinvesting that money in low-cost replacements, and developing them into superstars. Player sales are still included in revenue under the new rules, but the forward-looking nature makes capitalising on these sales difficult.

For example, for Brighton to spend the €130 million that Chelsea paid for Moises Caicedo, they almost have to know ahead of time that they were expecting to sell the Ecuadorian for a fee in that region. SCR estimates are created at the start of the season, based on estimates of income over the coming season.

Even if Brighton expected to part ways with the player, claiming that they knew they were going to get a British record fee for him would likely have raised eyebrows, with his ‘fair market value’ at the time €75 million according to Transfermarkt.

Brighton would then need to spend most of this money in that same season, with any one-off player sale only adding to their spending cap for that season, rather than the next three under PSR. Their cap for the coming year may increase slightly, due to a larger income the season before, but this may still feel more restrictive than under the previous ruleset.

When interviewed by The Athletic, Steve Parish, Crystal Palace chairman, had this to say about SCR: “You won’t be able to invest the money up front that you used to be able to.Why do you want just our group to be able to spend less money?”

Here, he is referencing the forward-looking aspect of the new ruleset and how it will hurt the mid-table, aspirational clubs. No longer can these ambitious clubs spend heavily on improvements or replacements, with the knowledge that players would be moving on to balance out the finances later on, or that they have some wiggle room from past sales. Clubs need to be able to adhere to the rules here and now, or face quick and potentially serious repercussions.

Selling valuable players on a season-to-season basis is encouraged for these aspirational clubs that don’t have massive commercial revenue, with few other short-term options available to keep up with the financial might of those teams above and around them.

It is clear to see then why the six teams that voted against these rules were Brentford, Brighton, Bournemouth, Fulham, Crystal Palace and Leeds, teams that all fancy themselves a run at those European spots over the coming years.

An improvement?

These new rules clearly have their flaws, and may well make it harder to close the gap to the elite sides in the short run, but do solve many of the issues that PSR faced.

The revenue streams measured are now entirely ‘on-pitch’, allowing clubs to develop far more reliable revenue streams, without having to worry about adhering to financial fair play. These changes will take time, however, with the growth of these commercial streams not happening overnight.

The increased speed and consistency of dealing with financial breaches is also a welcome change for many clubs and fans, and makes the system feel more fair. No longer will teams be punished for overspending three years ago; they will face that now.

Overall, this new ruleset feels like a step in the right direction, but maybe not the perfect solution yet.

We should see more competition at the bottom of the table, with promoted clubs being put on a more level playing field, and we may see a larger range of competitors in UEFA competitions on a season-to-season basis.

The main concern is that in the short term, these rules may help create a dynasty at the top for the commercially dominant ‘big six’.