Premier League to close asset-sale loophole | OneFootball

The Premier League has approved a sweeping overhaul of its financial regulations, voting to ban clubs from selling assets to related parties and introducing a new Squad Cost Ratio (SCR) model designed to curb excessive spending while promoting long-term sustainability, according to reports from BBC Sport.

End of a Controversial Loophole

From next season, clubs will no longer be able to sell non-footballing assets, including hotels and women’s teams, to sister companies to strengthen their financial position. The practice, highlighted when Chelsea sold two Stamford Bridge-adjacent hotels to an associated business for £76.5m in 2024, had become a flashpoint in debates over the fairness and integrity of the league’s Profit and Sustainability Rules (PSR).

The vote to adopt SCR passed by the narrowest possible margin: 14 in favour, six against.

A New Financial Framework

Under SCR, clubs must limit annual squad costs, including wages, transfer amortisation and agent fees, to 85% of revenue. For teams in European competition, UEFA’s stricter 70% ceiling applies. This shift moves the financial conversation away from three-year profit-loss calculations and towards direct scrutiny of season-by-season squad spending.

A rolling 30% “allowance” gives clubs some flexibility, effectively creating a 115% upper buffer before sporting sanctions are triggered. Exceeding the “Green Threshold” (85%) results in a financial penalty; surpassing the “Red Threshold” (85% plus allowance) brings an automatic six-point deduction, rising for every £6.5m overspent.

The Premier League argues the new system introduces transparency, protects competition and allows clubs to invest sensibly off the pitch.

Winners, Losers and Dividing Lines

Wealthier clubs with strong commercial operations are broadly comfortable with SCR. But financially smaller sides, including Bournemouth, Brentford, Crystal Palace, Fulham, Brighton and Leeds, opposed the shift, fearing the difficulty of competing when wage bills are tied so tightly to revenue.

Clubs such as Aston Villa and Newcastle, previously constrained by PSR despite ambitious sporting aspirations, may see limited benefit due to UEFA’s more stringent cap.

The proposal for “anchoring,” capping spending at five times the distribution earned by the bottom club, was heavily defeated. Top sides feared the mechanism would eventually restrict their ability to compete with Europe’s elite. Meanwhile, sustainability rules, aligned with requirements of the incoming Independent Football Regulator, passed unanimously.

As the league prepares for the 2026-27 rollout, clubs now face a new financial landscape: tighter, clearer, and with far less room for creative accounting.

GFN | Finn Entwistle