English Premier League clubs vote in favor of new financial rules

The PSR related to the club’s balance sheet for all revenues over a three-year period, while the SCR only related to team costs on a seasonal basis.

Many clubs, in good financial positions, were happy with the PSR and wanted to maintain the status quo.

Bournemouth, Brentford, Brighton, Crystal Palace, Fulham and Leeds voted against the change.

The new rules will operate in a dual system, with clubs in European competitions having to adhere to UEFA’s SCR limit of 70% – so a club could be penalized by UEFA but compliant with the Premier League.

The cap is intended to protect the competitive balance of the Premier League, given the increased income those clubs competing in Europe will receive.

Both Chelsea and Aston Villa were hit with heavy fines by UEFA for breaches in the 2024-25 season, when the maximum in Europe was 80%.

The Premier League has added some wiggle room too, with a multi-year rolling allowance of 30% allowing clubs to spend beyond the permitted limit. It allows clubs to invest before revenue, variance or poor sporting performance.

An assessment is carried out in March each year, and this allowance is crucial to determining potential sporting sanctions applicable in the same season.

The 85% mark is known as the green threshold. Spend more than that and you will receive a financial penalty, although this would be much less punitive than UEFA.

The red limit is 85% plus allowance. Go beyond that, which is a fixed six-point deduction that increases by one point for every £6.5m spent above the ‘red threshold’.

Think of it this way. Each club will start next season at 85% + 30%, effectively 115%.

Any clubs spending more than 85% will face a fine, but must forfeit more than 115% of points.

But these percentages will change for the period 2027-2028.

If a club spends 105% on its squad next season, that means they have used 20% of their allocation, and for 2027-28, their maximum spending before a potential sporting penalty is 95%.

If the club spends less than 85%, it can increase the allowance back to the maximum of 30%.