Premier League Shifts Financial Landscape: PSR to be Replaced by SCR
The Premier League is set to overhaul it’s financial regulations, replacing the existing Profitability and Sustainability Rules (PSR) with a new Squad Cost Rule (SCR) starting next season. This change aims to address concerns surrounding the current system and promote greater financial stability within the league.
Recent assessments indicated several clubs where nearing potential breaches under PSR. Nottingham Forest, Leeds United, Fulham, and Bournemouth were identified as being especially close to exceeding the permitted loss thresholds. Wolverhampton Wanderers were also noted as being at 81 percent of the limit.
However, the financial positions of thes clubs have evolved. Bournemouth and Forest have both demonstrated progress, with Bournemouth benefitting from player sales and Forest improving their league position (at least during the previous season). Leeds United is also projected to see increased revenues following their return from the Championship. Fulham and Wolves appear in a less secure position, though enforcement of the new rules won’t begin until the following season.
A key challenge for newly promoted clubs has been the inclusion of Championship losses in their initial Premier League PSR calculations.Nottingham Forest’s recent breach, for example, was partially attributed to over £60 million in pre-tax losses incurred during their time in the Championship. The SCR, covering only a single season, is expected to offer promoted teams greater flexibility in squad investment, particularly if they are willing to exceed their “Green Threshold” in the season immediately following promotion.
The Abandoned Anchoring System
Alongside the SCR, the Premier League also considered a system known as “anchoring,” which ultimately failed to gain approval. Anchoring would have capped club spending on wages, transfer fees, and agent fees at five times the amount received by the club finishing in last place (20th).
Last season, Southampton finished 20th and received £109.2 million, meaning an anchoring limit of £546 million would have been in place. Forecasts suggested this limit would rise to £600 million for the 2025-26 season due to increased broadcast revenue. Anchoring would have represented a variable spending cap applicable to all 20 Premier League clubs.
Though, the proposal faced critically important opposition. The Professional footballers’ Association (PFA) threatened legal action, arguing that an artificial cap on earnings would be legally unsustainable. PFA CEO Maheta Molango stated, “you cannot artificially cap someone’s ability to make a living as this would just not withstand any legal challenge.”
The Premier League responded by stating the PFA had ample chance to voice concerns. Together, three leading football agencies – CAA Base, CAA Stellar, and Wasserman - also threatened legal action, citing a lack of consultation regarding both anchoring and the SCR.
