EPL Introduces New Squad Cost Ratio Rules, Replacing Previous PSR System
London, UK - The English Premier League has unveiled a new set of financial regulations, shifting from the previous Profit and Sustainability Rules (PSR) to a squad cost ratio system designed to better control club spending. The change, approved by clubs, introduces limits on how much of their revenue teams can spend on player wages and transfer fees, marking a important overhaul of financial oversight in English football.
The move comes as the league seeks a more sustainable financial model and aims to address concerns about competitive imbalances fueled by disproportionate spending. Previously, clubs risked breaching PSR by incurring aggregate losses exceeding £105 million over three rolling seasons, tho certain expenditures like investment in women’s teams weren’t counted as losses. The new regulations represent a departure from this loss-based approach, focusing instead on expenditure relative to income.
The newly adopted rules establish a ratio that limits spending on player costs – including wages, transfer fees, and agent fees – to a percentage of club revenue. Initially, this ratio will be set at 70% in the 2024/25 season, decreasing to 65% in 2025/26, and ultimately reaching 60% in 2026/27. Clubs exceeding this ratio will face sanctions, ranging from fines to potential point deductions.
A previous proposal, known as ”anchoring,” which would have tied spending to the revenue of the league’s lowest-earning club, failed to gain sufficient support from clubs. The Professional Footballers’ Association had even threatened strike action should anchoring be implemented.
The Premier League emphasized that the new system was developed through “extensive consultation with clubs and a wide range of stakeholders” and is designed to operate in conjunction with UEFA’s financial regulations and the objectives of the forthcoming Independent Football Regulator. The league believes this new approach will foster greater financial stability and a more level playing field across the competition.
