Premier League Poised to Replace profitability Rules with Squad Cost Ratio System
LONDON – The Premier League is preparing to vote next month on replacing its current Profit and Sustainability Rules (PSR) with a new squad cost ratio system, according to chief executive Richard Masters. The potential shift comes amid criticism of PSR from clubs including Manchester City, Newcastle United, and Aston Villa, who argue the existing rules limit spending capacity.
Introduced in the 2015/16 season to prevent overspending, PSR has resulted in multiple breaches and sparked debate over its effectiveness. The proposed new system would more closely align with UEFA’s financial regulations, which currently cap spending on player wages, transfers, and agent fees at 70 percent of a club’s revenue.
Masters revealed the Premier League is considering a higher cap of 85 percent, stating, “We are talking to our clubs about an alternative system… It’s about closer alignment with European regulation, which is squad cost ratio, which is a revenue test.” He acknowledged the current PSR system,a “look back profitability test,” has “strengths and weaknesses,” adding,”No system will be perfect.”
The Premier League generates £6.7bn in domestic broadcast rights for the 2025-2029 cycle, making it the world’s most lucrative soccer league. Masters emphasized the higher spending cap is intended to maintain the competitive edge of English clubs and encourage investment.
“Our system will be 85 percent because we always want our clubs to have the ability to invest,” he said. “The Premier League has been built on the back of investment in which international capital flows are coming in. We don’t want that to be stifled off.”
The new rules were initially slated for implementation this season but will now be put to a vote by Premier League clubs next month.
