Premier League Shifts Financial โLandscape: PSR to be Replaced โคby SCR
The Premierโ League is set to overhaul it’s financial regulations, replacing the existingโข Profitability and Sustainability Rules (PSR) with a new Squad Cost Rule (SCR)โค starting next season. This change aims to address concerns surrounding the current system and โคpromote greater financial stability within the league.
Recent โassessments indicated several clubs where nearingโข potential breaches โunder PSR. โคNottingham โคForest, Leeds United, Fulham, and Bournemouth were identified as being especially close to exceeding the permitted loss thresholds. Wolverhampton Wanderers โwere also noted as being at 81 percent of the limit.
However, the financial positions of thes clubsโข have evolved. Bournemouth and Forest have โboth 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 โincreased revenues following their โคreturn from the Championship. Fulham and Wolves appear in a less secureโฃ position, thoughโข enforcement of the new rules won’t begin until the following season.
A key challenge for newly promoted clubs hasโ been the inclusion of Championship losses in their initial Premier League PSR calculations.Nottingham Forest’s recent breach, for example, was partiallyโ attributed to over ยฃ60 million inโฃ pre-tax losses incurred during their time in the Championship.โค The SCR, covering only a single season, is expected to offer promoted teams greaterโข flexibility in squad investment, particularly if they are willing to โคexceed their “Green Threshold” in the season immediately following promotion.
The Abandoned Anchoring System
Alongside the SCR, the Premier League also considered a system knownโฃ as “anchoring,” whichโค ultimately โfailed to gain approval.โฃ Anchoring would have cappedโ club spending on wages, transfer fees, โขand agent fees at five times the amount received by the club finishing in last place (20th).
Last season, Southampton finished 20thโข and received ยฃ109.2 million, โคmeaning an anchoring limit of ยฃ546โ million would haveโข been in place. Forecasts suggested this limit โwould rise to ยฃ600 million for the 2025-26 season due to increased broadcast revenue. Anchoring would have represented a variable spendingโข cap applicable to all 20 Premier โคLeague โclubs.
Though, the proposal faced critically important opposition. The Professional footballers’ Association (PFA) threatened legal action, arguing that โฃan artificial cap onโ earnings would be legally unsustainable. PFA CEO Maheta Molango stated, “you cannot artificially cap someone’s ability to make a livingโ as this wouldโ just not withstand any legal challenge.”
The Premier League responded by stating the PFA had ample chance to voice concerns. Together, โฃthree leading football agencies – CAA Base, CAA Stellar, and Wasserman โ- also threatenedโฃ legal action, citing aโ lack of โconsultationโ regarding both anchoring and the SCR.
