The Premier League is set to replace its current Profitability and Sustainability Rules (PSR) with a new financial framework from next season, introducing a Squad Cost Ratio (SCR) system that could result in automatic six-point deductions for breaches.
Under the new rules, clubs' spending on player wages, transfers, agent fees, and head coach salaries will be capped at 85% of total football revenue, or 70% for clubs competing in UEFA competitions. The SCR system aims to align with UEFA's financial regulations and promote sustainability.
Clubs that exceed the maximum 115% threshold of SCR will face an automatic fine and a non-negotiable six-point deduction. However, the rules offer flexibility for off-pitch investments, such as stadium upgrades and academies, which will not count against the spending limit.
The new system has been operating on a shadow basis for the past two seasons to allow clubs time to adjust. The first official SCR Compliance Test is scheduled for March 1, 2027, with an Accounts Confirmation Test to follow in June 2027 to confirm any sanctions.
Clubs that keep squad costs at or below the Green Threshold (85% of revenue) will be deemed compliant, while those exceeding the Red Threshold (115% of revenue) will face penalties. The Premier League says the changes are designed to protect competitive balance and ensure the long-term success of its clubs.
