In a landmark decision that will reshape English football's financial landscape, Premier League clubs have collectively blocked the introduction of a controversial hard salary cap. The vote, held on November 21, 2025, saw clubs decisively reject the proposed 'Top-to-Bottom Anchoring' (TBA) system that would have limited spending based on the lowest-earning team's television revenue.
New Financial Framework Approved
While rejecting the salary cap, clubs gave their approval to a major overhaul of the league's financial regulations. The current Profit and Sustainability Rules (PSR), which have recently led to points deductions and sanctions for several clubs, will be replaced by two new systems: the Squad Cost Ratio (SCR) and Sustainability and Systemic Resilience (SSR) rules.
The cornerstone of this new framework is the Squad Cost Ratio (SCR), which will cap a club's on-pitch expenditure at 85% of its total football revenue plus net profit from player sales. This limit governs what the league terms 'football costs,' encompassing player wages, transfer fee amortisation, and coaching staff expenses.
How the New System Works
Unlike the rejected hard cap, the SCR provides clubs with significant flexibility. Clubs are allocated a multi-year allowance of 30% that they can use to exceed the primary 85% spending threshold. However, this flexibility comes at a cost: clubs utilising this allowance will incur a financial levy, and exhausting the full 30% buffer will result in sporting sanctions.
The new rules bring the Premier League's financial system closer to the model already employed by UEFA, though with an important distinction. While UEFA's equivalent operates with a stricter 70% threshold, the Premier League's 85% limit aims to achieve similar financial prudence while acknowledging the unique commercial landscape of English football.
Comprehensive Financial Monitoring
The unanimously approved Sustainability and Systemic Resilience (SSR) rules represent another crucial pillar of the new framework. This system is designed to provide comprehensive monitoring of a club's financial health across short, medium, and long-term horizons.
The SSR rules mandate that clubs must undergo three specific financial health assessments to ensure stability:
- The Working Capital Test
- The Liquidity Test
- The Positive Equity Test
These newly approved financial control systems, SCR and SSR, are slated to officially come into effect at the start of the 2026/27 season. The old Profitability and Sustainability Rules will remain active for the duration of the current 2025/26 campaign, giving clubs time to adapt to the incoming changes.
The decision represents a significant compromise between maintaining competitive balance and allowing clubs with larger revenue streams to invest accordingly, marking a new chapter in Premier League financial governance.
