Changes to PSR/FFP

Premier League clubs have reportedly agreed in principle to adopt new rules to control costs.

The current Profit and Sustainability Rules, previously known as Financial Fair Play, allow for losses of £105million over a three-year cycle and have resulted in recent points deductions for Everton and Nottingham Forest.

However, many more clubs have been forced to remain stagnant in recent transfer markets to avoid tipping over the limit and critics have claimed that they stifle ambition.

A number of alternative options, such as a luxury tax and salary cap, have been discussed by fans and pundits but the league appears ready to press ahead with a squad-cost ratio system.

This will allow clubs to spend up to 85 per cent of their revenue on transfers, wages and agent fees. A similar system is being adopted by UEFA whereby clubs in European competition can only spend 70 per cent of their income.

Thursday’s Premier League shareholders meeting saw the 20 clubs hold two votes on the new rules, with Sky Sports reporting that one reached a unanimous verdict. Now agreed in principle, the league will aim to enshrine in it their rulebook at their summer AGM.
Critics of the squad-cost ratio say it will only serve to keep the existing established order in tact, with the current biggest clubs able to bring in the most revenue. There are also questions over how clubs will be allowed to artificially increase revenue via sponsorships with businesses related to their ownership, particularly clubs with owners linked to wealthy states.

Profit and Sustainability Rules are expected to remain in place for the 2024-25 campaign, which could be used as a transition period to begin the squad-cost ratio.
The threat of points deductions is also set to be part of the new rules in some way.

Amid the Premier League’s internal discussion over its own financial guidelines, the government continues to press ahead with a new Independent Football Regulator, which could have the power to enforce its own set of rules on ensuring football clubs are run sustainably.