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The Premier League has approved a sweeping overhaul of its financial rulebook, with clubs voting on Thursday to introduce a new regulatory framework centred on Squad Cost Ratio (SCR) and Sustainability and Systematic Resilience (SSR). The changes will come into force from the start of the 2026/27 season.
The decision follows more than a year of consultation involving club shareholders, senior financial and legal executives, working groups, and independent economic and legal experts. While SCR and SSR were approved, a third proposal, Top to Bottom Anchoring (TBA), did not receive sufficient support to pass.
New spending limits under Squad Cost Ratio
The headline element of the reform is SCR, which will cap the amount clubs can spend on first-team football operations. Under the new system, clubs will be limited to spending 85% of their football revenue plus net profit or loss from player trading on their squad.
Teams will also receive a rolling multi-year allowance worth up to 30% of revenue that permits spending beyond the cap. Any use of that allowance will trigger a levy, and once it is fully used, clubs will need to comply with the 85% limit or face sporting sanctions.
The Premier League says the scrapping of the existing model in favour of SCR aligns its approach more closely with UEFA’s financial regulations, which currently use a 70% spending threshold. Other key features include in-season monitoring and sanctions, incentives for investment off the pitch, protections against sporting underperformance, and a simplified financial framework focused on football-related costs.
Introducing Sustainability and Systemic Resilience
Alongside SCR, clubs also approved new SSR rules designed to assess long-term financial health. The system incorporates three tests:
- Working Capital Test
- Liquidity Test
- Positive Equity Test
These measures are intended to ensure clubs operate sustainably in the short, medium and long term, reducing the risk of financial instability across the league.
Years of consultation and trials
The Premier League said collaboration with clubs since 2023 had been central to forming the new rules, with the aim of protecting the league’s value, maintaining competitive balance and ensuring robust financial sustainability.
At the league’s Annual General Meeting in June 2024, clubs agreed to trial both SCR and TBA on a non-binding, “shadow” basis. That trial has continued throughout the current season, enabling the league and clubs to test the rules in practice and assess how UEFA’s similar SCR framework operates.
The Professional Footballers’ Association (PFA) and football agents were among the stakeholders consulted during the process.
What happens next
The new regulations will be formally published in Section E of the Premier League Handbook in the coming months. Meanwhile, the league’s existing Profitability and Sustainability Rules will remain active through the end of the 2025/26 season, before being replaced by the new system.
The Premier League says the reforms are intended to give all clubs “the opportunity to aspire to greater success” while ensuring the long-term financial health of the competition.
Featured Image Credits: Pixabay / KelvinStuttard, Pixabay / Haiko
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