Premier League clubs to vote on new financial reforms

Experts in sports law Julian Diaz-Rainey and Gabrielle Armstrong of Pinsent Masons said that if any of the three proposals are implemented, it would represent a major shift from the profitability and sustainability rules (PSR) currently in effect in the Premier League and would have a major bearing on what clubs could spend on player transfers and wages.

Under the PSR, clubs are permitted to run up losses of up to £105 million over a rolling three-year period. PSR has been the subject of high-profile legal battles for the likes of Everton, Nottingham Forest and Leicester in recent years.

The most fundamental change to this current system that has been proposed would be the introduction of so-called a ‘top-to-bottom anchoring’ rule (TBA). Under TBA, every club’s spend on things like transfers, salaries, and agents fees would be capped at no more than five times the revenue that the club that finished bottom of the league in the previous season obtained by way of central payments from the league – those being payments for things like prize money and allocation of funds from broadcasting rights sold.

According to the Guardian, if this rule was in effect now, clubs’ spending would be capped at around £550m – Southampton, which finished 20^th in season 2024-25, earned £109.2m in central payments during the season.

An alternative squad-cost ratio rule has also been proposed (SCR). Under SCR, clubs’ spending on football costs would be capped at 85% of their total annual revenue. A similar rule is already in effect for clubs – including Premier League clubs – that operate in the European club competitions run by UEFA. In that case, the cap is set at 70% of revenue.

The third measure under consideration is referred to as the sustainability and system resilience regime (SSR), under which new tests to examine the future financial sustainability of Premier League clubs would be introduced. Diaz-Rainey and Armstrong said that proposal bear resemblance to plans outlined by the new Independent Football Regulator for the new licensing regime for English football that is due to be introduced as early as next season.

Ahead of the vote in London on Friday, Diaz-Rainey said: “Whether any of the reforms will get the requisite support of clubs to be voted in remains to be seen – 14 of the 20 clubs would need to coalesce behind any one of the proposals for the vote to carry. However, if they do, this could signal a significant reform to the current PSR framework.”

Armstrong added: “With significant sporting sanctions set to imposed for breaches of the proposed rules, it is unlikely that any of the reforms will put an end to the costly legal battles we have seen of late.”