Premier League clubs removed the option to sell assets like hotels or women’s teams to themselves to bypass financial regulations.
Clubs approved a new Financial Fair Play model based on squad costs after a narrow vote in London.
They considered three approaches to replace Profit and Sustainability Rules, and Squad Cost Ratio won with 14 votes.
The league will require clubs to cap overall squad expenses at 85% of revenue from 2026–27.
Clubs playing in Europe must meet Uefa’s lower limit of 70%.
Squad costs include wages, transfer payments and agents’ fees.
The shift closes the loophole that allowed teams to use capital asset sales to stay compliant.
Chelsea sold two hotels to a related company last year to stay within PSR limits.
Everton transferred their women’s team to the parent company, and reports suggest Aston Villa agreed to do the same.
The new framework will base assessments only on revenue generated by football activity.
Clubs supported sustainability rules unanimously to outline long-term financial plans.
Anchoring, which linked top spending to the bottom club’s income, failed after twelve clubs opposed it.
A Premier League statement said the SCR model seeks to broaden opportunity and align with Uefa’s system.
The league highlighted transparent monitoring, safeguards against sporting risk, controlled forward spending and reduced complexity.
How New Spending Rules Work
PSR evaluated all income over three years, while SCR targets seasonal squad costs.
The dual system means clubs in Europe must follow Uefa’s 70% limit while possibly meeting Premier League thresholds.
The higher domestic limit helps maintain competitive balance for teams earning more from European matches.
Chelsea and Aston Villa received major Uefa fines for breaches when the European limit stood at 80%.
The Premier League introduced a rolling 30% allowance that lets clubs spend beyond the cap within limits.
Officials review each club in March to decide on possible sporting penalties for the same season.
The 85% point marks the Green Threshold, and clubs exceeding it receive fines.
The Red Threshold stands at 85% plus the 30% allowance; crossing it triggers a six-point deduction.
Each additional £6.5m spent above the Red Threshold adds another point docked.
Every club starts the next season with a practical ceiling of 115%.
Teams must exceed 115% to lose points but face fines after passing 85%.
Percentages will change for 2027–28 after clubs use or regenerate their allowance.
A team spending 105% next season will use 20% of its allowance, dropping its next limit to 95%.
A team spending below 85% can restore the allowance back to 30%.
Impact on Different Clubs
Several financially strong clubs wanted to retain PSR and viewed SCR as unnecessary.
Clubs with powerful commercial operations will adjust easily to the new framework.
Teams with smaller budgets dislike linking wages to income because it restricts flexibility.
Bournemouth, Brentford, Brighton, Crystal Palace, Fulham and Leeds voted against SCR.
Bournemouth run a small stadium but must fund Premier League-level salaries, raising concerns.
Fulham face similar pressure, although smart transfer moves can ease the impact.
The combined 85% cap and 30% buffer give all clubs time to adjust their strategies.
Aston Villa and Newcastle disliked PSR limits on investment but must still work under Uefa’s 70% rule in Europe.
Anchoring received little support because top clubs split opinions on long-term effects.
Manchester City and Manchester United worried growing revenue could eventually force breaches.
Arsenal and Liverpool supported anchoring to curb widening gaps, but it still failed.
TBA proposed tying spending to five times the bottom club’s TV income, which would produce a £600m ceiling.
SCR rules ensure no club will reach that limit, reducing the need for anchoring.
Some clubs feared anchoring might hinder their ability to compete with major European sides.
The players’ union warned that anchoring could act like a wage cap and trigger legal disputes.
Concerns also arose that declining broadcast income could lower future caps.
Why Sustainability Rules Passed Easily
Clubs quickly accepted sustainability rules because they already need to meet future regulatory requirements.
The Independent Football Regulator will soon demand financial projections for short, medium and long-term periods.
Clubs must prove they can fund operations responsibly and plan for stable growth.
Authorities will monitor finances and impose measures to restore compliance after breaches.
These actions may include spending limits or adjustments to a club’s debt structure.
