In a significant move toward better financial governance, English Premier League (EPL) teams have unanimously approved new financial regulations during their shareholders meeting. Set to take effect in the 2026-27 season, these new rules will cap club spending at 85% of their revenues, emphasizing sustainability and financial responsibility within the league.
The Squad Cost Ratio (SCR) and Sustainability and Systematic Resilience (SSR) will replace the existing Profitability and Sustainability Rules (PSR). The previous framework allowed clubs to incur cumulative losses of up to £105 million ($138 million) over a period of three years. The new rules are designed to provide a more structured financial approach that prioritizes responsible spending.
Under the SCR, teams will be allowed to allocate 85% of their revenue for player salaries, coaching staff wages, agent fees, and amortization of transfer costs during a single season. This adjustment aligns the EPL with UEFA’s existing spending cap of 70% of revenue, placing EPL clubs that qualify for European tournaments in a position to adhere to stricter financial standards. The additional 15% spending allowance serves as a buffer for teams that do not qualify for UEFA competitions, supporting their transitional financial needs.
The SSR introduces three specific financial tests that clubs will be required to meet throughout the season. These assessments focus on short-term cash flow, liquidity over two seasons, and “positive equity,” which reflects a club’s overall financial health and leverage status. Such measures aim to reinforce the long-term financial resilience of clubs in the competitive landscape of football.
A total of 14 out of 20 clubs had to approve SCR for it to pass, and it received precisely that number of votes. The SSR passed unanimously, while a proposed “anchoring” system, intended to set spending limits based on the revenue of the league’s lowest-income club, garnered only seven votes. This approach would have resembled salary cap systems seen in North American sports leagues.
Recent analyses indicate that five clubs exceeded the 85% revenue threshold during the 2023-24 season. Bournemouth and Fulham recorded spending levels of 104% and 91%, respectively, making them notable exceptions. Meanwhile, Chelsea’s expenditure stood at 76%, the highest among the traditional Big Six clubs.
The Premier League’s commitment to maintaining its financial integrity reflects an ongoing collaboration among clubs aimed at preserving the league’s value, ensuring competitive balance, and fostering long-term financial health, as stated by league officials.
As the top-grossing soccer league globally, the Premier League generates nearly double the revenue of LaLiga and the Bundesliga combined. Despite this immense financial power, EPL clubs frequently post losses, with approximately 75% of them ending up in the red each year.
Highlighting the financial dynamics of the league, it was reported that during the 2025 summer transfer window, EPL clubs collectively spent $4 billion on player acquisitions, far surpassing the previous record of $3 billion set in 2023. This expenditure exceeded the combined spending of the other four major European leagues, showcasing the EPL’s dominant financial position in football. The net spending, after accounting for player sales, marked a record high of $1.6 billion, while the remaining leagues experienced a net receipt of around $400 million.
