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A train that has been rolling down the tracks for a year or more finally reached the Premier League last week and, unanimously, its 20 clubs indicated they were prepared to jump on board.

A provisional agreement was reached at a shareholders meeting in London that will see new financial rules introduced ahead of the 2025-26 season.

Squad cost measures will supersede the Premier League’s current profit and sustainability regulations (PSR), with spending limits shaped by a club’s turnover and player sales.



The Athletic analyses how different life under the new regulations might be.

What are the new PSR rules and when do they come into force?

In a Premier League season that has seen both Everton and Nottingham Forest docked points for breaches of spending limits, the suitability of PSR rules first introduced in 2013 has increasingly been drawn into question.

A three-year accounting period has traditionally allowed for attributable losses of £105million ($130m, a figure that reduces for seasons spent in the Championship), but there has been a gradual acceptance of the need for reform.

UEFA has helped accelerate that with its changes introduced over the past 18 months.

The 20 clubs, whose representatives met in London last Thursday, agreed in principle to introduce new financial fair play rules from the start of the 2025-26 season that will effectively mirror the UEFA model.

A new framework will limit Premier League clubs competing in Europe (usually seven or eight each season) to spending 70 per cent of turnover but — and this is the key difference from UEFA — allow the remainder of the division to push up towards the 85 per cent mark.

Rather than having spending limits capped at 85 per cent, they can’t go beyond the 70 per cent mark.

The Premier League’s two-tier system is designed to afford its lesser lights greater spending powers.

That figure will rise again once central distributions increase in an expanded competition format next season.

The clubs regularly competing in the Champions League will not feel too much of a squeeze with a 70 per cent cap, but those who reach Europe only sporadically, especially when only qualifying for the less lucrative Europa League or Conference League, could effectively see their spending powers fall behind those they might previously have considered equals in the Premier League.

Take West Ham United in the Europa Conference League last season, who will offer similar figures to those Aston Villa can expect from this season’s competition, as a case study.

You’re back to £210m if you’re working to 70 per cent.”

Are any clubs already in danger of breaching the new rules?

There is still more than a year before the proposed changes could become fully operational and, therefore, ample time for finances to be improved.

Yet placing the new spending limits on the Premier League’s 20 clubs last season illustrates compliance will not be straightforward.

The obvious caveat is that clubs spent without the 70/85 per cent rules in place, but calculations suggest almost half of the Premier League might have encountered issues under squad cost rules.

Wetherspoon compiled an estimated cost-control revenue figure and set that against squad costs for 2022-23.
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