Premier League clubs will be bound by a new set of financial regulations as the 2026/27 season commences as the previous Profitability and Sustainability Rules (PSR) are replaced.

Squad Cost Ratio (SCR) and Sustainability and Systemic Resilience (SSR) will take over from the PSR system after clubs voted for a change in regulation. A further vote on top-to-bottom “anchoring”, which would have effectively introduced a spending cap for all clubs, did not receive sufficient support.

The Premier League said the new SCR and SSR rules were introduced "to promote the opportunity for all of its clubs to aspire to greater success, while protecting the competitive balance and compelling nature of the League”.

**What is SCR? **

The Premier League explained that Squad Cost Ratio (SCR) will limit Premier League clubs’ on-pitch spending to “85 per cent of football-related revenue and net profit/loss form player sales”.

In effect, clubs can’t spend more on transfers, wages and agent fees than 85 per cent of their total income. It has been introduced because it largely mirrors Uefa’s existing rules, which carry a stricter limit of 70 per cent.

You may remember that Chelsea and Aston Villa were both sanctioned for breaching Uefa’s squad cost ratio of 70 per cent, and were fined €11m and €6m respectively. All Premier League clubs competing in Europe must continue to comply with this limit.

But, clubs will also have “additional headroom” to exceed the 85 per cent threshold. Clubs will initially be allowed to go to 115 per cent over one season, but in doing so they would incur a levy and detract from their headroom by the same percentage breach in the next season.

The Premier League said that once a club breaches the “Red Threshold”, they will be subject to sporting sanctions in the form of a points deduction. “In summary, this will be a fixed six-point deduction, which increases by one point for every £6.5m spent over the Red Threshold,” the Premier League said.

**What is SSR? **

The Premier League said Sustainability and Systemic Resilience (SSR) “involves three tests that are applied throughout the season to support short, medium and long-term financial sustainability of all clubs”.

The Premier League will ask clubs to demonstrate that they have a sound business plan. It’s essentially to stop clubs from going bust if they were to suffer from a sudden loss of revenue and ensuring they are not operating with “unreasonably high levels of debt”.

If there are breaches, the Premier League said the focus will be on monitoring and helping a club return to a compliant position, rather that punishing it through sporting sanctions. But the Premier League added that it may block clubs from registering new contracts or enforce a spending limit if they are not SSR compliant.

What is TBA?

Top-to-bottom anchoring (TBA) would have limited every Premier League club to a hard spending cap, tethered to the income of the Premier League’s bottom club.

But support for the measure from the 20 Premier League clubs did not meet the 14 votes required. the The Professional Footballers' Association was also against the proposals are argued it would have effectively represented a salary cap.