PSR is gone: the Premier League spending rules that replaced it

In short: the Profitability and Sustainability Rules stopped applying this season. In their place the Premier League caps squad spending at 85% of football revenue, punishes the first band of overspending with a cash levy rather than points, and only reaches for a deduction at 115%. The era of clubs being docked points for accounting losses is over almost as soon as it began.

Everton were deducted ten points in November 2023, reduced to six on appeal in February 2024, and docked two more that April for a second breach. Nottingham Forest lost four points in March 2024. For two seasons, English league tables were decided in arbitration.

Those punishments were handed down under rules that no longer exist. On 21 November 2025, Premier League clubs voted to replace PSR with a Squad Cost Ratio, and it took effect from the start of 2026/27 — the season now under way.

What PSR was, and why it produced points deductions

PSR allowed a club to lose up to £105 million over three years, provided the losses were covered by secure owner funding. Without that funding the limit dropped sharply.

Two features made it explosive.

It was a loss test, so it caught clubs whose accounts went wrong rather than clubs whose spending was extreme. And its only meaningful sanction was a points deduction, because the Premier League had no intermediate instrument. A breach was either ignored or it changed the league table. There was nothing in between.

That is a crude enforcement design, and it produced exactly the outcome you would predict: sanctions that felt arbitrary in size, arrived mid-season, and were argued over by lawyers while the football continued around them. Forest’s breach was larger than the deduction implied; Everton’s first punishment was cut by 40% on appeal. Neither club could plan around a number nobody could predict.

What the Squad Cost Ratio does instead

SCR restricts spending to 85% of football-related revenue and net profit or loss from player sales.

Squad costs are player and head coach wages, agents’ fees, and amortisation or impairment of transfer fees. Staff outside the playing squad — administrators, assistant coaches, the wider coaching team — are excluded. This matters: the rule targets what a club pays for playing talent, not what it costs to run a football club.

Note what disappeared. PSR asked whether you lost money. SCR asks what share of your income the squad consumes. That is the same conceptual move UEFA made in 2022, for the same reason: a ratio is much harder for an owner to fix with a cheque, because a cheque is not football revenue.

The ladder, and why points are now a last resort

The clever part is what sits between compliance and catastrophe.

Every club starts with a multi-year allowance of 30%, creating a Red Threshold at 115%. Between 85% and that threshold, a club is not compliant — but it is not docked points either. It pays a levy, scaled to the size of the overspend.

Cross the Red Threshold and sporting sanction begins: a fixed six-point deduction, rising by one point for every £6.5 million spent above it.

That last clause is the real reform. Under PSR, the size of a deduction was a judgment call by a commission. Under SCR it is arithmetic a club’s finance director can run in advance. You can now know, in August, what August’s decisions will cost you in May.

The allowance also moves. Breach the 85% threshold and your allowance shrinks by the same percentage in later seasons — the Feedback Loop. Stay compliant and it rebuilds at 10% a year. A club that overspends does not simply pay once; it narrows its own room for the next several seasons.

The other half: SSR

Alongside SCR sits Sustainability and Systemic Resilience, three tests aimed at whether a club can actually pay its bills:

• a working capital test — at least £12.5m in projected monthly cash balances plus qualifying working capital
• a liquidity test — positive headroom after absorbing an £85m stress scenario over two seasons
• a positive equity test — liabilities divided by adjusted assets no greater than 90% in 2026/27, 85% in 2027/28, and 80% from 2028/29

SSR failure does not cost points. It triggers a remedial business plan, and can escalate to enhanced monitoring, board approval requirements for new contracts, or spending limits.

This is the part that PSR genuinely lacked. A club can be profitable and still be unable to make payroll in February; a loss test never sees that coming.

What the clubs voted down

The same meeting rejected anchoring — a proposal to tie every club’s maximum spend to a multiple of the lowest club’s central distribution. That would have been a hard ceiling on the biggest clubs regardless of what they earned.

It failed. The Professional Footballers’ Association opposed any mechanism that caps wages, and the larger clubs argued they could not compete for the best players in the world against continental rivals who face no such ceiling.

The SCR vote itself passed with exactly 14 of 20 clubs in favour — the precise minimum for a rule change. One club switching sides and the Premier League would still be running PSR.

Who voted against is the interesting part: Bournemouth, Brighton, Crystal Palace, Fulham, Leeds United and Brentford. Not the giants. The clubs that objected were the ones with the smallest revenues, and the reason is arithmetic — 85% of a small income is a small number. A ratio cap constrains a low-revenue club far more tightly in absolute terms than it constrains a rich one, even though the percentage is identical. The rule the smaller clubs resisted is the one most often described as protecting them — a pattern examined in do football’s financial rules entrench the clubs on top?

Why 85% and not UEFA’s 70%

The gap looks like the Premier League going soft. It is better read as a division of labour.

Any English club in European competition is bound by UEFA’s 70% squad cost rule anyway — and on 30 June 2026 UEFA fined four Premier League clubs for breaching it. The clubs at the top of the English game are already governed by the stricter number.

An 85% domestic limit therefore does most of its work further down the table, on clubs with no European exposure, where the risk is not competitive distortion but insolvency. The two percentages are not competing answers to one question. They are aimed at different clubs.

Three regimes, compared honestly

	Instrument	Limit	Enforcement
LaLiga	Absolute euro limit, club by club	Individual	Before registration — the player cannot play
UEFA	Squad cost ratio	70%	After the year — fines, registration bans
Premier League	Squad cost ratio	85%, red line 115%	After the year — levies, then points

The Premier League has moved much closer to the European model, and away from the thing that made English enforcement distinctive: a sanction that changed results.

What it has not adopted is LaLiga’s timing. Spain refuses the registration before the season starts. England and UEFA both let the club sign the player, play the season, and settle up afterwards. A fine is a price. A refused registration is a wall.

Whether the new system works will be visible in something specific: whether any club decides that a levy is simply a cost of doing business. That is the loophole an 85% threshold with a 30-point cushion leaves open, and 2026/27 is the first year anyone can test it.