Premier League clubs have voted against the introduction of a salary cap in top-flight football, but a serious overhaul of Profit and Sustainability Rules (PSR) is still being lined up. The proposals put to teams at the highest level of the English game would have seen previous financial regulations ripped up, but not every suggestion has received universal approval.
Premier League vote on introduction of a salary cap
All 20 Premier League clubs convened in a vote that took place on November 21. Part of that polling saw plans for a salary cap vetoed. It is reported that 12 teams voted against the plans, while seven were in favour and one abstained.
At a shareholders’ meeting, a range of topics were discussed – including top to bottom anchoring, squad cost ratio (SCR) and the Sustainability and system resilience (SSR). A vote on SCR was passed, while SCR proposals were pushed through unanimously. Of the 20 sides holding a vote, 14 must give a green light in order for
Premier League rules to be changed.
AdvertisementGettyThe 2025-26 campaign will be the last with PSR regulations
It has been determined that SCR will replace the current PSR system, which limits losses to a maximum of £105 million ($137m) over a three-year period. With a fresh approach being agreed, the 2025-26 campaign will be the last under the PSR regulations.
SCR dictates that teams can only spend 85 per cent of their total income on wages and transfer fees for players, coaches and agents. The plan has already been adopted by UEFA, meaning that English teams competing in Europe can only spend 70 per cent of their income on wages and transfers. UEFA’s SCR scheme follows the calendar year, but the Premier League’s version will mirror the domestic football season.
What is squad cost ratio (SCR) & why is it being introduced?
A statement from the league read: "SCR will regulate clubs’ on-pitch spending to 85 per cent of their football revenue and net profit/loss on player sales. Clubs will have a multi-year allowance of 30% that they can use to spend in excess of the 85 per cent. Utilising this allowance will incur a levy and once the allowance is exhausted, they will need to comply with 85% or face a sporting sanction.
"The new SCR rules are intended to promote opportunity for all clubs to aspire to greater success and brings the League’s financial system close to UEFA’s existing SCR rules which operate at a threshold of 70 per cent. The other key features of the League’s new system include transparent in-season monitoring and sanctions, protection against sporting underperformance, an ability to spend ahead of revenues, strengthened ability to invest off the pitch, and a reduction in complexity by focusing on football costs.
"The Sustainability and Systemic Resilience rules assess a club’s short, medium and long-term financial health through three tests – Working Capital Test, Liquidity Test and Positive Equity Test.
"Since 2023, the Premier League and our clubs have worked collaboratively to develop the financial controls with the objective of maintaining the League’s value, protecting competitive balance and ensuring clubs operate in a financially sustainable way.
"The process has included extensive consultation at Shareholder level at clubs, as well as senior finance and legal executives, and club working groups. In addition, independent economic and legal analysis was sought.
"As part of the development of the proposed rules, clubs agreed at the Premier League Annual General Meeting in June 2024 to trial SCR and TBA on a non-binding basis. The shadow monitoring of SCR and TBA rules has also continued this season.
"This enabled the League and clubs to fully evaluate the system, including the operation of UEFA’s equivalent SCR regulations, and to complete the consultation with all relevant stakeholders including the PFA and football agents."
GettyExplained: SSR & top to bottom anchoring
SSR consists of three prongs. One of those seeks to ensure that teams have sufficient resources to manage outgoings and any revenue fluctuations. The others focus on long-term financial plans and the health of a club’s balance sheet.
Top to bottom anchoring (TBA) would have effectively seen a salary cap put in place. That is because those proposals limit spending on wages and transfers to five times the amount paid in prize money and broadcast revenue to the team that finishes bottom of the division. The Premier League could, as reported by , have faced legal action from players had anchoring been introduced.