Change! New Premier League rules released!

Recently, the Premier League has undergone major changes. The club voted to adopt new financial rules, deciding to implement the "Squad Cost Ratio" (SCR) and "Sustainability and System Resilience" (SSR) regulations from the 2026/27 season, and the PSR system will be replaced.

The Premier League officially stated that the newly introduced SCR and SSR rules are designed to "provide all clubs with more opportunities for success while protecting the competitive balance and attractiveness of the league." Today, Xiao Ou introduces the two new rules of the Premier League to the students.

What is SCR? Let’s take a look at the official explanation first – SCR will limit Premier League clubs’ stadium expenses to “85% of net profit/loss from football-related income and player sales”.

The official statement is definitely difficult to understand. Xiao Ou will translate it for everyone: the club’s expenditure on transfer fees, wages and agent fees shall not exceed 85% of its total revenue.

This rule is similar to UEFA's existing rules, but UEFA's regulations are more stringent, setting an upper limit of 70%. Chelsea and Villa were fined €11 million and €6 million respectively last season for violating UEFA's 70% squad cost ratio.

In addition, the Premier League also leaves clubs with "extra room for overspending." According to the regulations, clubs can increase the maximum expenditure ratio to 115% in one season, but doing so will reduce the maximum expenditure ratio for the next season and will also incur penalties.

The specific rules are as follows. If the club’s lineup cost is less than or equal to 85% of revenue, this is fully compliant and the maximum expenditure ratio will remain at 115%. But if it exceeds 85%, the maximum expenditure ratio for next season will be reduced by the amount of the overspending ratio.

For example, if a club's lineup cost accounts for 90% of revenue and exceeds 5%, its maximum expenditure ratio will be reduced from the normal 115% to 110% next season.

As for fines, the calculation is like this, the club's overspending amount will be multiplied by the proportion exceeding 85%. For example, if a club's squad costs account for 90% of revenue, which is 5% more than the allowed 85%, and the overrun is £10 million, the surcharge will be 5% of £10 million, or £500,000.

If the club's lineup cost ratio exceeds the extreme value of 115%, in addition to fines, it will also face sports penalties-at least 6 points will be deducted initially, and 1 point will be deducted for every more than 6.5 million pounds.

One thing to note is that the previous PSR allowed clubs to make up for losses through the sale of non-football assets. Under the new rules, asset sales can no longer help clubs avoid financial violations.

For example, Chelsea sold two hotels to sister companies last year. This transaction was approved under the existing rules, but will no longer be allowed under the new rules.

Which teams will this new rule have a greater impact on?

According to existing data, the lineup cost ratio of clubs such as Villa, Norwich, Fulham, and Bournemouth has exceeded 85%, so they face greater risks in the future. But with rising revenues and player transfers, the situation may improve.

Another newly introduced SSR rule involves three tests, the working capital test, the liquidity test and the positive equity test, which are used to assess the short-term, medium-term and long-term financial health of the club. Its core purpose is to prevent clubs from going under if they suffer sudden losses in revenue and to ensure they are not saddled with unreasonably high debt levels.

Finally, how do you evaluate the Premier League’s new financial regulations?