The Premier League’s incoming Squad Cost Ratio rules will create a new wave of winners and losers among English football clubs, financial and legal experts have warned.
The conclusion of the Premier League season on Sunday saw champions Arsenal lift their first title in 22 years, marking the simultaneous end of the Profit and Sustainability Rules era.
Under PSR, clubs could absorb significant losses across multiple years before facing punishment, a framework now being replaced by the more real-time Squad Cost Ratio system.
Reed Smith partner Matt Phillips outlined the shift: “From the 2026-27 season, the Premier League is adopting new Squad Cost Ratio (SCR) rules, focused on on-pitch spending and capped at 85 per cent of football-related revenue, aligned with Uefa’s latest financial framework.”
Phillips added that SCR spending limits apply on a season-by-season basis, with compliance monitored throughout the campaign rather than assessed retrospectively at the end of each cycle.
“PSR measured an accounting figure rather than assessed actual financial health, invited creative compliance rather than prudent financial management, and left fans concerned, rightly or wrongly, that it preserved the in-built advantage enjoyed by the biggest clubs,” Phillips said.
Football finance expert Kieran Maguire confirmed that the vote to adopt SCR was not unanimous, with 14 clubs in favour and six opposed to the new regulations.
Clubs including Brentford, Brighton, Bournemouth and Crystal Palace voted against the reforms, largely due to concerns about how player sale profits would be treated under the new framework.
“They were opposed to it because it reduces the impact of player sales. Instead of being able to put all of your player sale profits into your PSR calculations, under SCR those profits are spread over three years,” Maguire explained.
Maguire noted that clubs relying heavily on transfer market activity as an income stream face a relative disadvantage compared to those with larger commercial operations under the new rules.
“The sides that will benefit are those who have very significant commercial arms. The other winners will be clubs that have just been promoted to the Premier League,” Maguire said.
The current season has illustrated the growing financial depth across English football, with Sunderland, Bournemouth and Brighton all reaching European qualification thresholds.
Aston Villa’s victory in the Europa League final added further weight to that picture, with Arsenal in the Champions League final and Crystal Palace in the Conference League final keeping an English clean sweep of European trophies alive.
Legal experts at Michelman Robinson offered a measured assessment of the new framework, acknowledging that its ultimate impact remains to be seen over the coming seasons.
Akshay Sewlikar and Patrick Lloyd of the firm stated: “Only time will tell if this new regime will succeed in improving top clubs’ financial health, but the fact that the SCR and IFR rules have the same aim should create a more consistent framework for better financial management.”
The pair concluded: “Implementing a clear expenditure limit linked to football-related revenue and player sales aligns the Premier League with the Uefa rules. It’s a step in the right direction.”