Premier League closes loophole as clubs back tighter spending rules
Outside Stamford Bridge, the red brick stands quiet. But behind the scenes, the money game has just changed.
From next season, Premier League clubs will no longer be allowed to sell assets to themselves to stay within financial rules. Hotels, women’s teams and other valuable holdings can no longer be shifted to sister companies to tidy up the books.
The move follows a narrow vote in London, where clubs agreed to replace the current Profit and Sustainability Rules with a new system based on squad spending. It passed with the slimmest margin possible.
The new model, known as the Squad Cost Ratio, sets a cap on what clubs can spend on their squads each season. From the 2026–27 campaign, total team costs must not exceed 85 per cent of a club’s football revenue. Clubs playing in Europe will face a stricter ceiling of 70 per cent, in line with Uefa rules.
Squad costs cover player and manager wages, transfer fees and payments to agents.
At the heart of the change is the end of a well-used workaround. Last year, Chelsea sold two hotels near Stamford Bridge to a sister company for £76.5m to stay compliant. Everton moved its women’s team to its parent company. Reports suggested Aston Villa had plans to follow the same path.
That door is now firmly shut.
In a statement, the Premier League said the new rules were designed to bring fairness and stability. “The new SCR rules are intended to promote opportunity for all clubs to aspire to greater success and bring the league’s financial system close to Uefa’s existing SCR rules,” it said.
Officials added that the system would include in-season monitoring, clearer penalties and protection against sudden financial collapse.
How the new system will work
Unlike the old model, which judged a club’s finances over three years, the new rules focus on squad spending each season. The aim is simple: link football wages and fees directly to football income.
There is, however, some breathing space. Clubs will be allowed a rolling buffer of up to 30 per cent, giving them room to spend ahead of income or manage dips in form.
Spending above 85 per cent will lead to fines. Going beyond the upper limit, known as the red line, will trigger a fixed six-point deduction. That penalty rises with further overspend.
For now, every club effectively starts with a ceiling of 115 per cent. But that figure will fall in future seasons as the system tightens.
Winners, losers and quiet concern
Not all clubs welcomed the change.
Sides with smaller stadiums and limited commercial reach fear being squeezed. Bournemouth, Brentford, Brighton, Crystal Palace, Fulham and Leeds voted against the new rules. For them, the link between wages and income could limit their ability to compete.
Bournemouth’s ground holds just over 11,000 fans, yet they must still pay Premier League-level salaries. Fulham face a similar challenge.
By contrast, the biggest clubs, with strong global brands and booming sponsorship deals, are unlikely to feel the pinch. Their income streams give them more freedom within the new limits.
Aston Villa and Newcastle, both frustrated by past spending restrictions, see some relief. Yet their involvement in European competitions means they must still comply with Uefa’s tighter cap.
Anchoring rule fails to pass
Clubs also rejected a proposal known as “anchoring”. This would have linked maximum spending to the income of the league’s lowest-earning side. The idea was to stop the richest teams pulling too far ahead.
Only seven clubs backed it.
Manchester City and Manchester United feared their future growth could breach such a limit. Arsenal and Liverpool, however, supported the proposal.
Some club owners also worried it could harm their ability to compete with European giants like Real Madrid.
The Professional Footballers’ Association raised a separate concern. It warned that tighter controls could effectively cap player wages, opening the door to legal challenges.
Sustainability plans pass with ease
While other proposals split the room, sustainability rules sailed through without opposition.
Clubs will now be required to submit clear financial plans covering the short, medium and long term. These will be reviewed by the incoming Independent Football Regulator, due to begin work later this season.
If a club drifts off course, corrective steps will follow. These could include spending limits or debt restructuring measures.
The message from the league is firm but steady. Spend wisely. Plan clearly. Stay within your means.
As one senior figure close to the process put it, “This is about stopping clever accounting and keeping the competition fair.”
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