Premier League set for major PSR overhaul as clubs block controversial salary cap

Premier League clubs have voted AGAINST introducing a salary cap despite a major overhaul of the league's spending rules. The new proposals would have seen the division's previous financial rules binned in favour of a new approach.

All 20 Premier League clubs came together to vote on Friday and it has been decided that anchoring - effectively a salary cap - will not be part of the new system. 12 clubs voted against the proposal, while seven voted for - one club abstained.

However, some major changes have been introduced following the vote. A squad-to-cost ratio will be brought into force. This new guideline will effectively replace the profitability and sustainability rules (PSR). That was voted 14-6, with both Manchester United and Manchester City flipping their stance, which saw the proposal approved.

Under the new approach, clubs are now limited to spending no more then 85 percent of their annual revenue on “football costs”, and that is understood to account for transfer fees and the cost of coaching staff.

That system is very similar to one already in use in UEFA competitions, where 70 percent of revenue can be spent on player expenses.

Another proposal pushed through by clubs were Sustainability and Systemic Resilience rules (SSR) which would see clubs put through a series of tests to ensure financial health. All 20 clubs voted in favour of that rule.

Anchoring in the meantime would have seen a limit put on clubs and how much they can spend on wages and amortisation of transfer fees. That limit would have been based on the amount distributed to the poorest club in the division, that amount then being have been multiplied by five to decide how much each club can spend - effectively putting clubs on an equal footing when it comes to transfer spending power.

But clubs in the Premier League have elected not to push through that proposal. The previous approach with PSR allowed clubs to make losses of up to £105million over a three-year period.

Nottingham Forest and Everton were previously charged and had points deducted under the old system. Both Man City and Leicester City currently have ongoing legal battles following respective charges. The previous rules will remain in place for the remainder of the current campaign.

A statement from the Premier League on Friday read: "At a Premier League Shareholders’ meeting today, clubs voted to introduce a new set of financial rules which will come into effect from the start of the 2026/27 season.

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"Following extensive consultation, clubs agreed to bring in Squad Cost Ratio (SCR) and Sustainability and Systematic Resilience (SSR) proposals. There was insufficient support for a proposal on Top to Bottom Anchoring.

"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."

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