Premier League’s new spending rules deepen debate over competitive balance

December 11, 2025 Oliver Obel

The Premier League has signed off on the most sweeping rewrite of its financial rulebook in more than a decade a decision that has already widened the divide between clubs who believe the reforms will steady the league’s long-term finances and those who fear they may lock in existing hierarchies.

The shake-up was approved last month by a 14–6 vote, according to Reuters and the BBC. While most clubs agreed the old system was no longer fit for purpose, the path forward has been anything but unanimous.

Pressure on the old system

The outgoing Profit and Sustainability Regulations (PSR) capped three-year losses at £105m, a limit that became increasingly strained as transfer fees and wages rose faster than revenues. The Guardian notes that violations by Everton and Nottingham Forest both hit with points deductions underscored how the rules had shifted from stabilising mechanisms to flashpoints.

Some mid-table executives told UK reporters that PSR unintentionally restricted upward mobility more than reckless spending. Newcastle United and Aston Villa, despite wealthy owners, found themselves bumping up against the limits before they could fully execute long-term plans.

How the new framework works

From the 2026/27 season onward, PSR will be replaced by two components: the squad cost ratio (SCR) and the sustainability and systematic resilience (SSR) test.

SCR mirrors elements of UEFA’s controls but allows domestic clubs slightly more room. Under figures outlined in Premier League guidance and summarised by AP, spending on first-team wages, manager salaries, agent fees and amortisation is compared to “adjusted revenue” essentially matchday income, commercial earnings, broadcasting, and profits on player sales.

Clubs are expected to operate around 85% of revenue, though they can push to 115% by paying a levy. Going beyond that ceiling could result in sporting penalties. Meanwhile, teams in UEFA competitions must follow tighter European caps, given their greater earning potential.

SSR approved unanimously introduces liquidity and solvency checks meant to prevent short-notice financial crises. Analysts have pointed out that these safeguards reflect lessons learned from club collapses across English football in the late 2000s.

Early resistance and pressure points

Opposition to SCR came from Bournemouth, Brighton, Brentford, Crystal Palace, Fulham and Leeds United. Financial data reviewed by the Guardian suggests several of those clubs already operate near the upper end of spending efficiency, making them wary of a framework they believe might limit future squad investment rather than level the playing field.

Chelsea and Aston Villa could also feel early pressure. Both were fined by UEFA last year for breaching European spending rules penalties that stemmed partly from the governing body’s refusal to count revenue from hotel or affiliate-team sales toward compliance. That restriction will now apply inside the Premier League as well.

Newcastle United face a different challenge: revenue that remains well below the league’s commercial giants. Even with Champions League income, their spending capacity lags sharply behind Manchester City, Manchester United, Liverpool and Arsenal.

A widening financial gap?

Figures compiled by Swiss Ramble indicate Manchester United currently possess the league’s largest SCR budget, followed by Manchester City and then Liverpool and Arsenal. Newcastle sit in the middle of the pack, with Aston Villa close behind.

Several club officials and financial analysts told UK outlets that this landscape is unlikely to shift quickly. The consensus, for now, is that the reforms may encourage clubs to chase new commercial and matchday revenue streams, but they are unlikely to shrink the financial gulf separating the league’s elite from everyone else.

Whether the new structure promotes stability or simply codifies inequality is a question many inside the league believe won’t be answered for several seasons. Until then, frustration and uncertainty remain part of the Premier League’s financial reality even as the rulebook gets rewritten.

Sources: Reuters, BBC, AP, The Guardian.