New financial fair play rules based on UEFA guidelines will apply in the Premier League from the new season onwards. However, an even stricter proposal was rejected.
The Premier League’s famous “Profit and Sustainability Rules” will soon be history. On Friday, the majority of Premier League clubs voted to replace the existing profit and sustainability rules with a new set of financial fair play rules that limit investment in the squad to 85 percent of football-related revenue.
Until the end of the current season, clubs are still not allowed to accumulate more than £105 million (approx. €119 million) in losses over a three-year period, although the total is only £39 million (approx. €44 million) if a club has not spent one of the previous three seasons in the Premier League.
The new rule, called Squad Cost Ratio (SCR), focuses on club spending that directly affects what happens on the pitch and is based on UEFA guidelines. Unlike the Premier League, however, UEFA stipulates a ratio of 70 percent for European Cup participants for a calendar year rather than a season, which is even stricter.
Investments in infrastructure are no longer limited
This also explains why the top clubs did not oppose the reform. According to consistent reports in the English media, the six clubs that voted against it were Bournemouth, Brighton, Brentford, Crystal Palace, Fulham, and Leeds. According to calculations by The Athletic, Bournemouth (104 percent) and Fulham (91 percent), among others, would significantly breach the new rule as things stand.
According to the Premier League, the costs affected, which are limited to 85 percent of revenue, primarily include salaries for players and coaches, consultant fees, and transfer expenses. Investments in infrastructure, such as stadiums, will no longer be limited in the future. Conversely, it will no longer be possible to avoid sanctions through revenue not directly related to soccer. Chelsea recently caused a stir with the sale of hotels and its entire women’s team.
Only seven clubs voted in favor of the stricter version.
The Premier League explains the reform by saying that it wanted to “give all clubs the opportunity to strive for greater success while protecting the competitive balance and attractiveness of the league.” Violations will result in a two-stage penalty: anyone who exceeds the 85 percent limit by a maximum of 30 percentage points will receive a fine. Anything above that will result in sporting sanctions such as point deductions.
Another proposal to tighten the financial fair play rules was rejected at the league meeting: Under the so-called top-to-bottom anchoring, clubs’ spending would have been limited to a cap linked to the turnover of the Premier League’s bottom club. Instead of the necessary 14 yes votes, there were seven, with twelve clubs voting against and one abstention.
