Premier League announce major PSR changes as Newcastle United, Everton & Aston Villa impacted

Premier League clubs have agreed to trial an alternative financial system from the 2024-25 season on a non-binding basis. 

Current Profitability and Sustainability Rules (PSR) - which limits clubs’ losses to £105million over a three-year period - will remain in place with Squad Cost Rules (SCR) and Top to Bottom Anchoring Rules (TBA) in shadow. 

SCR will regulate spending to a 85% of a club’s football revenue and net profit/loss on player sales. Meanwhile, TBA is a league-level anchor that restricts clubs’ spending on transfers, wages and agents’ fees to a multiple of what division’s bottom club earned in television revenue.

“It is designed to be a pre-emptive measure to protect the competitive balance of the Premier League,” the league said. “This protection is intended not to have an impact unless significant revenue divergence of clubs occurs.”

The trial will enable the Premier League and clubs to fully evaluate the system, including the operation of UEFA’s equivalent new financial regulations. Qualifying for the Champions League Europa League or Europa Conference League means complying with UEFA’s Financial Fair Play rules, which limits clubs to spending 70% of their total revenue on wages, transfer and agents’ fees.

The Premier League adds: “The overall system aims to improve and preserve clubs’ financial sustainability and the competitive balance of the Premier League, promote aspiration of clubs, facilitate a workable alignment with other relevant competitions and support clubs’ competitiveness in UEFA club competitions, while providing certainty and clarity for clubs, fans and stakeholders.”

The anchoring system first came to light in April. Asked how it would impact Newcastle, football finance expert Kieran Maguire said: “What it is effectively saying is for every £1 that the side finishing bottom of the Premier League earns from the Premier League TV deal, all of the clubs in the Premier League can spend £5 on wages, transfer fees, amortisation and agent fees.

“That is quite good because that means Newcastle, in theory, can spend the same amount as Manchester City and Manchester United etc. If we just had anchoring, I think it’d be fantastic news for Newcastle because it would allow that gap... we know it is a closed shop between the existing elite and what you might call the ambitious or aspirational clubs like Newcastle and Aston Villa.

“I think that would have been quite exciting but the downside is these rules are operating with UEFA’s squad cost control which is your money coming in and you can only spend 70% of that on wages and agent fees.”