Premier League clubs voted on Friday to introduce a new squad cost ratio system, limiting spending to 85% of football revenue, while rejecting controversial anchoring plans. The move closes loopholes previously used by clubs like Chelsea and Everton to sell assets such as hotels and women's teams. The rules will replace existing profitability and sustainability regulations from next season.
At a meeting on November 21, 2025, 14 of the Premier League's 20 clubs approved the squad cost ratio (SCR) system to replace the current profitability and sustainability rules (PSR). Under SCR, clubs must limit spending on squad costs—including transfer fees and player wages—to 85% of their football-related revenue and net profit or loss from player sales. Sales of capital assets, such as hotels or women's teams, will no longer count toward this allowance, closing a loophole exploited in recent years.
For instance, Chelsea sold two Stamford Bridge hotels to a sister company last year and their women's team to parent company Blueco for nearly £200 million, both moves boosting their PSR calculations. Everton followed suit in July 2025 by selling their women's team to Roundhouse Capital Holdings, controlled by owner Dan Friedkin's group. Aston Villa also sold their women's team to their parent company for £55 million earlier this year. These transactions were approved under existing rules but will be prohibited under SCR.
Clubs voted overwhelmingly against top-to-bottom anchoring (TBA), with 12 votes against, seven in favor, and one abstention. TBA would have capped squad spending at five times the central revenue of the league's bottom-placed side, drawing opposition from Manchester United, Manchester City, and Aston Villa. The Professional Footballers' Association threatened legal action against the measure, viewing it as a de facto salary cap.
A third proposal, sustainability and systematic resilience (SSR), was approved unanimously. SSR will monitor clubs' financial health through working capital, liquidity, and positive equity tests to address short-, medium-, and long-term risks. Breaches of SCR could result in fines for exceeding the 85% 'green threshold' or points deductions for surpassing the 115% 'red threshold,' with fines redistributed to compliant clubs.
The six clubs opposing SCR are Bournemouth, Brighton, Brentford, Crystal Palace, Fulham, and Leeds. The Premier League stated the new system was developed through consultations and aligns with UEFA's rules, promoting financial sustainability ahead of independent regulation.
