After several years marked by controversy surrounding PSR, the sanctions handed to Everton and Nottingham Forest, and endless debates over financial fair play, the Premier League has decided to change direction. Starting with the 2026-27 season, the English top flight will gradually move away from the Profitability and Sustainability Rules (PSR) and introduce a new model: the Squad Cost Ratio, more commonly known as SCR.
Presented as a simpler, more transparent system that aligns more closely with UEFA regulations, the SCR officially aims to better control club spending. But behind that promise of financial stability, many already fear another consequence: an English soccer landscape even more locked in favor of the richest clubs.
Why the Premier League want to move away from PSR
PSR operated under a different logic. Until now, clubs were allowed to lose up to £105 million over a three-year period.
The problem is that the system had become incredibly complicated:
- accounting amortization,
- financial loopholes,
- asset sales,
- and manipulation of commercial revenues.
Some clubs even found ways around the rules by selling club-related assets — hotels, side businesses, or women’s teams — to companies linked to their own ownership groups in order to artificially improve their financial statements.
The SCR is designed to eliminate those workarounds by focusing directly on soccer-related spending.
Another advantage for the Premier League is harmonization with UEFA regulations. Right now, English clubs playing in Europe have to navigate two different financial systems simultaneously.
On paper, the SCR therefore appears clearer, more modern, and more predictable.
But in practice, its consequences could be far more controversial.
SCR : the new financial revolution
The principle behind the Squad Cost Ratio is relatively simple: clubs will no longer be allowed to spend more than a certain percentage of their revenue on their professional squad.
More specifically, expenses linked to:
- player and coaching salaries,
- amortized transfer fees,
- and agent commissions
will be capped at 85% of a club’s soccer-related revenue.
For clubs competing in European competitions, the limit will be even stricter: 70%, in order to align with UEFA’s own financial regulations.
The revenue included in the calculation covers:
- TV rights,
- ticket sales,
- commercial revenue,
- sponsorship deals,
- and income generated by stadium events.
On the other hand, certain expenses will intentionally be excluded from the calculation, including:
- infrastructure investments,
- academy development,
- and women’s soccer.
The league’s stated objective is twofold:
- prevent clubs from consistently living beyond their means;
- make financial rules easier to understand than the old PSR system.
A system can help the rich… even more
The main criticism aimed at the Squad Cost Ratio is straightforward: it directly ties spending power to existing revenue.
And revenue distribution in the Premier League is already extremely unequal.
Giants like Manchester City, Liverpool, and Manchester United already possess massive advantages:
- bigger stadiums,
- global commercial deals,
- enormous marketing income,
- and regular Champions League participation.
Under the SCR, those revenues automatically become permission to spend even more.
Take a simple example:
- a club generating $870 million in revenue could theoretically spend around $740 million on its squad;
- a club generating $163 million could only spend around $139 million.
Even with elite scouting and recruitment, it becomes almost impossible to compete structurally. The ceiling for the biggest clubs becomes infinitely higher than for everyone else.
That is exactly what worries many observers: the SCR could transform today’s financial gaps into permanently institutionalized inequalities.
This is where the most fascinating paradox of the new system appears.
Clubs like Brighton, Brentford, and Bournemouth are often praised as modern success stories because of:
- smart recruitment,
- advanced data scouting,
- player trading,
- and innovative sporting structures.
These clubs compensate for their economic disadvantage through organizational intelligence.
But under the SCR, even if they operate better than the giants, they remain trapped within a structural spending limit. Their growth will depend almost entirely on commercial expansion, which develops far more slowly than the massive financial injections available to elite ownership groups.
In other words, the SCR rewards existing economic power more than pure sporting competence.
A club like Bournemouth can recruit intelligently, discover talent, sell players for profit, and improve competitively. But as long as its revenue remains far below that of the Big Six, its spending ceiling will remain far lower too.
The danger is therefore a more rigid hierarchy:
- the rich keep their advantage,
- well-run clubs continue progressing,
- but without ever truly being able to break through the glass ceiling.
Ironically, Everton and Nottingham Forest were among the clubs most heavily punished under the PSR system in recent years.
Yet their support for the SCR actually makes sense.
First, those clubs believe PSR had become too vague, too legalistic, and too unpredictable. The penalties, appeals, and accounting debates created an atmosphere of constant instability.
The SCR offers a much simpler principle:
“you spend according to what you generate.”
Second, mid-table clubs like Everton and Nottingham Forest still possess significant economic advantages over smaller sides:
- large historic fanbases,
- major stadiums,
- stronger commercial revenues,
- and greater media exposure.
In a system directly tied to revenue, those clubs hope to consolidate their middle-tier status.
The SCR protects established institutions more than ambitious risk-taking from emerging clubs.
Finally, these clubs likely viewed the SCR as a way to avoid the public embarrassment caused by PSR-era point deductions and endless financial investigations.
