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Premier League Adopts New Spending Rules, Rejects Salary-Cap Proposal

Starting in 2026-27, an 85% squad-cost limit with levies and points penalties replaces profit-based rules.

Overview

  • Clubs approved the Squad Cost Ratio and Sustainability and Systemic Resilience frameworks, with SCR passing 14–6 and the anchoring plan defeated 7–12 with one abstention.
  • SCR caps on-pitch spending at 85% of football revenue plus net profit/loss on player sales, with a 30% multi-year allowance that triggers a levy.
  • In-season enforcement includes October monitoring and a March 1 assessment, with green/red thresholds and a fixed six-point deduction for breaching the red line, rising by one point per £6.5m overspend.
  • Profit and Sustainability Rules stay in place for the rest of 2025-26, and the new model aligns with UEFA’s approach but sets a higher 85% limit versus UEFA’s 70%.
  • SSR adds financial health tests: monthly Working Capital headroom of at least £12.5m, a two-season Liquidity test absorbing an £85m stress, and Positive Equity ratios tightening to 80% from 2028-29, as unions and major agencies had warned they would challenge any hard cap.