English soccer’s top-tier Premier League will retain its existing profitability and sustainability rules (PSR) for next season after discussions with its member clubs at a shareholders’ meeting.
It had been anticipated the clubs would replace the PSR with Squad Cost Ratio (SCR) rules ahead of the next season, but the Premier League clubs agreed to stick with the current rules for one more season.
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PSR restricts club losses to £105 million over three years, while SCR, which follows the financial rules of the European governing body UEFA, limits clubs to spending 85% of their revenue on soccer costs.
Clubs competing in UEFA competitions already have to comply with similar rules to SCR.
SCR also features ‘anchoring’, which restricts how much clubs can spend on player wages and transfers to five times the revenue the bottom Premier League club receives in broadcast and prize money.
The issue was discussed at the regular Premier League Stakeholders meeting yesterday but an official vote was not taken due to a disagreement on when SCR should be introduced, according to news outlet the BBC.
It said the majority of clubs were happy to move to SCR, bar one club which said it preferred PSR.
PSR has previously seen Everton and Nottingham Forest hit with points deductions for breaches, while it has also limited the ability of some clubs to sign players, notably Manchester United and Newcastle United. The new SCR rules would allow clubs more flexibility over transfer spending.
However, with the rules set to stay for another season, several clubs will have to re-think their summer transfer plans.
Last month, Manchester United wrote to fans warning them that ticket prices could rise due to the club being at risk of breaching PSR, while Newcastle manager Eddie Howe previously criticized the rules after having to offload players to comply.
Aston Villa’s co-owner Nassef Sawiris, meanwhile, said last year the club is considering legal action against PSR as it protects the biggest clubs.
Premier League clubs are now expected to await the outcome of Manchester City’s latest legal challenge to the Associated Party Transaction (APT) rules before they can vote on introducing SCR.
APT rules are designed to ensure fair market value is applied to commercial deals with organizations associated with club owners.
However, the future introduction of SCR will have other issues to contend with.
The Professional Football Association has indicated they will take legal action against SCR’s anchoring rules after branding it anti-competitive and essentially a salary cap.
Meanwhile, any new rules will have to co-exist with the UK government’s new soccer governance bill, which will require clubs to show they are acting in a financially sustainable way.
While details of the legislation have not been finalized, the Premier League will have to fall into line with the legislation, as well as the incoming independent regulator.
