The Premier League changed its financial rules for 2026/27. The Profitability and Sustainability Rules, which produced the Everton, Nottingham Forest and Leicester points deductions, have been replaced by two new sets of rules, and a third set governs deals between clubs and their owners' other businesses. Here is what each one does, with the numbers, from the Premier League's own explanations.
The map
| Rules | In force | What they measure | Sanction for a serious breach |
|---|---|---|---|
| Profitability and Sustainability Rules (PSR) | 2013/14 to 2025/26 | Adjusted losses over a rolling three-season period against a £105 million allowance | Decided case by case by a Commission: points deductions of 10 (reduced to 6), 2, 4 and 6 have been imposed |
| Squad Cost Ratio (SCR) | From 2026/27 | A season's squad spending as a percentage of football-related revenue plus net player-sale profit | Levy between the green and red thresholds; a fixed six-point deduction plus one per £6.5 million above the red threshold |
| Sustainability and Systemic Resilience (SSR) | From 2026/27 | Working capital, liquidity under stress, and the ratio of liabilities to assets | Business-plan requirements and possible controls on spending or registrations |
| Associated Party Transactions (APT) | From December 2021, amended November 2024 | Whether deals with companies linked to a club's owners are at fair market value | Adjustment of the reported value of the deal |
PSR: the rules that produced the recent deductions
Under the PSR a club's adjusted losses over three seasons could not exceed £105 million, with permitted deductions for spending on infrastructure, youth development, the women's team and community work. Everton were deducted 10 points in November 2023 for a loss of £124.5 million against the £105 million limit over the period ending 2021/22, later reduced to 6 on appeal, and 2 more points in April 2024 (Premier League statement on Everton, 17 November 2023; Premier League and Everton joint statement, 17 January 2025). Nottingham Forest were deducted 4 points in March 2024. Leicester City were deducted 6 points in February 2026 for a breach of £20.8 million over the assessment period 2022 to 2024, applied in the Championship (Premier League statement on Leicester City, 5 February 2026). The Premier League's explainer states that "PSRs no longer apply from the start of season 2026/27 onwards", while the League keeps its powers to continue enforcement of earlier seasons (Premier League explainer on the new financial system, 21 July 2026).
SCR: the Squad Cost Ratio
The Premier League describes the SCR as a rule "that limits Premier League clubs' on-pitch spending to 85% of their football-related revenue and net profit/loss from player sales". Squad cost broadly means player and head-coach wages, transfer amortisation and agents' fees. Each club has a green threshold at 85% and a red threshold, "an absolute spending limit up to 30% above the Green Threshold". Compliance is assessed once a year in March, after the winter transfer window, with monitoring in October (Premier League explainer on the new financial system, 21 July 2026).
Above the green threshold but below the red one, a club pays a financial levy; the explainer says levies will only be payable for breaches from 2027/28 onwards. Above the red threshold the sanction is set by formula: "a fixed six-point deduction, which increases by one point for every £6.5m spent over the Red Threshold." Clubs in European competition must also meet UEFA's own squad cost limit, which the explainer puts at 70% of total revenue.
The rules were approved by clubs on 21 November 2025. Sky Sports reported that 14 clubs, the minimum needed, voted in favour, and that a separate proposal called anchoring, which would have capped squad spending at a multiple of the bottom club's central payments, was rejected by 12 votes to 7 with one abstention (Sky Sports on the November 2025 vote; Premier League statement on the new financial rules, 21 November 2025).
SSR: the three financial tests
Alongside the SCR, the Sustainability and Systemic Resilience rules apply three tests, all from the Premier League's explainer (Premier League explainer on the new financial system, 21 July 2026). The working-capital test requires that a club's projected monthly cash figure plus qualifying working-capital funds, such as undrawn credit facilities, is at least £12.5 million. The liquidity test requires that a club's liquidity headroom is zero or positive after absorbing a stress test of £85 million. The positive-equity test requires that the ratio of liabilities to adjusted assets is no more than 90% in 2026/27, 85% in 2027/28 and 80% from 2028/29 onwards. A club that fails a test can be required to submit a business plan and can face controls on spending or player registrations.
APT: deals with owner-linked companies
The Associated Party Transaction rules, introduced in December 2021, require deals between a club and companies linked to its owners, such as sponsorships, to be at fair market value. Manchester City challenged the rules in an arbitration that began in January 2024. On 14 February 2025 the Premier League said the tribunal had ruled on the 2021 to 2024 version of the rules while "Clubs voted new APT rules into force in November 2024" (Premier League statement on the APT tribunal, 14 February 2025). On 9 September 2025 the two sides settled, with the joint statement recording that "Manchester City accepts that the current APT Rules are valid and binding" (Sky Sports on the APT settlement, 9 September 2025). The APT dispute is separate from the charges case.
How the Manchester City case fits
The charges that the Commission found proven on 29 September 2026 concern seasons from 2009/10 to 2017/18, and cooperation from 2018/19 to 2022/23, under the rules of the time. Charge 3 was a PSR charge for 2015/16 to 2017/18; Charge 2 concerned the obligation to comply with UEFA's rules. The SCR and SSR did not exist for any of those seasons. What has and has not been decided is on the case page.
Glossary
- PSR
- Profitability and Sustainability Rules. A three-season loss limit of £105 million, in force 2013/14 to 2025/26.
- SCR
- Squad Cost Ratio. On-pitch spending as a share of football revenue plus net player-sale profit, limited to 85% with a red threshold up to 30% higher.
- SSR
- Sustainability and Systemic Resilience. Three tests of working capital, liquidity and equity.
- APT
- Associated Party Transaction. A deal between a club and a company linked to its owners, which must be at fair market value.
- Green and red thresholds
- The 85% level above which an SCR levy applies, and the higher level above which a points deduction applies.
- Anchoring
- A rejected proposal to cap every club's squad spending at a multiple of the bottom club's central payments.
Common questions
What were the Premier League's PSR rules?
The Profitability and Sustainability Rules limited a club's adjusted losses to £105 million over a rolling three-season period, with certain spending, such as on infrastructure, the academy and the women's team, excluded from the calculation. They applied from 2013/14 to 2025/26 and were the rules under which Everton, Nottingham Forest and Leicester City were sanctioned.
What is the Squad Cost Ratio?
The Squad Cost Ratio, in force from 2026/27, limits a club's on-pitch spending to 85% of its football-related revenue and net profit or loss from player sales. Clubs between 85% and their red threshold, which can be up to 30% above the green threshold, pay a levy; clubs above the red threshold receive a fixed six-point deduction, which increases by one point for every £6.5 million spent over the red threshold.
What is the difference between PSR and SCR?
PSR measured losses over three seasons against a fixed £105 million allowance. SCR measures a single season's squad spending as a percentage of that season's income, so a club that earns more can spend more, and the sanction for a serious breach is set by a formula rather than decided case by case.
Do the new rules include a points deduction?
Yes. Spending above the red threshold brings a fixed six-point deduction plus one point for every £6.5 million over, according to the Premier League's explainer. Spending between the green and red thresholds brings a financial levy instead, payable for breaches from 2027/28 onwards.
What are the SSR rules?
The Sustainability and Systemic Resilience rules are three financial tests: a working-capital test, that a club's projected monthly cash plus qualifying funds is at least £12.5 million; a liquidity test, that it could absorb an £85 million stress test over two years; and a positive-equity test, that liabilities are no more than 90% of adjusted assets in 2026/27, 85% in 2027/28 and 80% from 2028/29.
Are the Manchester City charges about the new rules?
No. The charges concern seasons from 2009/10 to 2017/18, and cooperation with the investigation from 2018/19 to 2022/23, under the rules in force at the time, including PSR and the obligation to comply with UEFA's rules. The SCR and SSR did not exist then.
Which clubs are close to the limit?
The Premier League does not publish club-by-club ratios. The only figures in circulation are third-party estimates, so this page does not rank clubs against the thresholds.