Aston Villa were among the Premier League clubs to vote in favour of an overhaul of the financial regulations for English football’s top tier on Friday, but what does it mean going forward?
Villa fans have become all-too familiar with the concerns and struggles of being compliant with PSR over the past two summers in particular but further back that than that too, with top Academy products and key players being sold in recent transfer windows to help balance our books and avoid further sanctions.
On top of the Premier League’s regulations, we have also had to adhere to UEFA’s financial rules having qualified to feature in European competitions for the past three years, and although a plan has been agreed and implemented in conjunction with the European governing body moving forward to ensure we’re within their accepted thresholds, we were fined this past year for failure to be compliant.
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In addition to supporters bemoaning the negative impact that PSR has had on us in terms of limiting and capping our ambition and ability to build a competitive squad to rival those above us, we’ve even heard it from club officials with ex-President of Football Operations Monchi, and current Director of Football Operations, Damian Vidagany, not hiding their frustration and disdain for the current set of regulations.
Fortunately, change is coming. As per The Athletic, Premier League clubs have voted in favour of replacing PSR with Squad Cost Ratio (SCR) rules and Sustainability and System Resilience (SSR) regulations. Here’s what will change and when.
PSR to be replaced – what it means
On Friday, Premier League clubs voted in favour of overhauling the current financial regulations from the start of the 2026/27 season.
Top to bottom anchoring (TBA) failed to receive enough votes in favour of being passed, but Squad Cost Ratio (SCR) passed with 14 votes to six, with Villa reported to have voted in favour of its implementation while Bournemouth, Brentford, Brighton, Crystal Palace, Fulham and Leeds United were the six to vote against, as per the Athletic. Sustainability and System Resilience (SSR) regulations passed unanimously.
What is SCR and how will it work?
SCR will allow Premier League clubs to spend 85 percent of their revenue on squad costs, which covers player wages, amortised transfers, agents’ fee, head coach wages and other similar expenses.
Villa are familiar with this concept already as we have had to comply with UEFA’s 70 percent limit in recent seasons, and so it’s hoped that we’ll be in a healthy position when this is introduced domestically in the 2026/27 campaign as we’re taking action to adhere to the stricter European threshold already having been fined this past year.
Speaking of thresholds, each club will be in the ‘green threshold’ if they comply with the Premier League’s SCR 85 percent limit. Should they exceed that, they will be in the ‘red threshold’, with an absolute spending limit of 115 percent of their respective revenue.
For every percent a club is above the 85 percent limit at the time of being assessed, the top 115 percent limit is lowered the following season. So for example, should Villa record a 90 percent ratio in 2026/27, our ‘red threshold’ would max out at 110 percent for the 2027/28 campaign. There is leeway for a club to work back towards that 115 percent maximum over time if they are later compliant.
While every club will be assessed for compliancy on March 1 every year, they risk a fine for creeping beyond the ‘green threshold’, and then a sporting sanction if they exceed the ‘red threshold’ which is a fixed six-point deduction, and further sanctions depending on how far over they are.
As for the SSR rules, they will be based on three tests. Working Capital Test, Liquidity Test and Positive Equity Test, which will all be assessed on July 7 of each year.
These are aimed at improving a club’s financial sustainability and while there is more leeway to ensure compliancy, there is still the threat of sanctions if clubs don’t take steps to adhere to the regulations. Given all 20 clubs voted in favour of this element of the overhaul, it’s clearly seen as a sensible change by all concerned to act as protection to help build more sustainable models.
Ultimately, it’s hoped that these new regulations help build a more balanced and competitive top tier of English football.
That said, there are still concerns given ultimately much depends on revenue and so the more established clubs will be at an advantage given they bring in significantly more still through commercial opportunities, while those participating in Europe still have to comply with UEFA’s parameters.
In turn, it doesn’t sound like a complete solution to our problems as we’ve bemoaned the impact of PSR on capping our ambition in recent years, but if as reported Villa voted in favour of this change, hopefully we’re well equipped to make the most of it and continue to build on the progress and success we’ve enjoyed under Emery in particular. Recently appointed chiefs Roberto Olabe and Francesco Calvo will undoubtedly still have their respective work cut out in making sure we deliver results on and off the pitch.
