Premier League Clubs have agreed to try a new financial regulatory statute as the Profit and Sustainability Rules (PSR).
In a report shared by the BBC, the Premier League Clubs voted en masse to try two new rules – Squad Cost Rules (SCR) and Bottom Anchoring Rules (BAR).
What are Squad Cost Rules and Bottom Anchoring Rules?
The Squad Cost Rules stipulate that Football Clubs will only be allowed to spend a maximum of 85% of their generated revenues on the squad. This means clubs cannot exhaust the entirety of their revenues on players’ salaries, bonuses, and other pecks.
While limiting the spending cap for Football Clubs, Squad Cost Rules also aim to reduce the likelihood of clubs incurring unnecessary debts.
The Bottom Anchoring Rules (TBA), on the other hand, is designed as a ‘pre-emptive measure to protect the competitive balance of the Premier League.’
Unlike SCR, TBA will limit what bigger clubs could spend in relationship to what smaller clubs in the league can base on their revenue.
Further details reveal the TBA, is designed not for instant impact except when there is a widening gap between revenues of bigger and smaller clubs.
For context purposes, the two rules are set to be trialled first next season alongside PSR before full implementation in the 2025-26 season.
After the two new rules are successfully trialled, they will be used in place of PSR going forward. PSR limited the losses clubs can incur over three seasons to £105m but will now be replaced with the focus now on revenue-to-spending ratios per season.
Do you think SCR is better than PSR?
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