Premier League Rejects Salary Cap and Introduces New Spending Control System

The Premier League has taken a major step in reshaping its financial policy by rejecting a strict salary cap and instead approving a new spending-control framework. Clubs voted against the proposal known as TBA, which would have tied wage limits to the earnings of the lowest-revenue club in the league. Instead, they backed a flexible model based on each club’s real income.

At the center of this reform is the Squad Cost Ratio (SCR), which sets how much each club can spend on its team. Starting from the 2026–27 season, spending on player wages, transfer amortization, and coaching staff will not be allowed to exceed 85% of a club’s football-related revenue plus net profit from player sales. With this approach, the league hopes to limit excess spending without preventing big clubs from investing heavily.

The SCR replaces the current Profitability and Sustainability Rules (PSR), which have been heavily criticized following high-profile penalties. The old system focused on total accumulated losses and allowed for creative accounting maneuvers that were confusing for fans. The new model focuses on what matters most to the sport — how much is actually invested into the team itself.

The framework also includes an additional 30% flexibility buffer that clubs can use over multiple seasons to exceed the 85% threshold. However, this comes with financial penalties and, if abused, could even lead to sporting sanctions. The message is clear: you can take risks, but not without consequences.

In parallel with the SCR, shareholders approved the Sustainability and Systemic Resilience (SSR) measures. These require clubs to pass three regular financial health checks: working capital, liquidity, and positive net equity. The goal is to detect structural problems or cashflow issues before they become crises.

The new rules also close loopholes from the previous era. Income from selling assets outside football — such as buildings or related businesses — will no longer count toward spending allowances for transfers and salaries. Only revenue directly generated by football operations will be recognized.

The model moves closer to UEFA’s system, which caps roster spending at 70% of revenue for European competitors. The Premier League allows up to 85%, but follows the same principle of a standardized ratio. Wealthier clubs will still benefit from higher incomes, but with far less freedom than before to push costs upward unchecked.

The transition will be gradual: PSR will remain in place through the 2025–26 season while monitoring tools are adjusted and oversight is refined. Starting in 2026–27, the main debate will no longer be about imposing an absolute salary cap — but about how the SCR and SSR operate in real conditions.

Ultimately, the Premier League is attempting to strike a balance — protecting competitive integrity while maintaining its status as the most financially powerful league in world football.