The nine English clubs involved in European competition — Arsenal, Aston Villa, Chelsea, Crystal Palace, Liverpool, Manchester City, Newcastle United, Nottingham Forest and Tottenham Hotspur — must each abide by a different set of financial strictures to their remaining 11 domestic peers this season.
Some fans see these rules as a mechanism to protect existing top clubs from challengers. Financial penalties can be treated as a cost of business by wealthy clubs. Only points deductions or exclusion from a competition would really hit them.
UEFA’s football earnings rule limits clubs to €60million (£51.9m at today’s rate) in losses over a three-year period, albeit that limit can be upped by €10m per year (to a maximum total of €90m across a given assessment period) if clubs meet each of four conditions UEFA deem representative of good financial health. They are: positive equity; a quick ratio — current assets, less stock, divided by current liabilities — of one or above; a sustainable debt ratio, relative to income; and the club is a ‘going concern’ (i.e. not imminently going out of business).
English clubs are mostly fine on three of those but it’s condition two, the quick ratio, where they all fall down. Principally due to high transfer debt, current liabilities exceeded current assets at eight of the nine clubs in both 2022-23 and 2023-24. The one exception was Manchester City in 2023-24.
_Arsenal_
_The Athletic_ projects a small profit for Arsenal for 2024-25 which, combined with those deductions turning previous losses into an estimated football earnings profit, leaves the North London side firmly in the black for the three-year cycle. They should be far from any trouble with the football earnings rule.
_The Athletic’s_ current projection has Arsenal’s SCR at around 68 per cent. That is under the 70 per cent limit but leaves little room for error in our assumptions. It is easy to see why the matter was a live one this summer. Their inability to net any sizeable sales over the summer has left their SCR position on a knife edge.
_Aston Villa_
_The Athletic_ projects Villa’s loss dropped significantly in 2024-25; a small profit might even have been made. That on its own wouldn’t be sufficient to offset the big losses of two years prior but, as a result of entering into that Settlement Agreement, it doesn’t need to. Villa were nowhere near their high level of loss in 2024-25, ensuring compliance with the football earnings rule under the terms of their Settlement Agreement.
Villa also breached the squad cost rule in 2024, exceeding UEFA’s 80 per cent limit. The lowering to 70 per cent is a good reason for Villa’s lack of summer splurging; they were the lowest spending Premier League club on a gross basis.
The more positive thing for Villa is their Settlement Agreement makes no reference of extra punishment for another breach of SCR; breaching the football earnings rule would have been far more of a risk for them. To that end, if they are in breach they can expect another fine to go alongside the ones already agreed.
_Chelsea_
The expectation is that Chelsea will not exceed the loss limit detailed in the Settlement Agreement for 2025-26, in large part because of business already done. FIFA’s Club World Cup was already a boon to finances; going on to win it banked them around £85m which can be applied in full to their current SCR calculation. Chelsea’s Settlement Agreement with UEFA spans the next four years rather than the three of Villa’s, with the financial penalty meted out to Stamford Bridge notably higher than Villa’s too. Chelsea paid a fine of €31m (£26.8m), which could rise by a further €60m (£51.8m) if conditions within the agreement are breached.
Crystal Palace will comply with both sets of rules. Liverpool are thought to be out of trouble.
_Manchester City_
City had no trouble complying with the football earnings rule, and were significantly profitable across the three-year assessment period. City have one of the highest wage bills in world football, and one of the most expensively assembled squads. Yet they were also the second highest earning club in the world in 2023-24, and have for years been formidable sellers of players. _The Athletic_ projects little trouble from a squad cost ratio perspective; we put City’s figure in the range of 60 to 65 per cent for 2025.
_Newcastle United_
Newcastle’s position in terms of UEFA’s loss limits looks precarious, not least as they were only able to avoid a breach of Premier League rules in 2023-24 by undertaking transactions which UEFA made the club discount from its continental submissions. Even with growing matchday and commercial income, and a potentially static wage bill as a result of no Champions League football, it is unlikely Newcastle’s 2024-25 result was sufficiently improved to avoid another notable loss. _The Athletic_ projects Newcastle have comfortably breached the €60m three-year loss limit to the end of June 2025, and will, as Aston Villa and Chelsea did before them, likely now face a financial penalty.
_The Athletic_ projects Newcastle to be on the right side of the 70 per cent marker for UEFA’s squad cost rule, though the number of assumptions involved makes it far from certain.
_Nottingham Forest_
Even with revenue up, and some conservative judgements on the cost of player trading undertaken over the past year, Forest lost a chunk of money last season. Combined with minimal deductions for ‘good’ expenditure, that leaves them a fair way shy of the three-year €60m loss limit. _The Athletic_ projects their football earnings loss could be closer to double that. As with Newcastle, the New York Times projection is that a financial penalty looms.
Similarly, meeting the squad cost rule in 2025 looks a big ask for Forest. Forest’s notable turnover bump last season means they’re on the right track, but they had a long journey to make. At least in the sense of rule compliance, their leap into European competition has come too soon to change that; revenue growth hasn’t yet matched up to the big investments made in the squad since promotion. A breach on both of UEFA’s financial rules looks likely at the City Ground this season.
_Tottenham Hotspur_
Spurs’ loss figures include the huge costs of depreciating the club’s new stadium. _The Athletic_ projects Spurs to be well below UEFA’s 70 per cent limit, with an estimated squad cost ratio of in the 50 to 55 per cent range for 2025, and probably at the low end too.