The Premier League said it is speaking to its clubs about potential changes to its system of spending regulations
Richard Masters, chief executive of the Premier League, during the Champions League match between Tottenham Hotspur and Villarreal CF at Tottenham Hotspur Stadium. Photo by Marc Atkins/Getty Images
Richard Masters, chief executive of the Premier League, during the Champions League match between Tottenham Hotspur and Villarreal CF at Tottenham Hotspur Stadium. Photo by Marc Atkins/Getty Images
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Everton will have the chance to call for the end of the Premier League financial rules that twice saw the club deducted points. English top-flight bosses is currently speaking to its clubs about the Profitability and Sustainability Regulations (PSR) that have been in place since 2015/16.
Under that system, a club can record £105m of permissible losses over a three-year cycle before facing sanction. Everton breached that limit in consecutive years, suffering a cumulative deduction of eight points as punishment.
Premier League chief Richard Masters has now confirmed his organisation is looking at potential alternatives to a system that critics say locks in the competitive advantage of the most successful clubs. He defended the PSR system in the process, but it is clear alternative schemes are under consideration.
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They include Squad Cost Ratio (SCR) - similar to the system used by UEFA. SCR ties club spending on squad related costs to its total revenue. For those competing in Europe, that means spending is limited to 70% of revenue.
According to a report by BBC Sport, Masters discussed SCR at the Leaders sports conference in London. He reportedly said: "We are talking to our clubs about an alternative system. That's not to say we don't think the PSR system works.”
He continued: “It's about closer alignment with European regulation, which is squad cost ratio, which is a revenue test. In Uefa, it's now set at 70%. Our system will be 85% because we always want our clubs to have the ability to invest.
"The Premier League has been built on the back of investment in which international capital flows [are] coming in. We don't want that to be stifled off."
PSR has been a contentious issue for several years. The issue came to the fore when Everton became the first club to be prosecuted under the system, initially being docked 10 points for breaches in the cycle that ended in 2021/22. That was reduced to six on appeal, but a further two-point penalty was implemented for a breach in the next financial year.
With both deductions being enforced in the same season - the 2023/24 campaign - the Blues were pushed into a relegation battle at a time when the club was already subject to the stress of ownership and boardroom instability.
Politicians took their concerns over the treatment of the club to Parliament, with the severity of the punishment - the initial 10-point penalty being more severe than a club that entered administration would be subjected to - and the inconsistency with which decisions were reached chief among the concerns.
While Everton were fighting their 10-point punishment, Nottingham Forest, the only other club to be deducted points for non-compliance, received a small sanction for a bigger breach, for instance.
Elsewhere, upwardly mobile clubs like Newcastle United and Aston Villa have claimed PSR has stunted their ability to challenge those already at the top because they are effectively unable to use their resources to play catch-up with clubs that have far greater revenues because of the success they already have.
The increasing prize money for participation in elite competitions like the Champions League and Club World Cup has only exacerbated that issue, they say.
Masters continued: "The PSR is a look-back profitability test and has its own strengths and weaknesses. No system will be perfect… We have to keep these things balanced and continue the conversation with our clubs, and that's an important decision, so we should take the time to get it right. But that decision is coming up."
Last season, clubs agreed to trial a version of the SCR system on a non-binding process and to do the same with another regulatory model, 'top to bottom anchoring' (TBA).
That system ties club budgets to a multiple of the income earned by the league's bottom side and is also being considered as a potential future cost-control scheme.