Despite a significant revamp of the league's spending rules, Premier League clubs have voted against implementing a salary cap.
The new proposals would have replaced the division's previous financial regulations with a fresh approach. The decision was made on Friday when all 20 Premier League clubs convened to vote.
It was determined that anchoring - essentially a salary cap - will not be incorporated into the new system. The proposal was rejected by 12 clubs, while seven were in favor - one club abstained. Nonetheless, the vote has led to some substantial changes. A squad-to-cost ratio will be enforced.
This new guideline will effectively supersede the profitability and sustainability rules (PSR). The proposal was approved with a 14-6 vote, with both Manchester United and Manchester City changing their stance.
Under the new guidelines, clubs are now restricted to spending no more than 85 percent of their annual revenue on "football costs", which is believed to include transfer fees and coaching staff expenses.
This system bears a striking resemblance to one already employed in UEFA competitions, where 70 percent of revenue can be allocated to player expenses.
Another proposal that was approved by the clubs were Sustainability and Systemic Resilience rules (SSR), which would subject clubs to a series of tests to ensure financial health. All 20 clubs voted in favour of this rule.
Premier League
Premier League teams have voted on new financial rules from next season (Image: Getty Images)
In the interim, anchoring would have imposed restrictions on clubs regarding expenditure on wages and the amortisation of transfer fees. This cap would have been calculated based on the sum distributed to the division's poorest club, with that figure then multiplied by five to determine each club's spending limit - essentially levelling the playing field in terms of transfer market purchasing power.
However, Premier League clubs have chosen not to adopt that proposal. The existing PSR framework permitted clubs to sustain losses of up to £105 million ($137.4M) across a three-year cycle.
Nottingham Forest and Everton have previously faced charges and received points deductions under the former system. Both Manchester City and Leicester City are currently embroiled in ongoing legal proceedings following respective charges.
The current regulations will stay in force for the remainder of this season.
A Premier League statement issued on Friday confirmed: "At a Premier League Shareholders' meeting today, clubs voted to introduce a new set of financial rules which will come into effect from the start of the 2026/27 season.
"Following extensive consultation, clubs agreed to bring in Squad Cost Ratio (SCR) and Sustainability and Systematic Resilience (SSR) proposals. There was insufficient support for a proposal on Top to Bottom Anchoring.
"SCR will regulate clubs' on-pitch spending to 85 per cent of their football revenue and net profit/loss on player sales. Clubs will have a multi-year allowance of 30% that they can use to spend in excess of the 85 percent.
Utilising this allowance will incur a levy and once the allowance is exhausted, they will need to comply with 85% or face a sporting sanction.
"The new SCR rules are intended to promote opportunity for all clubs to aspire to greater success and brings the League's financial system close to UEFA's existing SCR rules which operate at a threshold of 70 percent.
"The other key features of the League's new system include transparent in-season monitoring and sanctions, protection against sporting underperformance, an ability to spend ahead of revenues, strengthened ability to invest off the pitch, and a reduction in complexity by focusing on football costs.
"The Sustainability and Systemic Resilience rules assess a club's short, medium and long-term financial health through three tests – Working Capital Test, Liquidity Test and Positive Equity Test."