On 30 June this year, Premier League Profit and Sustainability Rules will die. It is safe to say Everton won’t be among the mourners at the funeral.
In January, Everton confirmed that the Premier League had discontinued all PSR charges against the club.
After Dan Friedkin stabilised the finances and the Toffees moved into their lucrative new home at Bramley Moore Dock, the spectre of PSR has faded somewhat.
But during the Farhad Moshiri era, Everton lost almost £720m and fell foul of PSR – which limits losses over a rolling three-year period to £105m, with adjustments for certain spending – twice. And as recently as the summer, the club was still actively anxious about PSR, as evidenced by the intra-company sale of the women’s team before the accounting deadline.
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Relations between the club and the league have been fractured as a result of the PSR drama of recent years, with the Friedkin Group having made a concerted effort to repair the relationship since their takeover in December 2024.
In November last year, Everton were among the clubs to vote in favour of PSR’s successor: SCR, or Squad Cost Ratio rules.
Under SCR, which is similar to UEFA’s spending rules, clubs must spend no more than 85 per cent of their revenue plus a three-year average of player sale profits on first team wages and transfer costs. That 85 per cent is flexible, however, as long as clubs make up for surpluses in subsequent seasons.
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After the close of the January transfer window – which ended with the loan signing of Tyrique George from Chelsea being the club’s only major bit of business – Everton must now adapt to this new reality.
With reports in recent days suggesting that David Moyes and his recruitment team are targeting Chelsea’s Liam Delap and Bournemouth’s Marcos Senesi, as well as another loan deal for Jack Grealish, the club’s readiness to comply with SCR is under the spotlight.
Speaking exclusively to Everton News, University of Liverpool football finance lecturer Kieran Maguire said: “SCR will give them greater flexibility than PSR. Under the new rules, the clubs with the big revenue streams will be very much favoured.
“It will mean the move to Bramley Moore Dock is a success, because it will give them more room under that 85 per cent limit. It should be stressed, however, that 85 per cent is a limit, not a target. But all the same, Everton should be able to punch much higher than some of the other middle class clubs in the Premier League. They’ll have greater capacity than the likes of Brentford, Brighton and so on.
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“So SCR will help them to be the best of the rest. It won’t help them get into the Big Six, however. Those clubs have got Champions League revenue, the commercial revenue which comes from being global brands and so on. Everton aren’t a tourist club. They have a local fanbase on Merseyside, which is a good thing, but it does mean the Big Six have an advantage over them financially.”
So how much will Everton be allowed to spend? Let’s look at some illustrative figures to get a flavour.
From the data in Deloitte’s recently published Football Money League, we know that Everton generated significantly more revenue last season than in 2023-24: about £204m compared to £187m.
Had SCR been in place last season, 85 per cent of Everton’s £204m turnover would have given them a £173m spending cap before player sale profits were taken into account.
But revenue is expected to rise by as much as £50m at the Hill Dickinson Stadium, which would give Everton a cap of around £217m to spend on wages and transfer amortisation. That sum will rise further still should Moyes’ side pick up more prize money in the Premier League.
Everton’s latest confirmed wage bill, for 2023-24, was £157m. Of that sum, probably 70-80 per cent was attributable to the first team. Amortisation meanwhile, which is how clubs account for transfer fees over a player’s contract length, was £65m. So, even after a ramp-up in spending over the summer, the Toffees should have plenty of room to manoeuvre.
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The Toffees have also made significant player sale profits – which are calculated as sale price minus a player’s amortised book value – in recent seasons too. That will increase their limit.
All in all, Everton are likely to have ample headroom under the domestic SCR system. And with the flexibility of the cap, the Friedkins will have scope to increase their spending to fuel growth, if they choose to take advantage of it.
Should the Toffees threaten the European places this season, things could get more complicated. In Europe, the SCR limit is 70 per cent. And there is less leeway for clubs who breach, as Chelsea and Aston Villa have learned in recent months.
But should Moyes’ side be in that situation come the end of the season, the Friedkins will file that under ‘nice problem to have’.
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