Premier League’s new SCR system will reshape club budgets and transfers starting 2026/27

From the 2026/27 season the Premier League will replace its long-standing Profitability and Sustainability Rules (PSR) with a new regulatory regime called Squad Cost Ratio (SCR), radically changing how clubs spend on players. The shift promises greater financial discipline — but also forces clubs to rethink transfer strategies, wage bills and long-term planning.

 The Premier League has officially voted to scrap the old PSR framework and introduce SCR (along with a companion rule, Sustainability and Systemic Resilience, SSR) starting from the 2026/27 season. Under SCR clubs’ “on-pitch spending” — that includes player and head coach wages, transfer fees (amortised), and agents’ commissions — will be capped at 85% of the club’s football-related revenue plus net profit or loss from transfers.

On top of that, clubs will have a multi-year “allowance” buffer of 30% above that 85% threshold: spending above the 85% but within that buffer triggers a levy (a kind of “luxury tax”). Once that buffer is used up, any further overspend could result in sporting sanctions, including point deductions.

SCR replaces PSR, which required clubs to balance profitability over a rolling multi-year cycle and limited cumulative losses. The new rules shift the emphasis from backward-looking loss control to forward-looking cost control: spending must now be aligned every season to the club’s income — or risk penalties.

For clubs this means a substantial change in strategy. Big clubs that have historically spent aggressively in transfer windows may face tighter constraints on how much they can invest in playing squads. Clubs with lower revenues will find it harder to compete — because their 85% will correspond to a lower absolute budget. At the same time, SCR forbids clubs from circumventing limits by selling non-football assets (hotels, women’s teams, etc.) to related companies — a loophole some clubs exploited under PSR.

In practice this could mean: fewer blockbuster signings, more conservative wage negotiations, emphasis on profitable transfers and youth development, and stronger financial planning. For mid- and lower-tier clubs, SCR might encourage prudence and sustainability rather than risky overspending. For big clubs — especially those competing in Europe and with large revenues — SCR still offers room to maneuver, but within tighter guardrails.

Overall, the new SCR/SSR regime marks the most significant restructuring of the Premier League’s financial rules in years. If properly enforced, it could bring greater transparency and long-term stability to club finances — while also forcing a rethinking of how teams build squads and approach transfers.