Manchester United, Newcastle, and Aston Villa have received bad news as the Premier League’s profit and sustainability regulations will stay in effect for another year. This comes after Manchester City’s legal challenge.
Clubs had initially agreed to sign up to new protocols to replace the existing, controversial Profit and Sustainability Rules (PSR).
There were plans to implement a new rule called the Squad Cost Ratio, which would have limited clubs to using only 85% of their income on player salaries, transfers, and agent fees. However, the introduction of this rule has been postponed.
A system, known as anchoring, had also been provisionally approved by clubs last year and expected to be introduced for next season.
Clubs have now voted to delay its introduced for a further year, with the existing rules set to remain in place next season.
The reason behind this delay is said to be due to Manchester City’s recent objections to the associated party transaction (APT) rules.
Chelsea owner Todd Boehly arrives at the Premier League stakeholder meeting, where a decision was taken to postponed the introduction of new financial rules for next season
PSR rules with remain in place for a further year, with Man United admitting last month the club risked a potential breach in the future if ‘big decisions’ were not made
Clubs have delayed introducing new rules after Man City challenged the Premier League’s regulations on sponsorship deals again
The reigning Premier League champions last week informed the Premier League it will seek an arbitration hearing over amendments to APT regulations.
City scored a victory over the competition when an arbitration panel found elements of rules on deals with parties linked to clubs were ‘unlawful’.
However, the Premier League then swiftly made a number of amendments, which were voted through by a majority of their clubs.
The PFA last week after threatened to take legal action against the Premier League over the proposed ‘anchoring’ system.
The system would limit clubs spending on transfers, wages and agent fees. The precise ratio has yet to be determined, but the new rules are expected to ‘anchor’ spending to around five times the income of the bottom club.
A total of 16 clubs voted in favour of exploring anchoring last year, with Manchester United, Manchester City and Aston Villa voting against and Chelsea abstaining.
Existing Premier League rules restrict clubs to losses of £105m over a three-year period.
Liverpool chairman Tom Werner and West Ham vice-chair Karren Brady attended the Premier League shareholders meeting where the top flight’s financial rules were on the agenda
Last year, Aston Villa floated the idea of raising that threshold from £105m over three years to £135m.
In January, Man United admitted the club needed to make ‘difficult choices’ to become profitable again and avoid a potential breach of the rules.
‘We are currently making a significant loss each year – totalling over £300m in the past 3 years,’ the club told fans last month.
‘This is not sustainable and if we do not act now we are in danger of failing to comply with PSR/FFP requirements in future years and significantly impacting our ability to compete on the pitch.’
Newcastle, despite having the significant financial backing of the Saudi Arabian owners, have had their spending limited under the PSR regime.
Magpies boss Eddie Howe admitted last month that the club need to avoid falling into a PSR hole that forces them to sell star academy products like Lewis Miley.
Howe admitted in January that Newcastle had no choice but to sell Elliot Anderson to Nottingham Forest last June, insisting the club would have faced a points deduction without it.
Aston Villa last year floated raising the threshold of £105m in losses over three years to £135m
Eddie Howe warned last month that Newcastle must avoid falling into a PSR hole
No top-flight club has received a charge for breaking spending rules for the 2023-24 accounting period, with a decision taken last month.
Leicester, however, remain in dispute with the Premier League over their 2022-23 accounts.
Everton and Nottingham Forest were charged for a breach of PSR regulations in 2024, pertaining to their 2022-23 accounts, with the latter club docked four points.
The Toffees were docked two points as the charges were heard going into the end of the 2023-24 season, having previously been docked 10 in November 2023 for a breach of the regulations in their 2021-22 accounts. This was later reduced to six on appeal.
