A clue to the importance of Friday’s Premier League shareholders’ meeting is the weight of documentation sent out to all 20 clubs over the last week.
Hundreds of pages have detailed the proposed changes to financial regulations across handbooks and supporting manuals of evidence. The case for significant reform has been laid out, and now, inside a central London hotel, comes the opportunity for it to be introduced.
Three votes might change everything, and it might change nothing at all.
To explain what is at stake and what clubs are thinking, The Athletic has spoken to multiple people involved at Premier League clubs, granting them anonymity so that they can speak freely.
Here, Chris Weatherspoon and Philip Buckingham guide you through a big moment in shaping how Premier League clubs manage their future finances.
What’s happening this week?
The Premier League has arrived at a crossroads. A decade on from introducing its first financial fair play regulations for the 2015-16 season, there has been a growing acceptance that reform is necessary.
Faith in the existing profit and sustainability rules (PSR), allowing for losses of up to £105million ($137m) over a three-year accounting period, has been eroded through the use of loopholes and has led to protracted discussions on what ought to come next.
The spring of 2024 brought two significant proposals — squad cost rules (SCR) and top-to-bottom anchoring rules (TBA or simply ‘anchoring’) — and it was later agreed at the summer AGM that year for both to be trialled on a non-binding basis through the 2024-25 season.
SCR broadly mirrored UEFA’s own reforms, allowing for 85 per cent of revenue to be spent on player costs, while anchoring was “designed to be a pre-emptive measure to protect the competitive balance of the Premier League”.
The last 18 months have allowed for a full evaluation of the two main proposals when shadowing PSR, as well as “extensive” consultation with stakeholders. Now comes the day to decide whether or not to press ahead.
Why should I care?
Not since the 20 Premier League clubs were asked if Video Assistant Referees (VAR) should be kept in June 2024 have they faced a vote carrying such significance.
That was centred on the irritations of technology, but this has the potential to leave a far deeper mark. The votes due to be held on Friday could bring fundamental changes to how clubs are financially managed.
The anchoring proposal, in particular, would be like nothing currently in operation. The richest clubs in the Premier League being tethered to those at the bottom would introduce a hard cap on what the elite are able to spend and, in theory, avoid the financial mismatches seen in other European leagues.
“It is the league’s objective to maintain the Premier League’s value, competitive balance and ensure clubs operate in a financially sustainable way,” a league spokesperson said last week.
There is a broader point here too, one which extends well beyond the 20 Premier League clubs in the room on Friday. England’s top tier leads the way in player spending, but the interconnected nature of association football means what happens there isn’t confined to one division alone. Inevitably, there are knock-on effects elsewhere.
Away from the top tier’s bright lights, two clubs in League One, England’s third division, last week highlighted the stark troubles afflicting club finances across the country. AFC Wimbledon and Exeter City, each owned by the respective clubs’ fans, both cited the growing, unsustainable costs of competing — costs driven by the ceaseless rise in player wages.
Wimbledon are now actively searching for outside investment; Exeter’s troubles are more nuanced, including a reliance on inaccurate financial forecasts, as reported by DevonLive, but the root issue remains the same. A large majority of clubs in England lose money, and many are reliant on benefactors to foot the bills. A slowing of rampant wage growth at the top end of the English game would, theoretically, be one step toward reversing the trend.
What is anchoring?
Aptly named, for one.
Top-to-bottom anchoring (TBA) would enforce an upper limit on clubs’ spending on wages and transfer fee amortisation (which includes agent fees), with that limit tethered to a financial measure linked to one of the least well-off clubs.
The chosen mooring point for TBA is the amount of central broadcast and sponsorship revenues dispersed by the Premier League to its clubs, with the proposed limit set at five times the sum distributed to the poorest club.
In 2024-25, Southampton received £109.2m while finishing bottom of the division, meaning the anchoring limit had it been in place then would have been set at £546m. It’s forecast that had anchoring been in place for the current 2025-26 season, expected increases in distributions to clubs following the start of a new TV deal cycle would have lifted the anchoring limit to £600m.
That limit will rise (or fall) in line with central distributions, but it represents a ‘hard’ cap on spending; in other words, the limit is the same for all 20 clubs, regardless of their financial situation.
Introducing anchoring would theoretically represent a further restraint on spending, as clubs would only be able to increase squad spending in line with the league’s TV money growth. Where other proposals like the squad cost rule (see SCR, below) are tied to a club’s income, anchoring applies across the board — leading to its characterisation as a ‘salary cap’.
Distributions to clubs are also made after accounting for the Premier League’s various costs. In that sense, were anchoring to be passed on Friday and then followed up with legal battles, as some parties have threatened, the costs incurred by the league in fighting its case would serve to reduce the anchoring limit from where it would otherwise have been.
What does anchoring mean for each Premier League club?
For the vast majority, it won’t change anything, at least directly. While we don’t know what the cap might move to in the coming seasons, based on the most recent figures, only four Premier League clubs’ revenues exceeded the £600m indicative limit mentioned above. That remains true even once we add in player profits averaged over the past three seasons, which are included as part of a club’s ‘relevant turnover’ for SCR purposes (again, see section below).
Most of the rest aren’t close to that level of relevant turnover, and given the other financial rules in play, without a sudden boom in income, they’d not be troubled by such a high limit. We can’t know exactly how clubs’ revenues will fluctuate in the future, but for now and a little while yet, it’s clear the proposed anchoring limit will far exceed the 70 or 85 per cent SCR limit clubs will already be restrained to (if the domestic SCR vote passes).
Six clubs that will have to take closer immediate notice of anchoring if it is voted in. Those clubs — Arsenal, Chelsea, Liverpool, the Manchester duo and Tottenham Hotspur — tend to play in Europe often anyway (Manchester United are this season’s only exception), so are already limited to spending 70 per cent of relevant income on squad costs under UEFA’s SCR regime. But there’s the chance the hard cap dictated by anchoring would fall below where a club’s 70 per cent limit would sit.
According to the most recent figures, no club’s SCR limit topped the proposed £600m hard cap, albeit Manchester City would have approached it in 2023-24. The others actually have some way to go in generating extra income before getting there, though in the cases of both Arsenal and Liverpool, it should be said both are expected to disclose sizeable revenue increases when they publish their 2024-25 accounts, therefore increasing the squad cost limit outlined in the graphic above.
Even so, the proposed level of the anchoring limit would not suddenly force all of England’s elite to scythe player costs. Perhaps of greater concern to some is the chance that an anchored limit, or hard cap, will become more of an issue in the future, as non-broadcast revenues continue to grow but clubs are left tethered to broadcast distributions.
The broader ramifications of setting a hard cap on spending are harder to determine. A reasonable expectation is that it would slow the growth of player wages, even if it did heighten the chance of some players moving abroad to clubs with a higher spending limit.
Were a club to breach the anchoring limit, they’d only receive punishment upon their second breach. That would arrive in the form of an immediate six-point deduction, then a further one point deducted for each £6.5m of overspending.
What is SCR?
The squad cost rule wouldn’t be anything particularly new to Premier League clubs, not least because SCR was initially introduced by UEFA a few years ago and has been operated domestically, in shadow, both this season and last.
SCR puts a limit on how much clubs can spend on their playing squads and head coaches, with those costs comprising wages payable to those individuals, the amortisation costs related to them (being the costs of acquiring them or retaining them via new contracts), and any agent fees incurred through acquiring or retaining them.
The limit is dictated by a club’s income, with clubs allowed to spend a set percentage of revenue and player sale profits (averaged over three years) in a given assessment period. UEFA’s SCR regime places the limit at 70 per cent of relevant income, imposing a monetary fine for clubs in breach. Chelsea and Aston Villa received combined fines of around £14.7m (€17m) from UEFA last summer for breaching the squad cost rule in 2024.
The SCR limit to be voted on by Premier League clubs on Friday sits higher, at 85 per cent. The looser limit offered domestically carries echoes from when the current PSR regime was introduced over a decade ago, when the Premier League allowed its clubs to amass larger losses than UEFA rules of the time.
Other than the higher limit, another important difference between the Premier League’s proposed SCR and that operated by UEFA concerns the period of assessment. UEFA’s SCR runs annually, from January to December.
By contrast, the Premier League’s version would run in line with the football season. That makes more sense, but would also add to the administrative burden of those clubs competing in Europe, as they’d now have to run two sets of calculations and forecasts across different dates.
What does it mean for each Premier League club?
SCR is strange in that had it been introduced domestically ahead of the current season, as previously planned, nine of the Premier League’s 20 clubs wouldn’t really have been impacted, other than by the differing assessment periods detailed above.
Those nine — Arsenal, Aston Villa, Chelsea, Crystal Palace, Liverpool, Manchester City, Newcastle United, Nottingham Forest and Tottenham Hotspur — are all competing in UEFA competition this season, and so are subject to the lower 70 per cent limit.
That still leaves 11 others who would have had to adhere to something new (albeit some clubs not in Europe this season have had to adhere to UEFA SCR previously), and SCR is certainly a shift from the existing PSR regime. The latter focuses on limiting losses and, as we’ve seen with a couple of recent examples, big squad spending can be offset by some rather creative ways of boosting the bottom line.
By contrast, SCR focuses directly on football-related costs, and covers a single year rather than the three that are assessed under PSR. It is important to note — and this is one of the reasons some clubs don’t like SCR — is that SCR’s relevant income measurement sees player profits averaged over the past three seasons. In other words, only one-third of a sale made now will count toward a club’s SCR income figure.
That limits a club’s ability to use player sales as a quick fix to regulatory issues, though there is a flipside: averaging player profits means they stay in a club’s SCR calculation for three years, meaning sales made in the past can help current-day figures (albeit only up to one-third of the total profit).
SCR is widely seen as having teeth, as showcased via those Chelsea and Villa breaches. The Athletic has previously detailed an expectation Villa and Forest will breach in 2025, with Arsenal, Palace and Newcastle all skirting the 70 per cent limit.
Whether an 85 per cent limit would cause compliance issues for the other 11 clubs naturally varies from one instance to the next. Some with already low wages and transfer fee amortisation to revenue ratios, like Brighton & Hove Albion and Brentford, won’t have much to worry about.
Others with higher such ratios will.
At last check, in 2023-24, Villa, Bournemouth and Nottingham Forest’s combined wage and amortisation costs each topped 120 per cent of turnover. That includes those clubs’ total wage costs (SCR will only take into account player and head coach expenses), but it’s still clear that a direct limit on squad spending will have an impact. Everton, Fulham and Wolves also had high wages-plus-amortisation ratios in their most recent accounts.
Clubs in the Champions League are already subject to UEFA’s SCR (Andy Buchanan/AFP via Getty Images)
What is SSR?
The lesser-known of this Friday’s trio under the microscope is SSR, or sustainability and system resilience. If that sounds like too much jargon in the name of finding another pithy acronym, the gist of the final proposed rule is to ensure clubs have sufficient money to meet commitments both in the short and long term.
SSR comprises three main tests: one focused on short-term working capital and two which look further into the future.
The working capital test covers one season, and seeks to ensure clubs have sufficient resources to handle both known outgoings and any reasonable fluctuations that may occur (think, for example, the fall in Premier League distributions which Manchester United and Spurs suffered during below-par domestic seasons in 2024-25).
The other two tests look at clubs’ long-term financial outlook. The idea is to assess the health of a club’s balance sheet, considering future liabilities like transfer instalments and debt repayments. They don’t require that clubs have a huge amount of cash sitting in the bank waiting to be used in the future, but do seek to ensure clubs have access to any funding as may be required.
What does it mean for each Premier League club?
In truth, it is hard to see how the SSR proposal differs substantially from the licensing system already due to be enacted under the new Independent Football Regulator (IFR).
The 2025 Football Governance Act, which introduced the IFR, lays out the need for clubs to, among other things, meet a ‘financial resources threshold requirement’ to be granted a licence which allows them to compete in the English pyramid. The SSR measures proposed by the Premier League seem to mostly just mirror a regime that will already apply to clubs anyway.
What’s more, SSR is unlikely to be something Premier League clubs would be close to falling foul of. While many make losses, access to funding for top-tier clubs tends not to be too troublesome — unless a newly promoted club hugely overleverages itself, the money earned through top-tier status makes it hard to see how any of the division’s clubs would realistically breach the proposed SSR regime.
Where SSR may have a greater impact is outside the Premier League. A new rule in the latter wouldn’t impact EFL clubs directly, but it may act as a signal for clubs further down the pyramid.
PSR (then known as Financial Fair Play) was adopted in the Championship on the back of its Premier League introduction. The top tier stressing the need to ensure short and long-term liabilities are covered would naturally become a consideration for the rest of England’s league clubs — notwithstanding the matter of whether the IFR’s licensing system makes SSR moot.
Who is in favour and who is against these proposals?
Let’s start with the cast-iron, guaranteed opposition. They will not be afforded a vote in tomorrow’s shareholder meeting, but the Professional Footballers’ Association (PFA) have left no doubt over their stance; push through anchoring and face the prospect of legal action.
PFA chief executive Maheta Molango, who spoke with the Premier League’s captains earlier this week, said litigation would be “inevitable” should clubs be asked to operate what the union considers to be a hard cap. Three of the UK’s leading agencies — CAA Base, Stellar and Wasserman — have also outlined similar threats to the Premier League.
The prospect of yet more legal challenges coming to the door might have coloured judgements in the last week, but the key decisions will ultimately be made by representatives of the 20 Premier League clubs when they close themselves in a conference room tomorrow.
This is not a straightforward shareholder meeting, and nor are the outcomes clear-cut. The three proposals are independent and, as such, there will be clubs that support one and not another.
Fourteen votes are needed to carry any motion put forward and there will be backing for all three votes to pass. The question is whether it will be enough. Clubs including Liverpool, Aston Villa, Everton, Sunderland and Burnley are expected to give their support to anchoring, SCR and SSR, while others will be minded to follow suit after lengthy consultations.
Anchoring, though, is expected to meet the greatest resistance. Clubs including Manchester City and Arsenal are expected by people in the industry to be ready to reject a system that has been trialled for the last 15 months but, equally, could support SCR if anchoring is voted down. The north London club’s position is also said to be less certain than City’s.
The lobbying of the last few weeks has also revealed continued support for PSR. Some of the Premier League’s established middle classes, such as Bournemouth and Brentford, believe it to be a system that best suits their strategies.
Those clubs, along with teams like Crystal Palace, typically generate player-trading profits they can leverage under PSR, with SCR threatening to average those out over three years. They are well-versed and comfortable with PSR, seeing little motivation to bring in SCR and a new means of assessment.
SSR, meanwhile, is not attracting nearly the same friction. Some clubs view it as unnecessary, but not enough to crystallise opposition in a year that has seen English football introduce its first independent regulator. This, in effect, is a nod to a changing landscape that promises improved financial governance.
Every club has been sent detailed reports on all three proposals in the last week and told they will be asked to vote on each one on Friday. Doubts have emerged that a vote on anchoring might not be held, such is the resistance, but that will hinge upon discussions that begin once all gather around the table. None can be sure just how it will all play out.
What does all this mean for clubs that play in Europe?
One of the biggest gripes among some of the larger clubs opposed to the new slate of proposed rules, and particularly to anchoring, concerns competitiveness in Europe. While all clubs competing in Europe are subject to UEFA’s 70 per cent SCR limit, there is concern that the introduction of anchoring would hamper English clubs abroad.
There is logic to the view. As we’ve seen, the ‘bigger’ clubs would still enjoy a significant advantage over domestic competitors, but a hard limit on spending, unmoored from a club’s revenue, could see clubs outside the Premier League enjoy greater scope to splurge on players.
The argument does, however, only hold for a tiny minority of European clubs. According to the most recently available figures, only four non-English clubs were in the top 10 for revenue in world football: Real Madrid, Barcelona, Bayern Munich and Paris Saint-Germain.
Yet of those four, per The Athletic’s calculations, only Real Madrid and Barcelona would have enjoyed a higher squad cost limit in 2024-25 than the £600m hard cap now proposed for English clubs. On this basis, Real Madrid’s spending power would far exceed others’, and is a key factor in the chagrin of some of the Premier League’s elite.
Yet there are question marks over how much of an advantage anchoring would confer on others. Barca’s revenue included over €70m in one-off income from selling seat licences at the revamped Camp Nou and, though revenues from the latter will flow soon enough, the club also has La Liga’s own spending cap to contend with. Their troubles with that have been legion in recent years, and it is debatable that they’d be able to spend up to whatever their UEFA SCR limit is as a result.
As for Bayern and PSG, the pair enjoyed one-off revenues of their own from the Club World Cup, while PSG’s turnover jumped as a result of the huge sum earned from winning last season’s Champions League. Even with those, The Athletic estimates their squad cost limits were lower than the proposed £600m anchoring limit.
Still, concerns about English clubs adhering to lower spending limits are rooted in reality, even if it is only against a tiny handful of clubs. Those clubs will expect to grow revenues further in the future, too. At home, if the Premier League’s future TV deals were to reduce in value, an anchored limit would fall, potentially widening the gap to the overseas elite.
Whether it is an acceptable trade-off to allow a sliver of the continent a spending advantage in exchange for an effort to retain competitiveness at home, and perhaps reduce huge loss-making in English football, is open to debate.
What happens if the votes don’t pass?
Everyone trudges back to square one. This has been the Premier League’s reform project for more than two years, a concession to the fact that PSR had its flaws. The new proposals, they have said, promote good financial governance, sustainability and competitive balance. To see them fall flat would be an uncomfortable blow after all the hard work and leave PSR as the default system in place.
Damage could be limited, though. For all that anchoring might not garner the necessary support, especially with the threat of legal action following, it could be that clubs are ready to accept SCR and SSR and still bring about significant financial reform. The way in which the three proposals are not bound to others ensures one or two could be voted through and a third could be rejected.
The Premier League is ready for change. The great unknown on Friday is how great that will be.
Additional reporting: Matt Slater