Exclusive: Man City ruling ‘huge factor’ as Premier League to change PSR
Man City’s charges will be a decisive factor as the Premier League looks to radically change the financial rules that dictate how much money English clubs can spend.
That is according to football finance expert Dan Plumley, who explained to Football Insider how a switch to the financial rules that UEFA employs would work.
The Premier League‘s profit and sustainability rules (PSR) will be in use once again next season, after the league’s clubs agreed to delay the introduction of squad cost rules (SCR) [BBC Sports].
SCR limits a team’s spending to a percentage of it’s revenue generated, rather than the current PSR rules that put a limit of £105million in losses over a three-year period.
However, due to City’s legal challenge of associated party transactions (APT) in February, a pause was put on the rule’s introduction.
And the Sky Blues’ challenge of APT rules may not be the only legal sticking point of SCR’s introduction to the Premier League.
Man City’s 115 charges another factor for Premier League
Speaking exclusively to Football Insider, finance expert Plumley explained that the Premier League face a difficult problem knowing how to transition from PSR to SCR.
The senior lecturer from Sheffield Hallam University cited UEFA’s gradual transition over a three-year window as something the league may do, rather than simply swapping from one ruleset to another.
Plumley also pointed to City’s outstanding 115 charges from the Premier League, which remain unresolved, as another “huge factor” to contend with.
He said: “I think relaxed is probably the wrong word [to describe the Premier League’s view on clubs failing PSR this year], in terms of how we should be viewing it.
“But I certainly think there’s a question mark and a conversation to have about, how do you transition from PSR to squad cost?
“And look at what UEFA have done again, they’ve kind of put a hard stop on FFP as it was and they’ve transitioned to these new FSRs over three years, and we’re not even at the end of that three-year window yet.
“So in terms of the squad cost rule, they set it at 90% of turnover, then 80%, then 70%, which was the marker that they want to get to by the end of 25/26 season, so we’re still in a transition period.
“And I think the Premier League, for me, I could be wrong, but I think they’ve almost got to do something similar.
“You’ve got to give clubs a chance to transition and we know they’re going to run a shadow squad cost rule in the background for the season we’re about to go into.
“It’s on the club’s radar and I think that’s going to be really important in these kinds of cases that we think are on the margins.
“At some point, there’s going to have to be a hard stop to PSR and the move to squad cost rules, if we’ve got our predictions right.
“So I think that’s really interesting in a sense of, where do you draw the line on current cases and what follows next?
“They’ve not charged anybody yet, maybe we’ll see some charges this season, or maybe it will phase out and become something new.
“And of course, on top of that, we’ve still got the Man City verdict to drop which is a huge factor in this as well. It’s tricky because there’s lots of moving parts.”
PSR not fit for purpose as Chelsea, Aston Villa exploit loopholes
Whilst the Premier League may struggle to transition to SCR, Chelsea and Aston Villa have both proven PSR to be ineffective.
The two clubs have exploited a loophole that allows them to sell their women’s teams to themselves in order to register profit on their accounts.
Chelsea sold their women’s team for £198.7m [BBC Sport], whilst Villa are selling their women’s team for a reported £55m [The Telegraph].
Whether selling women’s teams or other assets to yourself will be something the Premier League can outlaw with the introduction of SCR remains to be seen, but the current ruleset is failing to stop clubs spending outside their intended limits.