NEWS: Premier League to overhaul financial rules, new system by 2025-26 season

The top flight’s profitability and sustainability rules (PSR) have been in the headlines this season after Everton and Nottingham Forest had points deducted for breaching them.

However, clubs have been discussing a move towards a new system based on squad cost-to-revenue ratios for several months, similar to UEFA’s financial sustainability regulations (FSR). The new Premier League rules could be fully in place by 2025-26 and operate in shadow form next season to get clubs used to them, with the existing PSR rules still in force for next season.

Clubs are understood to have unanimously voted in support of squad spending caps linked to revenue being a key principle in the new-look cost control system on Thursday.

Clubs playing in European competition from 2025-26 will need to limit squad-related costs – including spending on transfer and agents’ fees plus wages – to 70 per cent of revenue to abide by UEFA’s rules.

It is understood other Premier League clubs will be limited to 85 per cent of revenue, with points deductions still likely to be applied where breaches of the cap are serious.

Reports suggest that if the rules are agreed in full by the time of the league’s annual general meeting in June, clubs have accepted their introduction in shadow form for next season before coming into force in 2025-26.

Everton have been docked eight points this season for two breaches of PSR, while Forest incurred a four-point deduction.

Everton’s two-point deduction linked to the second breach is the subject of an appeal, as is the penalty imposed on Forest.

Manchester City also face 115 charges for alleged breaches of Premier League financial rules, but this case is not being dealt with under the league’s standard directions process for PSR due to its complexity and size.

The Everton and Forest cases related to losses exceeding the permitted threshold under the current PSR.