🔗 Share this article

A key decision on whether to scrap the Premier League's controversial profit and sustainability rules and adopt an "alternative system" is reportedly "coming up", according to chief executive Richard Masters.

The current regulations, established in the 2015-16 season to curb excessive club spending, permit a £105 million deficit over a three-year reporting cycle.

However, they have been criticised by several top-flight teams for restricting their investment potential.

Sources suggest that a decision on any changes is expected to occur at a November gathering.

Earlier this year, teams opted to retain PSR for the current season.

However a squad cost ratio (SCR) system of financial control was adopted by the Premier League on a trial, non-mandatory footing.

SCR is similar to Uefa's existing financial rules and allows clubs to spend up to a portion of their overall income on squad-related costs.

Nine of the league's 20 clubs already have to comply with Uefa's SCR as a result of qualifying for Europe.

Both Chelsea and Aston Villa were fined by Uefa in July for breaching the rules.

When questioned regarding SCR during the sports leadership summit in London, Masters said: "We are consulting with our teams about an alternative system.

This doesn't imply we don't think the PSR system works."

He added: "It's about closer alignment with European regulation, which is team expenditure ratio, which is a revenue test.

In Uefa, it's now set at 70%. Our framework will allow 85% because we always want our clubs to have the ability to invest.

"The Premier League has been built on the back of investment in which global financial resources are coming in. We don't want that to be stifled off."

Previous Rule Breaches

Premier League clubs Everton and Nottingham Forest were docked points in the 2023-24 season for violating financial rules.

Last year, a Villa executive the club's co-owner claimed the rules "lack logical foundation" and protected the biggest clubs, while he was considering legal action against the rules.

Having been forced to offload players to adhere to the rules, Magpies' head coach has also been critical of PSR, claiming it encourages teams to sell academy products.

"Financial sustainability rules represent retrospective profit assessment and has its own advantages and drawbacks. No framework is flawless," said Masters.

"We have to keep these things balanced and persist with discussions with our clubs, and that's an important decision, so we need to allocate sufficient time to ensure accuracy. But that decision is coming up."

Supplementary Regulatory Approaches

The league is additionally testing another model known as 'revenue-based capping' (TBA) which essentially limits the amount any club can spend as a proportion of the revenue generated by the lowest-earning club.

Reports suggest the proposed regulations - if approved could also include TBA, and would take effect at the beginning of the upcoming campaign.

Historic expenditure during the recent player acquisition period reinforced some top-flight clubs' concerns about PSR, and if modifications are necessary to protect competitive balance considering the extra income being generated for those involved in the expanded Champions League and global club tournament.