Key Takeaways:
- Premier League clubs rejected the proposed salary cap with a 12-7 vote at their most recent shareholder meeting
- A new financial framework replacing the Profitability and Sustainability Rules (PSR) will take effect from the 2026/27 campaign
- Clubs will be limited to spending a maximum of 85% of their annual revenue on “football costs” under the revised regulations
Salary Cap Proposal Defeated
The Premier League has announced that the suggested salary cap will not be enforced, after clubs voted 12-7 against its introduction during the latest shareholder meeting. Manchester United counted themselves among those opposed to the salary cap.
Major Overhaul to Spending Regulations
Instead of the wage restriction, all top-flight clubs have agreed to implement a significant change to financial governance, effective from the 2026/27 season. According to an official Premier League statement: “The Premier League has introduced a new set of financial rules, which will replace the existing Profitability and Sustainability Rules (PSR) from the 2026/27 season.”
🚨 𝗝𝗨𝗦𝗧 𝗜𝗡: Premier League clubs have today voted to reject the anchoring financial rule by a 12-7 vote.
This will keep the existing Profit and Sustainability Rules that limit losses to £105m over three years rather than introducing a salary cap linked to the bottom club's… pic.twitter.com/UCiMow70G5
— The Touchline | 𝐓 (@TouchlineX) November 21, 2025
The league explained that these guidelines emerged from extensive consultation with member clubs and other key stakeholders. The rules are designed to guarantee the financial health of clubs, encourage long-term investment, and protect competitive parity in the Premier League.
The objectives include seasonal in-competition monitoring and enforcement of compliance, bringing greater clarity and reliability for fans, clubs, and all involved parties. The Premier League noted that the framework is designed to align with UEFA’s regulations and uphold the aims of the Independent Football Regulator.
New Financial Controls Detailed
Following the rejection of the salary cap, clubs will retain freedom in setting wages. However, the new system introduces an expenditure limit, capping “football costs” at no more than 85% of each club’s annual revenue. This replaces the current PSR, and the limit will be measured once per year in March.
Clubs exceeding the new ceiling will have their Squad Cost Ratios (SCR) assessed at three points: after the season in June, and again in October of the same year, allowing for stringent enforcement.
The newly introduced regime aims to discourage unsustainable spending sprees, offering a different metric from the PSR. The Premier League clarified, “PSR evaluates a club’s overall profit by including all revenues and costs, while SCR focuses specifically on on-pitch spending.”
| Rule | Current PSR | From 2026/27 |
|---|---|---|
| Assessment Basis | Overall profit (all revenues and costs) | On-pitch spending (Squad Cost Ratio) |
| Spending Limit | No specific cap on “football costs” | 85% of annual revenue on “football costs” |
| Key Assessment Dates | Varies | March (limit taken), June and October (SCR assessed) |
| Implementation Season | Current | 2026/27 onwards |
