Premier League Bans Clubs from Selling Assets to Themselves Under New Financial Rules

Premier League clubs will no longer be permitted to sell assets to related parties in a bid to boost their spending power, after voting through major changes to financial regulation that will overhaul how top-flight teams manage their squad costs.

At a meeting on 21 November, clubs voted 14 to six in favour of introducing new squad cost ratio (SCR) rules, which will replace the league’s profitability and sustainability rules (PSR) from next season. Under the current PSR framework, clubs have been able to include money received from the sale of fixed assets to related companies when calculating revenue.

Chelsea took advantage of this in June 2023, selling two hotels to a sister company for just over £70 million, and their women’s team to parent firm Blueco for just under £200 million. Both transactions improved the club’s PSR position. Aston Villa completed a similar move earlier this year, with their women’s team sold to the club’s parent company in a deal reported to be worth £55 million.

Although the sale of fixed assets will still be permitted, the PA news agency understands these transactions will no longer count towards the revenue used to determine how much a club can spend on squad-related costs. Under SCR, clubs will be restricted to spending no more than 85 per cent of their football revenue on on-pitch expenditure.

A proposed hard spending cap, known as top-to-bottom anchoring (TBA), was rejected. Twelve of the 20 Premier League clubs are understood to have voted against the measure, which would have limited any team’s squad spending to five times the amount received in central income by the league’s bottom-placed side.

The Professional Footballers’ Association (PFA) had warned that TBA amounted to a salary cap and had prepared legal action had the vote passed. Only seven clubs are understood to have backed the proposal, with both Manchester clubs and Aston Villa previously known to be opposed.

It is understood that clubs first voted on TBA before proceeding to the 14-6 vote that approved SCR. Some sources expressed surprise that SCR was passed without the anchoring mechanism, suggesting that adopting one without the other would entrench the dominance of wealthier clubs. One source likened smaller clubs’ support for the measure to “turkeys voting for Christmas”.

Uefa operates a similar cost-control system, limiting clubs in its competitions to spending 70 per cent of revenue on squad costs.

The Premier League confirmed that under SCR, clubs will have access to a multi-year allowance of 30 per cent that can be used to exceed the 85 per cent spending threshold. Clubs using the allowance will incur a levy similar to a luxury tax. Once the allowance is exhausted, any further breach of the 85 per cent limit will result in sporting sanctions, including potential points deductions.

The new SCR rules will come into effect from the start of the 2026/27 season.

Clubs also voted to introduce new Sustainability and Systemic Resilience (SSR) rules. These will be used to assess clubs’ financial health in the short, medium and long term via three tests – the Working Capital Test, Liquidity Test and Positive Equity Test – as English football prepares for the introduction of an independent regulator across the top five tiers.