Understanding the New Squad-Cost Ratio Rules in Premier League Football

The Premier League has implemented squad-cost ratio (SCR) rules for the 2026-27 season, following a trial period during the 2025-26 season. These rules establish a spending cap on squad costs based on a percentage of a club's total revenues.

Under the new regulations, clubs participating in European competitions are limited to a 70% SCR cap, while those only competing domestically are capped at 85% of their total revenue. Clubs can exceed this limit by utilizing a 30% multi-year rolling allowance, allowing for strategic investments despite revenue fluctuations.

The SCR is calculated by dividing squad costs, which include player wages, transfer amortization, agent fees, and impairments, by adjusted revenue, encompassing matchday income, broadcast revenue, commercial revenue, stadium events, and player-trading profits. This new framework aims to promote financial sustainability and prevent excessive spending by clubs.