The Premier League will soon decide on whether to get rid of its divisive profit and sustainability rules (PSR) and introduce a new squad-cost ratio system, chief executive Richard Masters has said.
PSR, introduced in 2015/16 to prevent clubs from overspending, has led to numerous breaches by clubs and has been criticised by teams such as Manchester City, Newcastle United and Aston Villa for limiting the ability to spend.
Masters said a new system would align more with Uefa financial regulations, which cap a club’s spending on player wages, transfers and agents’ fees at 70 percent of their revenue.
However, the Premier League would have a higher cap of 85 percent.
“We are talking to our clubs about an alternative system. That’s not to say we don’t think the PSR system works,” Masters told an audience at the Leaders sports conference.
“It’s about closer alignment with European regulation, which is squad cost ratio, which is a revenue test.
“The PSR is a look back profitability test and has its own strengths and weaknesses. No system will be perfect.
“We have to keep these things balanced and continue the conversation with our clubs, and that’s an important decision, so we should take the time to get it right. But that decision is coming up.”
England’s top-flight is by far the most lucrative soccer league in the world, generating £6.7bn in domestic broadcast rights alone for the 2025-2029 cycle.
Masters said the proposed higher spending cap would help Premier League clubs maintain their competitive edge.
“In UEFA – it’s now set at 70 percent. Our system will be 85 percent because we always want our clubs to have the ability to invest,” he added.
“So when you compare the Premier League system at 85 percent, if it happens, and you look at the other big European leagues, we have a more permissive system, too permissive some might say…
“The Premier League has been built on the back of investment in which international capital flows (are) coming in.
“We don’t want that to be to be stifled off.”
The new rules, initially intended to be in place for this season, will be put to a vote by Premier League clubs next month.
