When Premier League teams approved the introduction of financial regulations in 2013, West Ham United’s joint-chairman David Gold revealed: “Some clubs are a little concerned, but the vast majority voted in favour.”
A decade on, the majority of Premier League clubs are more than a little concerned by the strict punishments resulting from the rules they originally approved.
During the 2023/24 Premier League season, a fifth of the top flight is under some form of investigation from the division’s bean counters. Originally known as financial fair play regulations (FFP), the spending habits of England’s top flight have to abide by the Premier League’s profit and sustainability rules (PSR).
Here’s everything you need to know about a set of economic restraints that have top clubs so worried.
The top-line figure that is invariably churned out when PSR comes up is that clubs are allowed maximum losses of £105m over a three-year rolling period. However, the limit is actually only £15m but can be stretched to £105m if the club’s owners are willing to cover £90m. This extra investment can only come in the form of owners expanding their portfolio of shares in the club rather than simply loaning the money.
This is why Manchester United have been more cautious in recent windows. United’s majority shareholders, the much-maligned Glazer family, are infamously reluctant to put money into the club. Director of football John Murtough warned that PSR has “real teeth” while bracing fans for a quiet start to 2024 in the transfer market.
At the end of each calendar year, Premier League clubs have to submit their financial accounts for the previous season to the division – so the books from 2022/23 were handed over on 31 December 2023. But it is not as simple as tallying up the total income and expenditure and checking whether it breaches the £105m cutoff.
Any costs relating to the stadium, training ground, women’s team or academy are not considered.
COVID-19 also wreaked havoc with the calculations. Justifiably, clubs could not be blamed for a significant drop in revenue when it was illegal for fans to attend matches. The 2019/20 and 2020/21 seasons were clumped together and any losses that were made due to the pandemic – a subjective judgement that some clubs stretched to the limit – were also ignored.
An independent judicial panel, headed by Murray…