The pre-Profit and Sustainably Rules age was a simpler time. Premier League clubs were broadly allowed to spend freely. So freely that occasionally a club would spend their way into oblivion (looking at you, Leeds United and Portsmouth), but at no point was it expected that a club would have to sell a hotel to balance the books. Many supporters – and club executives, for that matter – are still getting their heads around the Premier League’s PSR.
Major League Soccer fans know how they feel. Spending limits and complex roster rules have been part of the league’s DNA since its inception nearly 30 years ago. In MLS, it’s not just about what you can spend, it’s about what you’re allowed to spend, often to the frustration of those who believe the league is holding itself back from reaching its full potential.
MLS may have been ahead of the game, though. While it has been widely argued for years that the league must strip back its salary and transfer rules to align itself with European soccer, European soccer is now moving closer to the sort of model used in American sports. Has MLS had it right all along?
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PSR’s original intention was noble. It was introduced to police how much money clubs can lose over a given period of time, with Premier League teams entitled to lose a maximum of £105m across three seasons. The creation of these rules, however, opened up a number of loopholes that have warped the transfer market.
Infrastructure costs can be deducted from the balance sheet, hence why Chelsea sold two hotels next to Stamford Bridge to a sister company owned by Todd Boehly and Clearlake Capital earlier this year. Academy and women’s football costs are also deductible, while money banked from the sale of homegrown players can be counted as pure profit.
Fans find that final quirk particularly unpalatable. Conor Gallagher was Chelsea through and through. He came through the academy at Cobham and was one of the club’s best performers last season. Despite that, the midfielder was pushed out the door to Atlético because Chelsea could bank £35m in pure profit. Even worse, Chelsea gave Atléti the money to buy Gallagher by signing João Félix for a fee of £45m which could be spread over several seasons. PSR…