ENGLISH PREMIER LEAGUE NEW FINANCIAL RULES

English Premier League (EPL) football clubs are changing to a new financial system called squad cost ratio (SCR) next season,

This will allow clubs to spend 85% of their income on the cost of their players. However, when applying a complicated set of factors, clubs could be able to spend up to 115%.

On the other hand, the UEFA SCR spending limit is 70%, which applies to all football clubs playing in the Champions, Europa and Conference Leagues.

However, there is no universal SCR or percentage amongst the top European football leagues, but others have more stringent financial rules than those of the EPL.

This means that those EPL clubs that are not playing in European competitions, have a much higher spending power, and this could increase their ability to attract new players and affect financial fairness.

Not surprisingly, UEFA is concerned that this disparity could undermine financial stability measures in European football. These measures are intended to enhance long-term economic viability; ensure that football clubs operate within their means; protect creditors; and promote fair competition. The rules are based on solvency, stability, and cost control—capping spending on wages and transfers to a percentage of the revenues of clubs.

The director of financial sustainability and research at UEFA, Andrea Traveso, has summed up the issue in the following terms:

„The objective at UEFA is financial sustainability. The objective at the Premier League is competitiveness.“

This is a controversial and complex area of sports law and practice, and we advise on all aspects of financial sustainability in football in Switzerland, the United Kingdom and the rest of Europe. Further information is available from our Managing Partner, Dr Lucien Valloni and our International Sports Law Consultant, Prof Dr Ian Blackshaw, by emailing them at valloni@valloni.ch and blackshaw@valloni.ch respectively.