What is going on with PSR???
With the Premier League's PSR deadline looming, clubs in danger of breaching the financial regulations participating in a spending spree which saw a total of around £185 million spent. The deadline of 30th June represents the end of the financial year for Premier League clubs and is when they have to submit their accounts for the season just gone. The number of deals completed and (more importantly) the clubs involved, has led to fans raising eyebrows over the legitimacy of these deals.
If you want to learn more about what's happening, watch this!
In February 2023, Manchester City were charged with 115 breaches of the Premier League's rules, most of which were finance-related. Ever since this moment, it has felt like Premier League clubs have been more cautious with their spending (maybe with the exception of Chelsea and Nottingham Forest) in order to comply with PSR. PSR (Profit and Sustainability Rules) say that clubs cannot lose more than £105 million over a period of 3 years. These figures are different to UEFA's FFP rules which state that clubs cannot lose more than €60 million over a period of 3 years. However since Aleksander Ceferin became UEFA President, the governing body's stance on financial regulations have shifting to more of a squad cost ratio approach. This is way more appealing for clubs. In fact, in April 2024 Premier League clubs agreed in principle to introduce new financial rules to replace PSR and they would take more of a squad cost ratio approach starting from next season. These new rules would mean that clubs are limited to spending 85% of their revenues on transfers, wages and agent fees. You can see why the big clubs supported this notion...
BREAKING: Premier League clubs have agreed in principle to introduce new financial rules 💰
— Sky Sports Premier League (@SkySportsPL) April 11, 2024
They voted today to progress with new squad cost ratio rules to replace current Profitability and Sustainability Rules.pic.twitter.com/zsaDzHopdt
PSR really came to the forefront of Premier League clubs' decision making in the 2023/24 season with series of points deductions handed to Everton and Nottingham Forest during the season. Everton were handed an initial 10 point deduction in November 2023, which was appealed and eventually reduced to 6 points. This punishment was allocated to the Toffees because their account showed that they were over the £105 million threshold by £19.5 million. Nottingham Forest committed a similar offence which saw them handed a 4 point deduction in March. In April, Everton were docked a further 2 points for breaching financial regulations. The timing of the points deductions were not the best by the Premier League as it plunged these clubs and their players into uncertainty, especially as both were in the relegation battle.
These points deductions give us some insights into why some Premier League clubs were desperately doing business before the 30 June deadline came to pass. As mentioned before, Premier League spending has already reached over £185 million and most of that spending has been done to balance the books at certain clubs. Aston Villa recorded a loss of £119 million in May 2023 and Newcastle United reportedly still had a £50 million deficit by last Saturday. The claims by some fans of dodgy business started when the clubs in trouble were doing business with each other and to be honest, it did look like a case of "you scratch my back, I scratch yours". One of the more eye-catching deals was the "swap deal" between Chelsea and Aston Villa with Ian Maatsen and Omari Kellyman swapping sides. What was particularly intriguing was the fee paid by Chelsea for Kelleyman. They paid £19 million for a player who has only played 6 times for Aston Villa. I don't know about you but that just doesn't seem right. Another odd deal was Newcastle United selling Elliot Anderson to Nottingham Forest for £35 million. No way is he worth that much! Of course the fact that these are academy products is important because their sales will go down in the books as 100% profit.
The PSR clubs to the media & Premier League pic.twitter.com/eltzTtBGZm
— Spirit Blues 🥇🏆 (@spirit_blues) June 30, 2024
With PSR going out next season, it remains to be seen whether the Premier League can govern itself or whether a government-appointed independent regulator will be needed! Time will tell!
Talk soon!
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