The Premier League announced on Thursday that England's top-flight clubs have reached an agreement to test a new league-wide financial system in the 2024-25 season.
This alternative system will run concurrently with the existing Profitability and Sustainability Rules (PSR) on a "non-binding basis".
The decision to trial the Squad Cost Rules (SCR) and Top to Bottom Anchoring Rules (TBA) was made during the Premier League's Annual General Meeting held on Thursday. The meeting also saw the clubs vote in favor of retaining the Video Assistant Referees (VAR) system.
The purpose of the SCR is to limit a club's on-pitch spending to 85% of its revenue and net profit/loss on player sales. Meanwhile, the TBA is being tested with the aim of "protecting the competitive balance" within the league.
"This will enable the League and clubs to fully evaluate the system, including the operation of UEFA's equivalent new financial regulations, and to complete its consultation with all relevant stakeholders," the Premier League said.
"The overall system aims to improve and preserve clubs' financial sustainability and the competitive balance of the Premier League... and support clubs' competitiveness in UEFA club competitions."
The Premier League has decided to maintain the Profitability and Sustainability Rules (PSR) for the upcoming season, despite clubs previously agreeing in principle to replace them with squad cost ratio rules in April.
Under the current PSR guidelines set by the Premier League, "clubs are at risk of breaching PSR if they incur more than 105 million pounds ($134.10 million) in losses over three seasons, which amounts to 35 million pounds annually."
The decision to keep PSR in place for another season means that clubs will need to continue adhering to these financial regulations to avoid potential penalties or sanctions from the league.
"TBA is a League-level anchor linked to football costs, based on a multiple of the forecast lowest central distribution for that season," the league added.
"It is designed to be a pre-emptive measure to protect the competitive balance of the Premier League. This protection is intended not to have an impact unless significant revenue divergence of clubs occurs."
(With Reuters inputs)
