The era of profitability and sustainability rules (PSR) in the Premier League will likely continue after another quarterly shareholders’ meeting ended without progress on adopting new measures of financial governance.
League executives have spent the past 18 months attempting to introduce two new ways of controlling spending in the competition with clubs reluctant to sign up, despite a number of sides falling foul of the current PSR system. There was more discussion over possible rule changes at a meeting in central London on Tuesday, but no vote. The likelihood is that the executive will call a vote in November, with sources arguing the issue needs to be resolved. If a vote is not called, or fails to pass, the chances of any new system being introduced by next season will fall away.
Sources suggest discussions at the meeting on Tuesday were focused on addressing issues raised by individual clubs, with perspectives often diverging according to a club’s position within the competition. One of the two proposals, known as the squad-cost ratio, would limit spending on wages to 85% of revenue. Nine of the league’s 20 clubs are already committed to such a system as a result of qualifying for Europe and are understood to value the flexibility PSR provides domestically.
The second proposal, known as anchoring, would limit spending for all clubs to a multiple of the revenues of the bottom-placed side. It has provoked further dissent, with Manchester United and Manchester City among the clubs to have voted against such plans in the past. The case for the rules was made again, with clubs in favour arguing anchoring could be key to maintaining the league’s competitive balance, seen as one of the selling points for the competition at home and abroad.
Another discussion regarding the new rules centred on the possible impact of the incoming independent football regulator. Alongside squad-cost ratio and anchoring, shareholders discussed possible policies around sustainability and the regulator’s expected requirement that clubs keep a cash reserve to mitigate against financial emergencies.
