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- Premier League clubs can make allowable losses of up to £5 million per season, averaged over three seasons. Clubs can increase the £5 million figure to £35 million per year with owner investment, averaging over three seasons. Clubs can spread out transfer costs over a maximum of 5 years.
www.givemesport.com › premier-league-psr-tracker-every-clubs-ffp-statusPremier League PSR tracker: Every club's FFP status - GiveMeSport
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Mar 18, 2024 · Premier League clubs can make allowable losses of up to £5 million per season, averaged over three seasons. Clubs can increase the £5 million figure to £35 million per year with owner...
- Graeme Bell
- Evergeen Football Writer
Feb 2, 2024 · Clubs can only lose £15m of their own money across those three years. Anything above that, up to the £105m barrier, must be guaranteed by their owners buying up shares (known as 'secure...
- Overview
- What are the Premier League's Profit and Sustainability Rules (PSR)?
- What counts towards PSR and what doesn't?
- Are clubs on red alert after January charges?
- What has stopped teams from spending more?
- How UEFA's rules tighten Premier League clubs' finances even more...
- Are the Premier League going to change their rules too?
- Why Chelsea's big spending has finally caught up...
- When will Ratcliffe's investment boost Man Utd's coffers?
It's been more bargain basement than big spending for Premier League clubs this January - what has made this transfer window one of the thriftiest for years?
The Covid-hit 2020/21 season aside, the English top flight spent less than £100m combined for the first time since 2012 across the winter window, with 13 teams refusing to open their wallets altogether.
This isn't what we're used to. Even ignoring Chelsea's shopping spree 12 months ago, in the pre-Boehly era the 20 Premier League clubs spent £322.9m between them in January 2022 - over £230m more than this window.
Forget taking things one game at a time, Profit and Sustainability Rules are the new buzz words in the Premier League, because they've played a major part in why so many managers have been able to mute their WhatsApps over the last four weeks.
So what is the deal with PSR - or the catch-all term you may be more familiar with, FFP - and will it change things forever now?
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Sky Sports chief news reporter Kaveh Solhekol explains the Premier League's process for Profit and Sustainability - when penalties may be handed out and why the process is being fast-tracked this season
In the simplest terms, when every Premier League team tots up their annual accounts, they can have made a loss no greater than £105m across the previous three seasons.
Sounds straightforward, but do not worry - this would be a very short article if it were that easy. There are a fair few caveats and sub-clauses to get through before any club can find itself in the clear, or not...
For a start, not all losses are created equal.
Clubs can only lose £15m of their own money across those three years. So that's no more than £15m extra on outgoings like transfer fees, player wages and, in a lot of clubs' cases, paying off former managers compared to their income from TV payments, season tickets, selling players and so on.
Talking of expensive tastes, let's start off with transfer fees. Premier League clubs spent almost £2.4bn in the 2023 summer transfer window, an average of £120m each.
That has now left them with little wriggle room in January - as we've seen with the small amount spent - though even those huge sums from last summer aren't going on their balance sheets all at once.
Using a process called amortisation, clubs are able to treat players as 'assets' in a financial sense rather than one big outgoing - even if they do pay the whole cost up front.
If you sign a £50m player on a five-year contract, they are 'worth' £50m at the start and £0 at the end in your accounts, so can be put down as a £10m loss every year.
That's exactly why we have seen Chelsea and other clubs signing players on contracts as long as eight years, and why Premier League clubs voted in December to limit spreading those transfer fees over a maximum of five years from now on.
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There is clearly some trepidation around the Premier League right now.
Everton's points deduction was the first serious PSR-related punishment handed down by the Premier League, and the league announced more charges against the Toffees, and Nottingham Forest, midway through January.
There has been criticism of the division's approach to finances in the past, but the actions of the last few months have made it clear clubs must sit up and take note.
This season, for the first time, the Premier League has picked up the pace with which it deals with potential breaches of PSR regulations, and has required teams to hand over their yearly accounts by December 31 every year.
Forest and Everton both told them they had been in breach of the regulations when they submitted their most recent accounts, ending at the conclusion of the 2022/23 season - meaning they had lost more than £105m across the previous three seasons.
On January 15, a Premier League statement confirmed the league was conducting further investigations, and said it would be appointing two separate independent commissions to decide what punishment to hand down to each club.
To put it simply, these PSR rules have put big clubs under pressure they haven't felt for a while.
As mentioned before, they can no longer claim any exemptions because of Covid - as the three-season cycle we are in no longer includes the 2020/21 season.
For the likes of Newcastle, the frugal spending under the Mike Ashley era is also now a distant memory. The three-year cycle the Magpies are now in only includes transfer windows since the Saudi PIF takeover, and losses have unsurprisingly begun to rack up since then.
Look at Arsenal, too. Yes, they have been slow and steady in their spending - but when you put down £170m on Delcan Rice and Kai Havertz alone in the summer, that's a big outlay for any club. And they, like any club playing in Europe, have new UEFA rules to adhere to as well - keep reading for more detail on that.
As promised, here's another set of rules on clubs' financial outgoings, for any Premier League sides who do, or hope to, play in Europe.
UEFA are currently implementing new rules, and have dropped the 'Financial Fair Play' moniker which they previously used. The heads of European football have said their new rules are not designed to create a level playing field, but rather force clubs to live within their means.
In the same style as the Premier League, clubs are permitted to make three-year losses of €60m (£51.8m), with €55m (£21.5m) of that through 'secure funding' from owners.
But for anyone feeling the pinch from those lower numbers, there's also the added cushion of an additional €30m (£25.9m) loss allowed for clubs who UEFA deems in good financial standing, for a total of €90m (£77.7m) over the previous three years.
That's still lower than the Premier League - but it is an improvement on the €30m three-season loss UEFA would permit before this season.
There's also a catch. Starting this season and tightening over the next two years, clubs will be increasingly bound by 'squad cost' limits - in essence, the amount they spend on wages, transfer fees (in amortisation form) and compensation as a proportion of their income.
Well funny you should ask, actually. Premier League chief Richard Masters said this week the competition is looking at whether it might move to a system more in tune with the European set-up, and specifically in line with the squad cost ratio.
Masters told a Parliamentary Select Committee that given up to 35 per cent of the league's clubs play continental football every season, and already have to abide by those UEFA laws, there would be considerations made as to whether the wider league might follow suit.
That would reflect what happened when the Premier League's original PSR regulations were drawn up, a year after UEFA's first FFP rules were introduced.
"We have some proposals out for consultation with our [Premier League] clubs about moving and aligning more with the UEFA system," he said.
"UEFA have spent two years changing its financial regulations away from FFP to the squad cost ratio.
"Over time we have historically aligned with UEFA, because seven or eight of our clubs play in European competition. We need to consider whether that is an appropriate move for us, how we do that and when."
It's worth noting Chelsea are currently being investigated by the Premier League and FA over payments received during Roman Abramovich's ownership - but let's look at the current state of play.
In terms of the financial situation surrounding the new American bosses, outgoings play a big part in balancing the books.
Image: Enzo Fernandez became - and remains - the Premier League's most expensive player when he joined Chelsea for £105m from Benfica last January
The Blues have recouped almost £300m in player sales since the American's takeover, and unlike the way amortisation works on new signings, they can bank all of the money they make on outgoings at once in their accounts.
Many of the sales came from players brought through the academy - Mason Mount, Billy Gilmour, Ruben Loftus-Cheek - and can be banked as 'pure profit'.
For players like Havertz, their sale price is offset against the amount their 'value' has already decreased - in his case 60 per cent of what Chelsea paid for him, the proportion of his contract he had already run down - and so the income from those players does not tally up quite as nicely.
For any Manchester United fans who have made it this far, here's some reward for your patience. Let's go back to that £90m secure funding, which can balloon the losses allowed by Premier League sides.
Under the Glazers, there has perhaps unsurprisingly been no sign of that over the last three years, meaning the club could only lose an average of £5m per year.
However, new investor Sir Jim has already committed a decent little sum of £245m to be earmarked on improving the state of the club.
His investment was not ratified in time to buy up any equity which would have loosened the purse strings at Old Trafford, but he has said he expects to be given the green light in mid-February - which could make for an interesting, and perhaps far busier, summer in the north west.
Feb 1, 2023 · The UEFA FFP regulations are designed to limit excessive spending and there are also Premier League rules which put a cap on the losses a club can suffer over a three-year period. Large fines...
Jan 13, 2024 · So if the reality is that the real value of allowing Premier League clubs losses up to £105m (over any three year period) has now more than halved (As in, you would need £218m now to equal the...
Nov 12, 2021 · Study Reveals How Much Each Premier League Club Can Spend Under FFP Rules. Newcastle United's takeover makes them a dangerous player in the transfer market but it's another Premier...
Jan 3, 2022 · By Mark White. published 3 January 2022. Financial Fair Play limits the amount of money that every club can spend in accordance with their income – but it still gives Tottenham £400m to play ...
