FFP and PSR Explained for Normal People
FFP, PSR and the Premier League’s new spending rules explained without pretending football accounting is normal.
A billionaire buys a football club, offers to spend his own money and then somebody says he cannot because of PSR.
Meanwhile, another club signs three players for £200 million, sells an academy player and suddenly announces that its accounts are fine.
It sounds like football has invented its own branch of mathematics. It more or less has.
Quick Answer
FFP is the old name commonly used for UEFA’s financial rules, while PSR limited Premier League clubs to £105 million of adjusted losses across three years. PSR ended after the 2025/26 season and has been replaced by a squad-cost system. From 2026/27, Premier League clubs can generally spend 85% of football revenue and net player-sale profits on their squad, while clubs in UEFA competitions must also meet UEFA’s stricter 70% limit.
FFP, PSR and SCR Are Different Rules
| Name | Who uses it? | Basic purpose | Current position |
|---|---|---|---|
| FFP | UEFA | Stop clubs continually spending far beyond their football income | Replaced by UEFA Financial Sustainability Regulations, although everyone still says FFP |
| PSR | Premier League | Limit adjusted losses over three years | Applied until the end of 2025/26 |
| SCR and SSR | Premier League | Limit squad spending and test financial health | Introduced for 2026/27 |
| UEFA squad-cost rule | Clubs in UEFA competitions | Limit wages, transfers and agent costs to 70% of adjusted revenue | Fully active |
Under the old Premier League PSR system, a club could record up to £105 million in adjusted losses over three years.
“Adjusted” is doing serious work in that sentence. Spending on infrastructure, community projects, women’s football and youth development could be added back, meaning it did not count in the same way as ordinary football losses. The Premier League’s PSR explanation sets out these deductions.
PSR has now been replaced. The Premier League’s new Squad Cost Ratio system sets the main threshold at 85% of football-related revenue and net profit or loss from player sales.
The costs include player and head-coach wages, transfer-fee amortisation and agents’ fees. Premier League clubs competing in Europe must also comply with UEFA’s 70% squad-cost limit.
Why Does a £60 Million Player Cost £12 Million?
For accounting purposes, a transfer fee is normally spread across the player’s contract.
If a club buys a player for £60 million on a five-year contract, it records roughly £12 million of transfer cost each year. The cash instalments paid to the selling club can follow a completely different schedule.
If that player is sold after three years, £24 million remains in his accounting value. Selling him for £40 million creates an accounting profit of £16 million.
An academy player usually has little or no transfer value sitting in the accounts. Sell him for £40 million and almost the entire fee can appear as immediate profit.
This is why clubs suddenly become very interested in selling academy graduates near an accounting deadline. They have not discovered a moral objection to young players. They need the profit.
Can a Rich Owner Simply Pay for Everything?
No. Putting more money into the club does not automatically create more room under a squad-cost ratio.
The rules link football spending to revenue, transfer profits and permitted adjustments. Owners can fund stadiums and other long-term projects, but they cannot endlessly cover player wages and transfers while ignoring the limits.
This protects clubs from owners who lose interest after spending ridiculous amounts. It also gives an advantage to established clubs with enormous commercial revenue, because 70% of a massive business is still a massive amount of money.
What Happens When a Club Breaks the Rules?
Under PSR, independent commissions could impose fines, points deductions and other sporting sanctions. Everton and Nottingham Forest both received points deductions under that system.
Under the new Premier League rules, clubs initially have extra allowance above the 85% threshold. Spending in that area can trigger a levy and reduce their future allowance. Crossing the higher red threshold can lead to a points deduction.
The system is intended to catch problems during the season instead of deciding two years later that last year’s league table was technically wrong.
The TGK Take
The simple version is that football clubs can still spend heavily. They need enough genuine income or transfer profit to support it.
The rules reduce the chance of a club destroying itself because one owner became excited for three summers. They also protect the commercial advantage of clubs that became rich before the limits arrived.
When somebody says a club “has no money because of PSR,” they usually mean the club has money but cannot place all of the spending inside the permitted calculation.
Football remains perfectly capable of making £100 million sound both enormous and unavailable at the same time.
Sources
Information current as of 27 July 2026.
