The price of a player
Clubs don’t buy players, they buy registrations — and the accounting of that purchase, spread over the contract, is what shapes every fee, every eight-year deal, and every points deduction.
PSR, FFP and squad-cost rules, explained
The Premier League’s £105m three-year loss limit and its add-backs, the 85% squad-cost ratio replacing it from 2026-27, UEFA’s football-earnings rule and 70% cap — the rulebook clubs are engineering their deals around, with every calculation worked through.
Start with the question that launched a thousand confused posts: why did Everton lose points for spending money? They didn’t. No English rule has ever capped what a club may spend on transfers. What the Premier League’s profitability and sustainability rules policed — from 2013 until their retirement at the end of 2025-26 — was losing money: adjusted losses of more than £105m over a rolling three-year period. Spending is upstream of losing, but they are not the same thing, and the gap between them is where every deduction argument actually happens.
Two mechanisms do the real work. First the add-backs: money spent on the academy, women’s football, community programmes and infrastructure depreciation is subtracted before the loss is measured, so the rules deliberately don’t punish investment in those things — a club can lose far more than £105m in raw accounting terms and comply. Second the sliding threshold: £35m of allowance per Premier League season in the window and £13m per Championship season, which is why a recently promoted club like Nottingham Forest answered to £61m, not £105m, and a relegated one like Leicester to £83m. Pick a case below and walk its arithmetic.
The deduction arithmetic, case by case
the vertical line is this club’s thresholdgreen — inside the rulesred — the excess that gets sanctioned
Everton I: £124.5m against £105m — £19.5m over. Sanction: 10 points, reduced to 6 on appeal.
The case that taught the public PSR exists. An independent commission assessed Everton’s adjusted loss at £124.5m — £19.5m over — and deducted ten points in November 2023, the largest sporting sanction in Premier League history to that date; the appeal board found legal errors and substituted six. The answer to “why did Everton lose points for spending money”: they didn’t — they lost points for losing £19.5m more than the rules allow, after every permitted deduction.
What replaced it: squad-cost ratios
The loss-limit era is ending because it measured the wrong distance from disaster — a well-funded owner can absorb losses indefinitely, and a poorly funded one can fail inside the limits. The replacement logic caps the squad itself: wages + transfer-fee amortization + agent fees, as a share of football revenue plus net profit on player sales. UEFA got there first — 90% in 2023-24, 80% in 2024-25, 70% from 2025-26, with the first fully-phased enforcement in June 2026 catching nine clubs. The Premier League voted its own version through on 21 November 2025: an 85% ceiling from 2026-27, with PSR retired the same day its last assessment cycle ended. The same meeting rejected “anchoring” — a hard cap tied to the bottom club’s TV money — so English football chose a ratio, not a salary cap.
Notice what sits in the numerator and the denominator. Amortization is squad cost, so the five-year cap now has teeth twice over; agent fees are squad cost, so commissions burn ratio; and profit on player sales lifts the denominator, so the academy-sale machine from the accounting section helps a club’s ratio exactly as it helped its PSR number. The instruments change; the incentives rhyme.
The Premier League ladder, from 2026-27
- to 85% — compliant
- 85–115% — financial levies, scaled to the overshoot
- above 115% — a fixed 6-point deduction, plus 1 point per £6.5m over
e.g. £500m squad cost ÷ (£350m revenue + £50m sale profit) = 125% → 12 points (6 fixed + 1 per £6.5m over the 115% line)
Alongside the ratio, new sustainability tests: £12.5m of working-capital headroom, an £85m liquidity stress test, and a positive-equity requirement phasing in from 2026-27.
Every rulebook, in one place
Profitability & sustainability rules (PSR)
Premier League2013 – 2025-26 · £105m adjusted loss over 3 rolling years
The regime behind every Premier League deduction so far: cumulative pre-tax losses over a rolling three-year period, less add-backs for youth development, women’s football, community work and infrastructure depreciation, capped at £105m — £35m per Premier League season in the window, £13m per Championship season. Retired after 2025-26 in favour of the squad-cost ratio.
Squad cost ratio (SCR)
Premier Leaguefrom 2026-27 · 85% of revenue + net player-sale profit
PSR’s replacement, voted through on 21 November 2025 and live from 2026-27: player and head-coach wages, transfer-fee amortization and agents’ fees may not exceed 85% of football revenue plus net profit on player sales. Between 85% and 115% the sanction is financial levies; above 115% it is a fixed 6-point deduction plus one further point per £6.5m over. The same vote rejected “anchoring” — a hard cap tied to the bottom club’s TV money — and added sustainability tests for liquidity and positive equity.
Financial fair play (break-even rule)
UEFA2011 – 2022 · €30m acceptable deviation over 3 years (final form)
The original continental regime: clubs in European competition had to roughly break even over rolling three-year windows, with an acceptable deviation covered by owner equity. It produced the 2014 settlements with Manchester City and PSG, Milan’s 2019 exclusion, and the City case CAS mostly time-barred in 2020 — before being replaced by the financial sustainability rules in 2022.
Football earnings rule
UEFAfrom 2022 · €60m acceptable deviation over 3 years
Break-even’s successor, fully assessed since 2024-25: football earnings over a rolling three-year period may deviate by at most €60m (€5m base, the rest requiring equity cover). Its enforcement rounds have produced settlement agreements with Chelsea, Aston Villa, Barcelona, Juventus and Newcastle, with unconditional fines and European squad-registration restrictions.
Squad cost rule
UEFAfrom 2023-24 · 70% of adjusted revenue (phased 90 → 80 → 70)
UEFA’s wage-and-transfer cost cap for clubs in European competition: wages, amortization and agent fees for players and the head coach against revenue plus net player-trading profit, phased in at 90% (2023-24), 80% (2024-25) and 70% from 2025-26. The first full-force monitoring round, in June 2026, found nine clubs over the line.
Profitability & sustainability (EFL)
EFLfrom 2016 · £39m loss over 3 years (Championship)
The EFL’s version of PSR: £13m of allowable loss per Championship season (£35m per Premier League season for the recently relegated, making mixed windows worth up to £83m). It produced the Derby amortization case, Sheffield Wednesday’s stadium-sale deduction, Reading’s deductions — and, via a jurisdiction handover, Leicester’s.
Associated party transaction rules
Premier Leaguefrom 2021 · fair market value
Rules requiring related-party deals — a sponsorship from a company linked to the owner, a loan from a shareholder — to be priced at fair market value, so revenue cannot be conjured to pass the spending rules. Manchester City’s legal challenge saw the pre-2024 version declared void, the rules re-voted, and the dispute settled in September 2025 with the current rules accepted as binding.
Domestic accounting charges
National associationsvarious · truthful accounts
The catch-all for cases about the books themselves rather than a spending limit: Italy’s plusvalenze prosecutions over artificially inflated swap-deal valuations — which cost Juventus ten points in 2023 — and England’s charges over accounting policies and disclosure.
Insolvency deductions
EFL / Premier Leaguefrom 2004 · automatic points penalty
Not a spending rule but the backstop when spending fails: entering administration triggers an automatic deduction — 12 points in the EFL, 9 in the Premier League. Portsmouth, Wigan, Derby and Sheffield Wednesday all took it. Often confused with PSR deductions; the trigger is insolvency, not a loss limit.
One habit keeps every regime honest to read about: check which body is charging, under which rule, for which seasons. “FFP” in a headline can mean UEFA’s retired break-even rule, its current earnings rule, its 70% ratio, the Premier League’s retired PSR, its incoming 85% ratio, or the EFL’s £39m version — six different rulebooks with different math. The consequences of mixing them up populate the charge sheet.
Each case, in words
- Everton I
- Counted loss £124.5m against a threshold of £105m — £19.5m over the limit. 10 points, reduced to 6 on appeal. The case that taught the public PSR exists. An independent commission assessed Everton’s adjusted loss at £124.5m — £19.5m over — and deducted ten points in November 2023, the largest sporting sanction in Premier League history to that date; the appeal board found legal errors and substituted six. The answer to “why did Everton lose points for spending money”: they didn’t — they lost points for losing £19.5m more than the rules allow, after every permitted deduction.
- Everton II
- Counted loss £121.6m against a threshold of £105m — £16.6m over the limit. 2 points, with mitigation for the overlapping seasons. The rolling window’s double bite: two of the three loss-making seasons in this assessment were the same ones already punished, and the commission gave two points of mitigation for exactly that overlap. Two more points in April 2024 — an appeal was lodged, then withdrawn — making eight for the season, and Everton still stayed up.
- Nottingham Forest
- Counted loss £95.5m against a threshold of £61m — £34.5m over the limit. 4 points, appeal dismissed. The promoted club’s version of the rule: two of Forest’s three assessment years were Championship seasons, so their ceiling was £35m + £13m + £13m = £61m, and they were £34.5m over it. Four points in March 2024, appeal dismissed in May. The case that showed the limit is not one number but a formula — and that keeping a promotion-winning squad together has a price the rules can count.
- Leicester
- Counted loss £103.8m against a threshold of £83m — £20.8m over the limit. 6 points, upheld on appeal. The jurisdiction saga, concluded. Leicester beat the original 2024 PSR charge on a drafting technicality — their accounting year ended after relegation, so the Premier League commission had no reach — and the league closed the loophole. But the 2023-24 Championship season breached the EFL’s £83m mixed-window threshold by £20.8m, jurisdiction passed back on promotion, and in February 2026 a commission deducted six points, applied to their 2025-26 Championship campaign and upheld on appeal that April. Escaping on procedure, twice relegated meanwhile, and sanctioned anyway.
- A compliant club
- Counted loss £90m against a threshold of £105m — compliant. no breach — £150m of pre-tax losses, legally.