Profit and Sustainability Rules: The Premier League’s Balancing Act

Money makes the football world go round, from record transfer fees to massive wages and state-of-the-art stadiums. But if the spending is not checked, the gap between the big and small clubs would only grow. This is why regulators in football step in and have devised rules and guidelines to keep spending, commonly known as Financial Fair Play rules which has been a buzzword in football for over a decade.

The Premier League in England has it’s own version: known as Profitability and Sustainability Rules (PSR) designed to limit losses, encourage smart spending and set clear boundaries for clubs. Think of it as the Premier League’s financial referee – clubs can only lose so much money before they get punished.

So what exactly are these rules, how do they compare to other leagues in the world, and how some clubs have found loopholes to bend them? Lets take a closer look.

What Exactly Are PSR Rules and how to they compare to similar regualtions?

At their core, PSR rules are meant to make sure clubs don’t spend recklessly in the pursuit ofshort-term glory. The headline number is this: clubs can only lose £105 million over a rolling three-year period, i.e any three most recent financial years. In this case 2022-23, 2023-24, and 2024-25. Anything beyond that and the league can step in with punishments.

But it’s not quite as simple as adding up your transfer spending and ticket revenue. The rules make exceptions for “good” investments — spending on things like stadium development, training facilities, youth academies, and women’s football doesn’t count toward the £105m loss limit.

On the flip side, wages, agent fees, and transfer fees all hit the books directly.

The result? Owners and executives spend as much time juggling the numbers as they do scouting the next superstar. And in 2025, with spending only increasing across the league, more clubs are brushing right up against the limits.

The Premier League isn’t the only league trying to keep finances in check, but the approaches differ.

- In La Liga, the rules are famously strict. Clubs can’t register new signings unless they can prove they have the space in their wage-to-revenue ratio. That’s why Barcelona, despite their huge global brand, had to wave goodbye to Messi and scramble to free up wages before unveiling new arrivals.

- UEFA’s FFP rules apply to the top Premier League teams which qualify for European competitions. It requires all clubs competing in European Competitions (Champions League, Europa League, and Conference League) to limit their losses to £60 million over a three year period (compared to 105 million recommended by PSR.

There is an additional requirement to comply with the Financial Sustainability Rules which require your Squad Cost Ratio to be 70% - meaning you can only spend 70% of your revenue on putting the team on the pitch (being amortized transfer fees, wages, agent fees, etc.)

While the rules remain consistent, some clubs play chess while others play catch up

The Good, The Bad & The Ugly : Premier League Edition

The Good — Clubs Playing It Smart

Some clubs have actually managed to thrive under PSR by being clever.

- Brighton have made an art form out of buying low, selling high, and reinvesting in youth. Every £80m sale of an academy gem or undervalued signing is pure profit on the books, giving them room to grow without risk.

- Arsenal are another example. While they’ve spent big, they’ve kept revenues high enough thanks to Champions League football and commercial growth — that their net position remains healthy. They’re pushing the rules, but they aren’t breaking them.

- Liverpool, despite a historic summer of spending in 2025, are still expected to stay within PSR limits. The difference is scale: their record revenues from global commercial deals, Champions League qualification, and the sales of fringe players give them a cushion.

- Clubs investing heavily in infrastructure — like Tottenham’s stadium project or Aston Villa’s training ground upgrades — also benefit from PSR exemptions. These don’t count toward losses, meaning they can build for the future without worrying about sanctions.

In short, the “good” clubs see PSR not as a barrier but as a framework to build sustainably — or, in Liverpool’s case, a system where strong revenues give them freedom to still flex in the transfer market.

The Bad — Teams Getting Punished

- Everton are the poster child here. They’ve been docked points in consecutive seasons for breaches — overspending by tens of millions. For a club already hovering around the relegation zone, every point lost was agony for fans.

- Nottingham Forest suffered a similar fate. Their four-point deduction for breaking the limits in their first seasons back in the top flight dragged them into the relegation scrap. Their appeal failed, and the punishment stuck.

- Leicester City, even after relegation, couldn’t escape. The Foxes have faced charges linked to previous seasons, and fresh PSR cases are ongoing.

For these clubs, PSR has been less about sustainability and more about survival, with off-pitch battles spilling directly onto the league table.

The Ugly — Creative Loopholes

- Chelsea are the standout example. They famously sold two hotels and even their women’s team to related companies owned by the same group. Perfectly legal under PSR, but widely seen as bending the spirit of the rules.

- Manchester United are another example who have a Subsidiary called Red Football Group registered in the UK. They have recently been acquired by Sir Jim Ratcliffe’s Ineos Group and have used equity injections and group charges from the acquisition deal through Red Football Group to paint a rosier picture of the club’s financial structure than actual.

Player swap deals are another common tactic. Two clubs exchange players, each recording a big incoming transfer fee on the books. That counts as “profit,” even if little real money changes hands.

-Academy sales are also a loophole in plain sight. Selling a homegrown player counts as 100% profit, making it an easy way to balance the books before splurging elsewhere.

None of this technically breaks the rules, but it highlights why fans get frustrated. Some clubs are punished harshly, while others seem to dance around the regulations with creative accounting.

Winners, Losers & The Fan View

The winners are often the clubs with deep academies and clever accounting teams. Selling a youth player for big money can fund a marquee signing without breaking the rules. Others, like Chelsea, have leaned heavily on loopholes to balance their books while still splashing cash.

The losers? Clubs without the same financial muscle or creative accountants. Everton and Forest found themselves punished despite relatively modest ambitions compared to the elite. Fans of these clubs feel like the rules hit the little guys harder, while the giants wriggle free.

For supporters across the league, PSR can feel like an invisible hand shaping the transfer market.

That dream signing? Blocked by the balance sheet.

That exciting summer rebuild? Delayed by the accountants.

It’s football, but with spreadsheets in the starring role