⚽ PSR is Dead. We are in the SCR era now!

The Saudi Series has taken me to some weird and wonderful places.

The weirdest place may be learning about the mechanics behind LIV Golf. In a recent filing made by LIV Golf Investments, they declared that they had spent $4.9bn on the tournament in total 😮‍💨

$4.9bn on a tournament that has barely made any money to date.

In no other world would a tournament with that P/L still exist, but when things are bankrolled by the Saudi PIF trust me anything is possible.

The Saudi Series Episode 2 is centred on the insanity of LIV Golf and it will be with you in a few hours. The thumbnail can be seen below

Before then, we break down a big change in the finances of the Premier League…

The Premier League has approved one of the most significant reforms to the leagues finances since the introduction of PSR twelve years ago.

From the 2026/27 season, the league will operate under an entirely new cost-control system known as the Squad Cost Ratio (SCR).

Anchoring, the closest we ever got to a soft salary cap was rejected firmly, and a new set of sustainability rules were passed almost unanimously.

This reform will lead to an important pyschological shift in how Premier League clubs manage their finances. A mental shift that I’ve spoken about many times before in previous editions of this newsletter.

Previously, PSR made clubs assess how much money they were losing across the previous three years. SCR makes clubs assess how efficiently they are spending this current season.

This will shift clubs from a “creative accounting” mindset to a year-on-year financially disciplined mindset. A mindset I am a big fan of.

A breakdown as to what SCR actually is:

In short, SCR caps what a club can spend on its squad. First, one must calculate a clubs total income. To do that you pool together:

• Broadcast + Matchday + Commercial revenue

• Prize money

• The three-year average profit/loss from player sales

This number becomes the club’s personalised spending base. Then, each club can spend up to 85% of this number on:

• Player wages

• Head coach wages

• Agent fees

• Transfer amortisation

Thankfully, youth and women’s teams don’t count. Sorry Chelsea!

Spending above 85% is allowed but its penalised:

• From 2027/28 clubs above 85% are fined AND

• Their spending ceiling the following year shrinks

Clubs that above 115% face an imminent punishment:

• Minimum six-point deduction

• An extra point per £6.5m overspent

There’s a lot in there, but I’ve broken it down as simply as I could.

These are encouraging changes.

It pushes teams to grow reliable revenue streams, keep wage bills under control and to avoid expensive managerial churn. The clubs that think long-term, and spend in line with what they actually earn will keep their flexibility and avoid sanctions.

At the same time, this model discourages the habits that have defined the Premier League in recent years. Overspending on wages and agents, relying on creative accounting and hoping one big sale of an academy prospect will solve everything financially. Those behaviours now put clubs at direct risk.

The Athletic did some interesting analysis. Based on the most recent available financials the clubs that are currently at risk are:

• Aston Villa

• Nottingham Forest

• Leeds United

• Fulham

• Bournemouth

All of them are currently above 85% based on the numbers in their last financial accounts. Good thing being, they have time to address their positions.

Interestingly, alongside SCR, the league approved, wait for it… SSR(!) a set of rules designed to stop clubs from flirting with insolvency. Clubs now must show they:

• Have at least £12.5m monthly working capital.

• Can survive an £85m “relegation shock”.

• Hold positive equity (using market-value player valuations)

These measures seem stringent but they’re all hugely beneficial.

Sustainability is the most boring topic to many but it’s critical to the future of our beautiful game. This set of changes is the Premier League telling clubs that sustainability is not an option, it must be at the centre of your commercial strategy.

I am in favour.

While the Premier League works on cost discipline, Spain is celebrating a different type of financial milestone. Last week, La Liga agreed a new €1.05bn per-season domestic broadcast rights deal with Telefónica and DAZN. The first time Spain has crossed the €1bn per season threshold.

The deal runs for 5 years from 2027/28 and is worth €5.25B across the cycle, a 6% increase on the current agreement.

This is a good deal for Spanish football and it matters for three reasons”

1. It’s an increase, and increases are rare right now

In Europe, broadcast rights are stagnating or falling (Ligue 1 being the prime example).

LaLiga growing its domestic is significant and not to be ignored.

2. They kept the same broadcasters

DAZN and Telefónica remain on board for another five-year cycle, sharing five matches each per matchday.

I’ve written about the consistency of broadcast partners before. It’s a signal of strength when the incumbents express a desire to re-enter the rights conversations. They still see value, the league sees value and fans do not have to migrate to different platforms. Everyone wins.

3. Piracy was really important in this deal

Javier Tebas has made anti-piracy a central pillar of La Liga’s commercial strategy in recent years.

Spain has historically been one of Europe’s most pirated markets, and La Liga’s aggressive crackdown has increased viewing figures for their broadcasters. The press releases speak to that being a factor in the strength of this deal.

Sustainability, piracy and broadcast rights are all things I covered in one of my best videos of all time:

Don’t forget TLP Members get access to so much more. Click HERE to get a taste.

See you next week.