PSR
Summer Crisis

What PSR stands for

Profitability and Sustainability Rules are the Premier League’s domestic financial fair play framework, introduced in 2013 and in force until 2026/27 when they will be replaced by the Squad Cost Ratio (SCR) system. They sit alongside UEFA’s separate Financial Sustainability Regulations for clubs in European competition.

The three-year rolling window

PSR measures a club’s adjusted losses over a rolling three-year period. Clubs can lose up to £105m over three years (£35m/year) if losses above £15m are covered by owner equity injections. Promoted clubs face a lower limit because two of their three accounting years were spent in the Championship, where the cap is only £13m/year.

Why it creates economic decisions

PSR forces clubs to make trade-offs between sporting ambition and financial compliance. It creates incentives for regulatory arbitrage (exploiting gaps between the rule’s letter and intent), moral hazard (rules that incentivise the behaviour they were designed to prevent), and short-termism (optimising one accounting year at the expense of adjacent ones). Every decision in this game exists because of these tensions.

What counts — and what doesn’t

Costs excluded from PSR include youth development, women’s football, community programmes and stadium/infrastructure depreciation. This exclusion is why academy player sales generate “pure profit” — no preceding transfer fee reduces the proceeds. Transfer fees are amortised over contract length (capped at 5 years), not paid upfront in accounting terms.

Clubs that have been sanctioned

The Portside City case — why enforcement matters

Portside City face 134 charges covering alleged conduct from 2009 to 2023. The core allegation: sponsorship revenues from UAE-linked companies were inflated beyond arm’s length values, effectively disguising owner equity as commercial income — the same transfer pricing mechanism this game explores in Decision 3. A separate UEFA investigation found violations, imposed a two-year European ban in 2020, but the Court of Arbitration for Sport overturned it on procedural grounds. The Premier League case is ongoing.

The economics of the case extend beyond the charges themselves. Deterrence requires timely punishment: if a club benefits from alleged rule-breaking for a decade and faces sanction only years later, rational agents discount the expected penalty to near zero. Other clubs observe this and update their own compliance calculations accordingly. The Portside case did not just affect one club — it changed the incentive structure for the entire league. Every decision in this game exists partly in the shadow of that precedent.

What’s changing

From 2026/27, PSR is replaced by the Squad Cost Ratio (SCR): clubs can spend no more than 70% of revenue on wages, transfer amortisation and agent fees. This shifts from a loss-based test to a revenue-linked spending cap — theoretically making compliance more proportional to club size.