This is a pretty good explanation of the new SCR, or squad cost ratio rules coming into effect for next season.
The clubs voted to introduce the squad cost ratio but not top to bottom anchoring at a meeting in London on Friday.
www.nytimes.com
What are red and green thresholds and the other new terms we’ll be hearing about?
That 85 per cent limit has another name, introduced in the new rules soon to inhabit the Premier League’s handbook: The ‘Green Threshold’.
At the beginning of each season, clubs and the Premier League will agree on estimated football revenues, from which their 85 per cent, Green Threshold spending limit will be derived.
A further limit (the ‘Red Threshold’) will be set at up to 30 per cent higher, so for each club in 2026-27 their Red Threshold will be 115 per cent. Clubs will be able to spend above their Green Threshold without incurring a sporting sanction, provided they do not exceed their Red Threshold. If they exceed the latter, a sporting punishment will follow.
If that sounds too simple, then don’t worry, they found a way to make it more complex.
If a club complies with their Green Threshold and returns a squad cost ratio of 85 per cent or lower, their Red Threshold will remain at 115 per cent. However, if a club exceeds the Green Threshold, they will see their Red Threshold reduced by the size of the excess. For example, if a club records a 90 per cent ratio in 2026-27, their 2027-28 Red Threshold would be 110 per cent.
The Premier League has termed this a Feedback Loop, and it is one which updates year-on-year. Ultimately, if a club consistently goes over their Green Threshold but does not exceed their Red Threshold, the latter will move ever closer to the 85 per cent mark. On the flipside, if a club exceeds the Green Threshold in one season but is later compliant, they have scope to build their Red Threshold back up to that 115 per cent maximum. In each season they are compliant, they increase their Red Threshold by 10 per cent, up to the 30 per cent overall maximum.
As an example, say a club records a 100 per cent SCR figure in 2026-27, or 15 per cent over their Green Threshold. That reduces their 2027-28 Red Threshold to 100 per cent.
In 2027-28, they record an SCR figure below 85 per cent, meaning they are compliant. As a result, their 2028-29 Red Threshold would be 110 per cent and further compliance that season would raise it to the 115 per cent maximum for 2029-30.
In explaining why clubs will be allowed to exceed the 85 per cent limit without sporting sanction, the Premier League said it “allows for clubs to invest ahead of revenue and reasonable variance or genuine sporting underperformance throughout the season”.
In essence, clubs not in Europe have been afforded extra leeway for longer-term spending on squads, albeit up to a reducing limit. No such differing thresholds are in place under UEFA’s PSR regime.
