The Premier League has introduced a new financial system for the 2026/27 season, replacing the Profitability and Sustainability Rules with the Squad Cost Ratio and a separate set of financial-health checks.
The change represents more than a new acronym. PSR judged whether clubs were losing too much money, while SCR focuses directly on how much they spend on their playing squad compared with the football income they generate.
What Does SCR Mean?
SCR stands for Squad Cost Ratio.
In simple terms, it measures how much of a club’s football-related income is being spent on the first-team squad. Under the Premier League’s new rules, clubs are expected to keep their squad costs within 85 per cent of their relevant revenue and net profit or loss from player sales.
The basic calculation can be expressed as:
Squad costs ÷ football-related revenue and net player-trading result
If a club generates £400 million of relevant income, its standard 85 per cent spending threshold would be £340 million.
Unlike a fixed spending cap, the amount available to each club will be different. A club with higher broadcasting, matchday and commercial income can spend more in cash terms while remaining within the same percentage limit.
What Counts as a Squad Cost?
SCR concentrates on expenditure directly connected to first-team performance.
The calculation includes player wages, head-coach wages, agents’ fees and transfer-fee amortisation or impairment. It therefore looks beyond the amount a club spends during a single transfer window and considers the annual cost of maintaining the squad.
Transfer amortisation is particularly important. When a player is signed, the transfer fee is normally divided across the length of the contract for accounting purposes, subject to the applicable five-year limit.
If a player is bought for £50 million and signs a five-year contract, the annual amortisation charge would normally be £10 million. That £10 million, together with the player’s wages and associated costs, would contribute to the club’s SCR calculation each year.
This means the headline cost of a transfer is not necessarily the same as its…
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