An overview of each Premier League club’s spending power under revenue and stability rules and how this affects their transfer plans. We all know about Financial Fair Play, but now is the time to understand the benefits and sustainability rules of the Premier League. FFP is replaced by PSR. Put simply, this means that no Premier League team has spent more than £105m over the past three seasons when they prepare their accounts.
The club will lose just £15m over three years. Anything above that, up to £105m, must be guaranteed (known as a ‘guarantee’) by the owner who buys the shares, meaning the owner is effectively funding the club.
In this case, the Premier League requires clubs to explain their financial plans for the next two seasons. There are some costs that are not included in the PSR. These are not set in stone but are generally accepted as costs incurred for the “public benefit of football”, such as the cost of the club’s infrastructure, the cost of its women’s team and the cost of running an academy.
Additional allowances have also been prepared for unexpected drops in revenue due to COVID-19. Costs for 2019/20 and 2020/21 have been averaged and clubs have been allowed to avoid any reduction in income directly related to the pandemic.
This is true even if the current season is outside the three-year accounting period. The data used in this article uses average Covid costs and income losses to put the numbers into context. Clearly, we need to look at how transfer fees work in relation to PSR. An accounting process called depreciation allows clubs to treat players financially as “assets” and spread transfer fees over the life of a player’s contract rather than a large expense, even if all fees are paid up front.
For example, if a club signs a player for £50m on a five-year contract, he will initially have £50m and end up with £0 in the club account, so he is registered as a player . £10m per player. PSR year. With the January transfer window now closed, GIVEMESPORT has looked at each Premier League club’s chances of winning the summer title based on their PSR situation and subsequent transfer plans.
Football finance expert Dan Plumlee provided insight into PSR, while transfer insider Dean Jones detailed the club’s intentions for the summer transfer window.
