Premier League Set to Decide on PSR Alternative

An important ruling on whether to scrap the Premier League's controversial profit and sustainability rules and adopt an "alternative system" is said to be approaching, according to the league's top executive Richard Masters.

Existing rules, introduced in 2015-16 to curb excessive club spending, allow losses of £105m over a three-season assessment period.

However, they have been criticised by several top-flight teams for restricting their investment potential.

Sources suggest that a ruling regarding modifications is expected to occur at a meeting in November.

In February clubs chose to continue with PSR for the current season.

However a squad cost ratio (SCR) system of financial control was implemented by the league on a shadowing, non-binding basis.

The squad cost ratio mirrors Uefa's current financial regulations and allows clubs to spend up to a portion of their overall income on team-related expenses.

Nine of the league's 20 clubs must already adhere with Uefa's SCR as a result of qualifying for Europe.

Two prominent clubs were penalized by European authorities recently for violating regulations.

Asked about SCR at the sports leadership summit in London, Masters said: "We are consulting with our teams about an different approach.

This doesn't imply we don't think the PSR system works."

He added: "The goal is better harmonization with continental rules, which is squad cost ratio, which is a revenue test.

European standards currently mandate 70%. Our system will be 85% because we always want our clubs to have the capacity to spend.

"English football's top division was established on the back of investment in which global financial resources are coming in. We aim to prevent this from being stifled off."

Previous Rule Breaches

Top flight teams two historic clubs were docked points in the previous campaign for violating financial rules.

Last year, a Villa executive the club's co-owner said the regulations "do not make sense" and protected the biggest clubs, while he was contemplating legal challenges against the rules.

Having been forced to offload players to comply with the regulations, Magpies' head coach has also been critical of PSR, claiming it encourages teams to sell academy products.

"The PSR is a look-back profitability test and has its own strengths and weaknesses. No framework is flawless," said Masters.

"We have to keep these things balanced and continue the conversation with our clubs, and that's an important decision, so we should take the time to ensure accuracy. But that decision is coming up."

Supplementary Regulatory Approaches

The league is additionally testing an alternative framework called 'revenue-based capping' (TBA) which essentially limits the amount any club can spend as a proportion of the revenue generated by the lowest-earning club.

Reports suggest the new rules - if adopted could also include TBA, and would come into force at the beginning of the upcoming campaign.

Historic expenditure during the recent player acquisition period amplified certain Premier League teams' worries about PSR, and whether changes are needed to protect competitive balance given the additional revenues being generated for those involved in the enlarged European competition and global club tournament.