FFP and PSR Explained — Football's Financial Rules in Plain English
2026-07-17
Points deductions, panicked June sales, "pure profit" academy players — football's financial rules now shape the sport as much as tactics do. Here's the plain-English version.
The idea behind the rules
After decades of clubs spending themselves into crisis, regulators introduced limits: spend roughly what you earn. The goals are stopping financial collapses and (in theory) keeping competition fair between billionaire-backed clubs and everyone else.
The Premier League's PSR
Profitability and Sustainability Rules allow clubs to lose a maximum of £105m over a rolling three-season period (less if the owners don't guarantee the losses). Spending on infrastructure, academies, community programmes and women's teams doesn't count — the rules target squad spending, not investment. Breach the limit and an independent panel can impose points deductions, as Everton and Nottingham Forest discovered.
UEFA's squad cost ratio
UEFA replaced classic FFP with a simpler headline number: clubs in European competition may spend at most around 70% of their revenue on wages, transfers (amortised) and agent fees. Exceed it and fines, squad restrictions or bans follow.
Why June 30th gets weird
PSR periods end on 30 June. A club close to the limit must book profit before that date — which is why late June brings strange, rushed sales, sometimes clubs swapping academy players at convenient valuations. Academy graduates are "pure profit" in the accounts (they cost nothing on the books), making them the easiest players to sacrifice.
Amortisation — the accountant's trick
A £100m signing on a five-year deal costs £20m a year in the accounts, not £100m at once. That's why long contracts became fashionable — spreading the hit — until regulators capped amortisation periods at five years.
The financial game runs underneath every transfer story in the news. Watch how squad-building decisions play out on the pitch via live scores, and see who's converting spending into points in the standings.
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