PSR to SCR. What does it mean.
This change to the financial rules in The Championship seems to have gone a little overlooked this week, but to be fair there has been a lot going on.
Beginning with the 2026-27 season and therefore this transfer window, Championship clubs have voted to replace the old Profitability and Sustainability Rules (PSR) with a new financial framework based on Squad Cost Rules (SCR).
The new SCR framework limits how much money a club can spend on its playing squad relative to its actual organic income.
These are the differences as I see it.
PSR was loss-based and focuses entirely on a club’s net losses. Championship clubs are permitted to lose a maximum of £39m over a rolling three-year period provided those losses are covered by owner equity.
SCR is revenue-based and focuses on proportional spending. Clubs are restricted to spending a set percentage, which is 85% in the Championship of their total annual football revenue (which is key) plus net player trading profits on squad costs.
That 85% of organic football revenue has to include within it all on-pitch squad costs, which encompasses player, manager and coaching staff wages, agent fees and amortized transfer fees.
Under PSR clubs owners could fund clubs with loans. This has had a nightmare effect on clubs when owners get bored and want their money back, such as Sheffield Wednesday.
Under SCR owners are allowed to inject equity, but this is capped at a maximum of £33 million over a rolling three-year period (or up to £15 million in any single season). Equity never to be returned only as a profit.
Unlike PSR, which measures financial losses over a historical three-year rolling period, SCR requires ongoing in-season monitoring. This allows the league to step in and apply controls as spending happens rather than punishing clubs “after the event”.
Any commercial deals or sponsorships linked directly to club owners or associated parties must be independently verified to ensure they represent a fair market value.
The EFL is full of basket cases, no more so than in The Championship and I think this move will (hopefully) prevent reckless, loss-making gambles for promotion and to align the Championship’s financial controls more closely with those adopted by the Premier League.
This is particularly important as the Premier League consider a substantial increase in funding for the pyramid.
It’ll be interesting to see how this affects spending in the summer transfer window. We saw unprecedented spending last summer by Championship clubs, but this might have clubs think twice.
Equally this change in system only exposes the differences between revenues of a club with parachute payments or one that has spent time building revenues in The Championship over a number of seasons.
Finally, we have to ask our owners, and there is a lot of rich guys among them, are you willing to invest real equity into the football club? Not stupid money, but money for a rebuild that will provide Nathan Jones and his coaching team the very best opportunity to continue on the journey.
🎙️ Just seen Rich Cawley’s interview with Kieran McGuire here.
I listened to some of the recent interview with Gavin Carter, and it would suggest that the club are in a decent place, and building with a long-term vision in mind.
I found his comments around the initial five-year plan (now discarded), and a new five-year plan interesting, as it basically laid out the fact that they didn’t expect to be promoted when we were, which maybe affected the ability to invest more, and meant we ran with a squad that was predominantly League One standard. The fact that attendances, matchday revenues and early season ticket sales are up, imply that we are in a better place to do so this time.
He echoed NJ in using the word ‘ruthless’ regarding the current squad and the need to move some players on, so it is going to get interesting!