What is PSR?

• PSR is the Premier League's 'Profitability and Sustainability Rules' as defined in the Section E.30 of the Premier League Handbook that governs the rules for the 'P&S Calculation' that underpins PSR
  
  What is the P&S Calculation

• This is the aggregated sum of a club's Adjusted Earnings Before Tax for the relevant assessment period.

• The Premier League term this as T where T is the accounting period within which the currently active season ends.
  
  What is Adjusted Earnings Before Tax?

• Well in normal accounting practice Earnings Before Tax (EBT) is the profit or loss of a business after depreciation and interest but before, you guessed it, tax.

• The Premier League's is a bit different and would not ordinarily get anywhere near a business' financial statements.

• The 'adjusted' part is the name for the Premier League's practice of applying a series of "add backs" to the business' reported EBT.

• These "add backs" are costs that the Premier League deem to be in the general interest of clubs and football itself and are therefore categorised as allowable expenses.

• These costs are loosely categorised as investment in infrastructure, community, women’s football, youth development and the depreciation of tangible fixed assets.​

• In other words stuff we all agree is good for the game, safe for the game, and accounting fundamentals.

• Effectively any spending in those areas, but strictly not beyond is deemed to not be a contributory factor to a club's potential losses.
  
  By 31 March

• Clubs are required to submit the following to the Premier League:

• Estimated profit & loss and balance sheet for the ongoing financial year (T)

• Published accounts for T-1 (T minus one) i.e. the previous financial year

• Form 3A detailing the Estimated Earnings Before Tax for T, the Adjusted Earnings Before Tax for T-1 and the Adjusted Earnings Before Tax for T-2 as well as an Estimated P&S Calculation aggregating the Adjusted Earnings Before Tax for T, T-1 and T-2.
  
  If the Estimated P&S Calculation for T suggests a loss of up to £15m

• So long as the club is deemed by the Premier League to be in a position to meet its liabilities and obligations under Rule E.16.9.1 through to the end of the following season (T+1) then no action is taken.

• Those obligations are basically that a club can cover its bills, fulfil its fixtures and do what the broadcasters require of them.
  
  If the Estimated P&S Calculation for T suggests a loss in excess of £15m

• The club will additionally be required to provide, by 31 March, detailed financial information and an EBT forecast covering the period accounting period T through to the end of T+2.

• This includes a requirement for the club to provide proof of funding to the Premier League.

• If the Premier League are not satisfied with the proof of funding or the club are unable to provide such proof, the Premier League may:

• Require and impose a budget against which the club must operate for a period until the Premier League is satisfied the club is able to meet its obligations. This can also include a bar on transfers and contract awards.
  
  By 31 December

• Clubs are required to submit the following to the Premier League:

• Published accounts for what has now become T-1.

• These are the actual accounts replacing the Estimated profit & loss and balance sheet for the ongoing financial year (T) submitted by March 31st

• Adjusted Earnings Before Tax for T-1

• PSR Calculation for T-1
  
  If the P&S Calculation for the period T-1, T-2 and T-3 results in total Adjusted Earnings Before Tax in excess of £105m

• The Premier League will treat the club as being in breach of PSR

• Shall report the club to a Commission set up for the purposes of hearing the case

• May require and impose a budget against which the club must operate for a period until the Premier League is satisfied the club is able to meet its obligations. 

• May place a bar on transfers and contract awards.
  
  Why £105m?

• No-one knows or at least no-one is telling.

• Introduced in 2013 there has never been any published methodology to explain or justify what many see as an entirely arbitrary figure.

• Per Keiran Maguire on the Price of Football podcast: "I've done a lot of research and it just appears to be a number plucked from nowhere."

• Worse still is the fact that over the intervening twelve years the limit has not increased by inflation let alone by the growth in football club revenue.

• As Keiran Maguire explained: "The losses of £105m based on the revenues of a club in 2013 were 29.4%. So what the Premier League said is if you are able to be sustainable, you are allowed to lose 29.4% of the total money that you bring in but if we move that forward to the most recent set of financials, that 29.4% drops to 14.1%.

• "If the Premier League was saying that 29.4% was a valid figure, let's work that out based on current revenues and, according to my figures, clubs should be allowed to lose £218m over three years and they would be in exactly the same position as they were in 2013."
  
  See also: Villa and PSR 2024-25