What are FFP rules in football? Premier League PSR explained
Radio Times is on hand with all you need to know about FFP rules in football and how PSR works in the Premier League.
Financial regulations in football have become a regular topic of discussion in recent years.
Two of the most significant systems in football are UEFA’s Financial Fair Play (FFP) and the Premier League’s Profit and Sustainability Rules (PSR).
The game's organisations are hoping to create financially sustainable clubs as well as promoting competitive football by regulating spending.
Clubs must operate within their financial means and protect their long-term stability rather than spending money they don't have.
RadioTimes.com has rounded up everything you need to know about FFP rules in football including PSR in the Premier League.
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What is FFP?
Financial Fair Play (FFP) are regulations implemented by UEFA in 2010 to promote the financial wellbeing of European clubs. The main message of FFP is quite simple: clubs should not spend more than they earn.
The rules were designed to stop teams from racking up major debt while maintaining a competitive balance in European competitions like the Champions League and the Europa League.
Initially, clubs had to break even over a rolling three-year period, meaning they couldn't spend a lot more than their revenue. Flexibility was allowed in areas such as youth development, infrastructure and women’s football, providing it didn't lead to major losses.
Punishment for failing to meet the requirements included fines, transfer restrictions and even disqualification from UEFA competitions.
The model changed in 2022 when UEFA introduced a new sustainability system. The revised rules introduced a squad cost ratio, which limits spending on player wages, transfers and agent fees to a certain percentage of the club's revenue.
The regulations introduced a gradual reduction in allowable losses over time, with clubs facing penalties if rules weren't followed.
FFP has often been criticised for favouring 'bigger' clubs with high revenues while restricting the ability of 'lesser' clubs to spend aggressively and compete.
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What is PSR?
UEFA’s FFP rules apply to clubs competing in European competitions but the Premier League has its own financial regulations - Profit and Sustainability Rules (PSR).
These rules are designed to ensure clubs operate within their financial means and avoid excessive losses.
Premier League clubs can lose up to £105 million over a three-year period, so that explains why numerous teams are selling their better players despite wanting to keep hold of them.
Championship clubs have a lower limit of £39 million over three years, and again, the overall aim is to stop clubs from financial collapse, as seen in recent years.
The FFP system is focused on revenue-based limits whereas PSR is loss-based. If a club exceeds the £105 million threshold, they can be punished with points deductions, fines or spending restrictions.
Everton and Nottingham Forest have been charged for breaching PSR rules in recent years and they were hit with point deductions.
Many have criticised PSR as it can arguably hinder teams trying to break into the Champions League spots and potentially become title challengers.
Richer clubs with higher revenues can spend more freely within their means but smaller clubs often struggle to invest in their squads without breaching the loss limits.
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