Premier League clubs alter financial fair play rules

The Premier League will from next season move to a new system of financial fair play based on squad costs.

The clubs met in London on Friday to vote on three possible methods of replacing profit and sustainability regulations.

Squad Cost Ratio (SCR) got 14 votes in favour and six against, which is the minimum number that is required to exact a rule change.

Clubs will have a limit of 85% of revenue, although teams in Europe will have to adhere to Uefa's limit of 70%.

Rules around sustainability, which set out a club's financial spending plans over the medium and long term, were passed unanimously.

But anchoring, which would have placed a top limit on spending based on the money earned by the bottom club, failed to get the necessary support. Twelve voted against it, with seven in favour and one abstaining.

"The new SCR rules are intended to promote opportunity for all clubs to aspire to greater success and bring the league's financial system close to Uefa's existing SCR rules, which operate at a threshold of 70%," a Premier League statement read.

"The other key features of the league's new system include transparent in-season monitoring and sanctions, protection against sporting underperformance, an ability to spend ahead of revenues, strengthened ability to invest off the pitch, and a reduction in complexity by focusing on football costs.

"The Sustainability and Systemic Resilience rules assess a club's short, medium and long-term financial health through three tests - Working Capital Test, Liquidity Test and Positive Equity Test."

More to follow.