Understanding the New Premier League SSR Rules: How Clubs Must Manage their Finances

From the 2026/27 season, the Premier League will take a different approach to financial regulation for its clubs, switching from the previous Profit & Sustainability Regulations (PSR) to a new Squad Cost Ratio (SCR) system.

In addition to the SCR system, the Premier League have also announced the introduction of SSR tests, which stands for Sustainability and Systemic Resilience.

This SSR framework will be used to assess the financial health of Premier League clubs in the short, medium, and long-term using three different tests:

• Working Capital Test
• Liquidity Test
• Positive Equity Test

Overall, these are designed to ensure clubs are sustainable enough to maintain their financial stability despite unforeseen economic shocks.

This article will discuss what these tests are for, how they work, and the sanctions clubs could face if they don’t comply.

Working Capital Test

Aimed at judging short-term cash resources, this first test requires clubs to submit records of the cash available to them every month over the course of a season.

This available cash includes their projected cash balances as well as qualifying working capital funds. In essence, this is money clubs don’t explicitly have to hand, but is at their disposal within 28 days. 

An example is undrawn credit facilities, which are pre-agreed, flexible loan agreements that allows a club to access funds over an extended period without needing to reapply for a loan each time.

Cash and working capital combined, the club must have a minimum of £12.5 million available to them, a threshold deemed enough to protect them from short-term revenue loss, for example sudden termination of commercial contracts or delayed incoming transfer payments.

Liquidity Test

The Premier League’s Liquidity Test is the second part of the SSR framework, and is a test of a club’s medium-term liquidity and resilience.

The assessment checks whether a football club can stay financially stable over two seasons if unexpected problems, such as relegation, arise. It looks at the club’s cash and other easily convertible assets, such as 40% of the market value of its players (selling players is a way clubs can raise emergency cash.)

To pass, a club must show that after a hypothetical £85 million ‘stress test’, it would still have a positive cash balance. This remaining value, called Liquidity Headroom, ensures that clubs are resilient enough to the volatility of professional football.

Positive Equity Test

The third and final test looks at the long-term financial health of Premier League clubs.

The Positive Equity Test does so by examining a club’s balance sheet to ensure it isn’t taking on excessive debt and can withstand major long-term economic shocks, such as a permanent drop in broadcast revenue or even global events like a pandemic.

To judge a club’s ability to deal with these types of economic losses, its Positive Equity Ratio is assessed.

This is the ratio of total liabilities (everything a club owes such as loans or debts) to adjusted assets (things a club owns that count towards financial health, such as cash and players). To pass, a club’s ratio must be below a set limit:

• 90% for 2026/27
• 85% for 2027/28
• 80% from 2028/29 onwards

In short, the test ensures clubs are financially healthy, with enough value in their assets to offset risks, rather than relying on unsustainable levels of debt.

Will Clubs Face Sanctions if they Fail a Test?

As the purpose of SSR regulations is to improve financial sustainability, punishments for non-compliance differ to typical fines and levies.

If a club fails any of the three tests, they may initially be asked to make changes such as voluntarily limiting spending, injecting cash into the club, or adjusting its debt structure and repayments.

Should the club not take these actions, the Premier League can then step in and action formal sanctions.

In this case, a club may have to submit a business plan for how it will return to compliance, have a spending limit enforced, or require approval for new player contracts.

These rules will be put in place alongside SCR as of the 2026/27 season, and are a part of new attempts at making football clubs sustainable in what is a volatile financial landscape for many clubs.

Understanding the Premier League’s financial regulations is key to understanding the industry as a whole. To develop your knowledge in this area, browse our expert-led programmes today.

Article by Zakaria Anani