Premier League clubs have voted to change the league’s profit and sustainability rules (PSR), which are set to be replaced by a new system of financial regulation.

The new system will be aligned closely with the squad cost-to-revenue ratio contained within UEFA’s Financial Sustainability Regulations (FSR), which could be used as early as this summer. 

A Premier League statement on Monday read: “At a Premier League Shareholders’ meeting, clubs agreed to prioritise the swift development and implementation of a new League-wide financial system.”

The system change has been brewing for years, but has recently picked up pace following Everton’s six point punishment and Manchester City’s ongoing investigation into its 115 charges.

Earlier this month, Co-Owner of Crystal Palace John Textor criticised the Premier League‘s financial regulations, calling Financial Fair Play (FFP) a “fraud term”. Textor explained that the existing rules make it impossible for smaller clubs to compete with the “big six”.

The new financial system will enable clubs to spend up to 85% of revenue on squad cost, with a sliding scale of penalties in place where clubs exceed that ratio. This would replace the current system of not being able to lose more than £105m over a three-year period.

Textor and other smaller clubs may live to regret this vote, with the focus on revenue top clubs will be able to spend more, making it even harder for smaller clubs to bridge the gap. 

Currently, there are three teams charged with breaking FFP, Nottingham Forest, Everton and Manchester City. Despite the potential rule change, these clubs will all still be judged in relation to the existing rules.

The Premier League said: “This will provide certainty for clubs in relation to their future financial plans and will ensure the Premier League is able to retain its existing world-leading investment to all levels of the game.”

However, this vote doesn’t mean that the new financial system will ever come into play, as it will need to be approved at the league’s annual general meeting in June.

“Alongside this, Premier League clubs also re-confirmed their commitment to securing a sustainably-funded financial agreement with the EFL, subject to the new financial system being formally approved by clubs,” the League added. 

“The League and clubs also reaffirmed their ongoing and longstanding commitment to the wider game which includes £1.6bn distributed to all levels of football across the current three-year cycle.

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