The bargain that shaped modern football
English football must keep clubs financially viable while giving them a credible chance to improve their sporting position. Revenue-based spending rules connect those goals: they restrain commitments, but also give clubs that earn more greater permission to spend. The tension is whether financial protection can preserve existing advantages. Club ownership, supporter control and promotion require separate answers.
Manchester City tests that distinction. Outside investment can help a challenger rise, but its accounting must reflect the substance of the funding. Inaccurate accounts cannot be defended by pointing to an unequal hierarchy; enforcing accurate accounts does not establish that the hierarchy is fair.
The essay examines five distinct questions: financial survival, spending permission, club control, access to competition and individual suitability. Historical accounts establish the 1992 commercial bargain; financial rules and worked examples explain its later tensions. The argument identifies mechanisms, not a measured effect on sporting mobility. Participant recollections and supporter histories document particular perspectives, not a representative poll of opinion. Findings, appeals and sanctions are distinguished at the evidence cutoff of 1 October 2026. Figure 1 maps these separate questions.
Five questions, five different jobs
The breakaway bargain
The initiative came from leading clubs, broadcasters and the FA. The “Big Five”—Arsenal, Everton, Liverpool, Manchester United and Tottenham Hotspur—were represented by David Dein, Philip Carter, Noel White, Martin Edwards and Irving Scholar. Greg Dyke of London Weekend Television convened discussions in 1990. The clubs wanted greater control of broadcasting and sponsorship income, more resources for players and facilities, and more influence over distribution. This combined a growth strategy with a transfer of authority from the Football League.1
The FA helped secure wider club support. Rick Parry, the new league’s first chief executive, later recalled that its leadership persuaded clubs beyond the Big Five, while the autonomy conceded weakened the FA’s ambitions to reduce fixtures and assist England. His retrospective account identifies different objectives within the founding coalition.2
The Founder Members Agreement was signed on 17 July 1991. First Division clubs resigned from the Football League on 20 February 1992; the Premier League was incorporated on 27 May and began on 15 August with 22 clubs. Promotion and relegation survived. The commercial breakaway therefore preserved sporting access through the pyramid while giving top-division clubs greater control of its most valuable income.3
Sky supplied the decisive broadcasting partnership after the breakaway discussions. The Sky–BBC package combined subscription live coverage with terrestrial highlights, at a commonly reported £304 million over five years. Rival clubs collectively sold a competition they needed one another to produce; clubs outside the top division retained sporting connections but less authority over that commercial settlement.4
A contested settlement
The settlement was contested. A May 1991 Football League statement, preserved by the National Football Museum, opposed the appropriation of its heritage and promised resistance. The language conveys a sense of dispossession: a shared institution was losing control of the competition it had built. That interpretation concerns the League’s stated position, while the founders anticipated autonomy and growth.1
Players disputed the allocation of the new income. Brian Deane and Tony Cottee later recalled the PFA’s stance on its distribution. Their testimony records a demand for a share of the rewards generated by footballers’ labour, rather than unanimous endorsement of the clubs’ settlement.4
The Football Supporters’ Association’s retrospective history records campaigns over prices, spectator treatment and representation. Those organised concerns show why greater commercial wealth did not automatically mean greater supporter influence. They do not measure how many supporters welcomed or opposed the league at launch.5
Safety was another part of the period’s context. The government’s account of the Taylor Report identifies failures of police control as central to Hillsborough. Safer grounds answered obligations to spectators, alongside the opportunities for commercial development. The emotional picture is consequently mixed: executives anticipated growth, Football League officials defended a shared institution, players sought a fair allocation, and supporter organisations demanded access and a voice.6
More income, continuing pressure
Commercial expansion was extraordinary. Deloitte reports aggregate top-division revenue of £170 million in 1991–92 and Premier League revenue of approximately £6.8 billion in 2024–25. The latter season’s wages reached £4.4 billion, or 65 per cent of revenue. The endpoint comparison is nominal, covers different numbers of clubs and does not measure the causal effect of the breakaway. It nevertheless shows the scale of the business that emerged.7,8
Sporting success can reproduce commercial advantage. A successful team attracts audiences and sponsors; greater income can finance a stronger team; further success can enlarge the audience again. This is path dependence: present opportunities reflect assets accumulated through past success, stadium capacity and established support. It does not mean outcomes are predetermined, but it explains why a poor season need not erase a large club’s commercial position.
Three sources of advantage must be distinguished. Support, historical success and stadium assets predated 1992; the breakaway changed collective commercial control and enlarged the value of top-division membership; subsequent owner investment could change a club’s resources and sporting position. These processes interact. This essay identifies a plausible mechanism of persistence, not an estimate of how much inequality each process caused. Establishing that would require club-level income, investment and performance data, with a credible comparison for what would have happened under different rules.
Collective selling also redistributes within the Premier League. Its published domestic broadcast formula allocates 50 per cent equally, 25 per cent by televised appearances and 25 per cent by finishing position. The international settlement shares the previous revenue base equally and distributes subsequent increases by league position, subject to a maximum-to-minimum central distribution ratio of 1.8:1. Central commercial income is shared equally. Thus pooled income moderates differences while performance-linked payments reward success; separate UEFA receipts can enlarge the advantage of repeated European qualification. Solidarity and parachute distributions extend redistribution beyond current members, but serve different purposes.9
Football’s expenditure incentives also depend on rivals. As Szymanski’s economics of sporting contests suggests, clubs pursue scarce rewards whose value cannot be assessed independently of competition. More spending by one club can induce others to respond, even when aggregate income rises. Revenue growth therefore need not become retained profit. A financially cautious decision can be individually prudent while risking a worse sporting position.10
Owner support complicates that discipline. Storm and Nielsen’s soft budget constraint framework concerns expectations of rescue: a club may undertake commitments it would otherwise avoid if it expects an owner or another stakeholder to cover the shortfall. Cultural attachment makes failure socially costly, but does not make commitments affordable. Controls can protect creditors and clubs from that pressure; their competitive consequences still require separate assessment.11
Chelsea’s acquisition by Roman Abramovich in 2003 and championships in 2005 and 2006 illustrated how outside wealth could accelerate a challenger’s rise. Portsmouth’s administration in February 2010 illustrated how top-flight participation could coexist with financial collapse. Neither case proves a general causal rule about ownership, but together they reveal the policy difficulty: investment can widen sporting opportunity while dependence on funding creates vulnerability.12,13
When revenue becomes permission
UEFA approved its Financial Fair Play concept in 2009 and regulations in 2010, with phased implementation leading to the first break-even assessments in 2013–14. Premier League clubs adopted enhanced financial controls in February 2013. The distinction between adoption and operation matters when considering earlier investments.14,15
Under the subsequent Profitability and Sustainability Rules, the general three-year adjusted-loss limit for a club spending all three seasons in the Premier League was £105 million, subject to conditions. Lower thresholds applied to periods including Championship seasons. Adjustments recognised qualifying expenditure such as youth development, community activities and women’s football, alongside specified infrastructure-related accounting items.16
The framework distinguished investments intended to strengthen a club’s future capacity from immediate sporting commitments. This is administratively useful but economically imperfect. Players can build lasting commercial value; infrastructure can generate income slowly. An investment’s long-term rationale does not determine how it is treated under the rulebook.
Once owner capital could finance the business without necessarily qualifying as revenue, income gained a second function. It measured commercial activity and helped determine how much sporting expenditure was permitted. Peeters and Szymanski’s analysis of European FFP directs attention to the distributional consequences of such restrictions, alongside solvency. A spending rule based on existing earnings may reduce risk while making it harder for a challenger to invest ahead of its audience.17
Financialisation sharpens the distinction between funding and performance. Debt requires servicing and repayment; equity does not create the same fixed repayment obligation. A club can nevertheless depend on continuing equity support to meet recurring commitments. Transfer accounting adds another distinction: an acquisition cost recognised over a player’s contract is different from cash paid at signing, while a disposal can generate an accounting profit without making the entire proceeds immediately available in cash. These differences explain why profit, liquidity and owner wealth cannot substitute for one another as regulatory measures.
The policy question is consequently more precise than whether wealthy owners should be allowed to spend. Which commitments can safely be funded, which income genuinely belongs to the club, and which distribution of spending capacity supports a credible competition? Answering the first two still leaves the third open.
What the City case tests
Funding accounts and appeal
Sheikh Mansour’s 2008 letter presented City’s acquisition as a long-term undertaking. The Etihad partnership announced in 2011 combined shirt sponsorship, stadium and campus naming, and cooperation around the Manchester–Abu Dhabi route. The City Football Academy later provided enduring infrastructure. These club publications establish the stated strategy and its visible components; they do not independently establish the accounting character of every associated payment.18,19,20
The accounting question can be explained without assuming that advertising was worthless. Consider a hypothetical sponsor owing £20 million and an owner separately contributing £30 million as equity. The club receives £50 million, but only £20 million is sponsorship income. Recording all £50 million as sponsorship makes investment look like earnings, which can increase permission to spend. The example assumes separate obligations: the ultimate source of cash alone does not decide whether a payment settles a genuine sponsor liability or supplies owner equity.
That distinction is central to the Commission’s alternative reasoning. A real advertising service does not establish who owed the full fee or how every payment should be recorded. Paragraphs 110–115 of the published core decision describe sponsorship agreements as “shams” and, alternatively, hold that their economic substance differed from their legal form: the owner-funded component was equity rather than sponsorship revenue. In the published core decision, the Commission’s findings against the club included overstated revenue, accounts failing to give a true and fair view, knowledge or recklessness, and intended circumvention; City had said it would challenge that decision. Other findings concern omitted liabilities and expenses. Challenging the word “sham” alone would therefore leave the alternative accounting ground to answer.21
On 29 September 2026, the Premier League published those core findings concerning 2009–10 to 2017–18. Its statement reported serious financial breaches and three of four cooperation allegations upheld. The stated revenue inflation and cost reduction exceeded £900 million across the affected period. This is the League’s aggregate accounting-distortion figure, not an annual amount, fine or transfer-spending total.22
These findings concern the club’s accounts and its conduct in the investigation. They are not an order that named current executives must leave. Individual eligibility or suitability requires a separate determination under the relevant regime; the regulator’s powers and its stated approach to City are discussed below.
City’s reply has an evidential claim, not only an objection to the outcome. In his staff video published by Sky Sports on 29 September, Ferran Soriano said the case rested on the accusation that owner money reached the club through Abu Dhabi sponsors. He said bank records, transfers and testimony showed that the funds did not originate from the owner. That is City’s account of its evidence, not a finding adopted here. It contests the factual premise of owner funding; the alternative accounting ground also requires attention to the substance of the obligations and payments. The Times separately reported a proposed government-rather-than-ADUG funding argument on 1 October. A reported argument is not the filed appeal or proof that it succeeds.23,24
The club’s statement alleges material errors of law, principle and fact. The League specified 2 October as the appeal deadline and a separate sanctions hearing. Publication of the core decision did not determine the merits of a future appeal or the penalty. No sanction had been determined at this essay’s cutoff. The hypothetical example explains classification rather than establishing disputed facts or predicting the appeal.25,22
The 2026/27 Handbook makes the appeal a review of the evidence before the Commission (W.92), with fresh evidence restricted by W.88. The corresponding review rule was W.74 in the 2023/24 rules discussed in Everton’s appeal; the numbering changed. The Everton Appeal Board’s 2024 discussion illustrates the constraint: disagreement alone does not justify substituting a different conclusion; a material error of law or procedural unfairness can justify intervention. That procedural comparison does not establish how City’s challenge should be decided.26,27
Timing is conditional. Under W.84–86, standard directions ordinarily apply but may be varied or disapplied. Where they apply, the hearing must conclude within 12 weeks of filing and last no more than five days; written reasons follow within 30 days of its final day. Twelve weeks is therefore not an unconditional deadline for the whole case. The appeal, the separate sanctions hearing and any later IFR suitability assessment remain different proceedings.26
Under W.97 an Appeal Board decision is final subject to Section X. For disciplinary disputes, X.4 permits only specified challenges: lack of jurisdiction, fraud, malice or bad faith, seriously prejudicial procedural error, a perverse interpretation of law, or a decision that “could not reasonably have been reached” by a Commission or Appeal Board properly applying its mind to the facts. This is a restricted arbitration review, not a fresh assessment of the sponsorship evidence. X.2.4 provides no route to the Court of Arbitration for Sport. Any subsequent court challenge is governed by the Arbitration Act; X.50 expressly excludes an appeal on a point of law under section 69. The High Court is therefore not the next ordinary merits hearing.26
Enforcing accurate accounts does not establish that the hierarchy is fair.
A reader concerned about established clubs’ advantages can accept that concern without treating it as a defence to inaccurate accounts. A reader concerned about reporting breaches can demand enforcement without assuming that enforcement makes the spending hierarchy fair. Chelsea’s earlier rise illustrates how outside investment can help a challenger; it does not answer the Commission’s classification of the disputed City funding as equity rather than sponsorship revenue. Nor do the published City findings, by themselves, establish that the 2008 acquisition lacked sporting purpose or settle how every trophy should be treated. Any such consequence needs its own evidence, rule and determination. The two practical requirements are credible accounts and a viable route for challengers to advance. This essay makes no finding of personal dishonesty and does not identify any current or former officer as individually responsible.
English enforcement in context
The English loss-limit cases show how breach, mitigation and proportionality have been assessed when a penalty was set. They provide context for a sanctions hearing, not a tariff for City’s different findings.
Everton’s admitted breach for the period ending 2021/22 was £19.5 million above the £105 million adjusted-loss threshold. In February 2024, the Appeal Board reduced ten points to six. It identified material errors: the Commission had made adverse good-faith findings on allegations not advanced against the club, and had failed to consider relevant sanction benchmarks. The Board then assessed a proportionate penalty for the accepted breach.27 For the period ending 2022/23, an admitted £16.6 million breach brought a further two points. The Commission allowed mitigation for overlapping losses already penalised, lost sponsorship and early admission. Everton withdrew that appeal; the outstanding stadium-interest accounting dispute was discontinued in January 2025 as further action was considered inappropriate or disproportionate.28,29
Nottingham Forest admitted a £34.5 million breach for the period ending 2022/23, against a £61 million threshold reflecting two Championship seasons. The Commission credited exceptional cooperation when imposing four points. The May 2024 Appeal Board upheld the deduction, rejecting challenges concerning a player sale after the assessment period and suspension of the penalty. It held that the Commission was entitled to impose the immediate sanction.16,30
Leicester’s later case concerned EFL P&S rules for 2022–24, with jurisdiction transferred to the Premier League on promotion. The Commission accepted a 36-month assessment and a player-cost accounting adjustment, but still found a £20.8 million breach of the £83 million threshold. Improving finances mitigated the penalty; exceptional cooperation was not accepted. Six Championship points were deducted in February 2026 and upheld in April. The Appeal Board rejected the club’s challenges to authority and sanction and the League’s request for an increase over late accounts. Calculation disputes therefore need to be distinguished from the resulting breach and penalty.31,32
These decisions concern adjusted losses under their applicable rules. Their outcomes do not determine a sanction for City’s reported accounting and cooperation findings, nor establish individual responsibility.
What comparable UEFA procedures establish
City’s own UEFA proceedings must be kept separate. Its May 2014 settlement imposed targets and restrictions. In July 2020, CAS lifted the two-year European exclusion and reduced the fine from €30 million to €10 million for non-cooperation; most alleged breaches were not established or were time-barred. Neither “cleared of everything” nor “all allegations proved but excused” describes that outcome. The Premier League proceedings involve a different body, rulebook and period. The September 2025 APT settlement concerned another framework again, accepting the current rules as valid and binding without resolving the historical financial charges.33,34,35
PSG supplies a valuation comparison. Its 2014 settlement assigned the Qatar Tourism Authority contract a fair value significantly below the club’s submitted amount. In June 2018, UEFA closed its investigation into 2015–17 after sponsorship fair-value adjustments left the break-even result within the acceptable deviation. Those published outcomes concern valuation and break-even compliance; they do not establish the same owner-equity misclassification found in City’s Premier League proceedings. A commercially useful contract, an excessive valuation and owner equity recorded as sponsorship revenue—the Commission’s classification in City’s case—are different propositions.36,37
Milan separates a breach from its punishment. In July 2018, CAS confirmed failure to meet break-even requirements but annulled exclusion as disproportionate and sent the case back for a proportionate measure. Milan’s 2019–20 exclusion followed a later agreed CAS award. Galatasaray illustrates a procedural limit: its appeal succeeded in February 2019 because the review decision was late under UEFA’s rules, leaving the settlement binding. Neither result means accounts rules are optional; both show why procedure and proportionality belong within credible enforcement.38,39,40
The wider record also contains earnings settlements without the Commission’s published finding in City’s case: owner equity recorded as sponsorship revenue. In September 2022, eight clubs agreed contributions totalling €172 million: €26 million unconditional and €146 million dependent on later compliance. PSG’s maximum was €65 million, with €10 million unconditional. These were transitional break-even settlements, not €172 million immediately payable in fines. In June 2026, UEFA reported that PSG, Milan, Monaco, Beşiktaş, Inter, Antwerp and Trabzonspor had met their final earnings targets and exited; Marseille had not and faced further measures.41,42
These cases supply comparisons, not interchangeable precedents. Ask what rule was breached, what evidence established it, whether the decision survived appeal, and what remedy followed. A different result does not establish unequal treatment unless the relevant circumstances are comparable. Conversely, a successful appeal does not erase an independently upheld breach. None of these UEFA outcomes decides City’s Premier League appeal.
The limits of the subsidy comparison
The City classification question is whether receipts were sponsorship revenue or owner equity. A subsidy inquiry asks whether a measure supplies an economic advantage. Evidence sufficient for one test does not establish the other. Neither an owner’s nationality nor a state vehicle’s total assets demonstrates a benefit to a particular club.
The EU Foreign Subsidies Regulation offers a useful distinction: a financial contribution is broader than a subsidy. Subsidy status requires attribution to a third country, benefit and specificity; a market benchmark helps establish benefit. This is a method of identifying support, not the rulebook governing City’s Premier League accounts. The comparison makes no finding of an FSR infringement by a club.43
Premier League associated-party rules address valuation under their own definitions of connections, including common ownership, board membership and material influence. Independent expertise and comparable transactions inform fair-market-value assessment. Those rules are not confined to state-linked counterparties. A subsidy, an excessive related-party valuation and inaccurate revenue recognition are distinct issues, even when they arise from the same payment.44
The relevant economic question is what advantage was supplied, on what terms and to whom. Benefits can arise through finance or reduced costs as well as sponsorship. Consistent scrutiny requires evidence of those benefits; it cannot use general industrial-subsidy totals as evidence of City’s historical accounting breaches. The opportunity argument remains whether clubs have a viable route to challenge inherited commercial strength.
Protection across the relegation cliff
This comparison addresses financial survival across relegation and access through promotion; it does not measure the effect of revenue-based spending permission. The same tension appears at the boundary between divisions. Relegation sharply reduces broadcast income while employment contracts and operating commitments remain. Parachute payments provide a declining financial bridge. The Premier League presents them as protection that allows clubs to invest while preparing for the risk of relegation.45
Evans, Scelles and Walters’ September 2025 briefing describes payments of 55, 45 and 20 per cent of the relevant equal-share broadcast distribution, with shorter entitlement following a single-season Premier League stay. Their recommendation to link support to cost reduction is a policy judgement, not a finding of rule violations.46
Their wage-and-points model estimates that full removal changes 11 of 40 automatic promotion places across 20 seasons; removing only their defined excess wage support changes two. These are modelled changes, not an observed share of promotions or established causal effects. The two-place result is the closer comparator for reform retaining the bridge while targeting excess support; the eleven-place result concerns abolition.46 Figure 2 keeps the two modelled scenarios distinct.
Two reforms, two modelled results
Each square represents one modelled automatic-promotion place.
Deloitte’s 2026 review gives the financial scale. Championship revenue totalled £942 million in 2024–25; operating losses were £436 million and pre-tax losses £355 million. The latter measure includes additional items such as player trading, amortisation and finance costs. Parachute receipts were approximately £185 million. Norwich and Watford each experienced revenue reductions exceeding £30 million when payments ceased. Those observations demonstrate the importance of the bridge without isolating its causal effect on promotion.47
The competitive mechanism is straightforward. Support that lets a relegated club retain expensive players can help it compete against clubs that never received Premier League income. An aspiring rival then faces a choice between greater expenditure and accepting a weaker chance of promotion. The individual protection can therefore intensify pressure elsewhere in the division. Removing it abruptly would expose contractual commitments; leaving it untouched need not be neutral for the competition.
A better evaluation asks how much support is needed, for how long, with which incentives to adjust, and how it interacts with distributions to other clubs. The lower leagues are consequently central to the history of the breakaway. Sporting openness survived in 1992, but movement through the pyramid takes place across a pronounced financial boundary. Promotion remains possible while its pursuit can encourage dependence on speculative owner funding.
50+1 and the question of control
This comparison answers who controls a club; it does not establish how much the club can safely spend or how easily it can rise. Germany offers a comparison because 50+1 addresses authority. Section 8 of the league association’s statutes generally requires the parent club to retain a majority of voting rights in the company operating professional football. Special provisions apply to a partnership limited by shares, where control through the general partner can provide the required position. The rule concerns effective control, rather than a universal requirement to own most of the economic equity.48
This changes the question raised by external investment. Capital can be admitted while control is reserved to the club structure. The arrangement offers a route for member influence that is different from treating supporters primarily as customers. It does not itself impose equal spending, remove debt, equalise commercial audiences or guarantee competitive balance. Claims that it causes low ticket prices, high attendance or a particular distribution of championships would require evidence beyond the rule’s existence.
Its legitimacy also depends on implementation. Formal control by an association means less if ordinary supporters cannot become voting members or exercise meaningful influence. In August 2026, the Bundesliga’s governing association welcomed the Bundeskartellamt’s conclusion that the rule faced no fundamental competition-law objection, subject to consistent application without unjustified differences, while acknowledging further work on club transparency, organisational rules and benefactor exemptions. Its own statement treated the assessment as a basis for reform, rather than the end of the governance debate.49,50
The comparison therefore identifies a separate regulatory objective. England’s spending controls principally ask whether commitments and accounts satisfy financial rules. A member-control rule asks who has authority to choose those commitments. Neither mechanism substitutes for the other. A club can be democratically accountable and financially vulnerable, or financially resilient while supporters have little control. The 1992 disputes over belonging and voice remain relevant because more revenue cannot by itself resolve that distinction.
The NFL and a closed membership
This comparison concerns spending permission and talent allocation among existing members; it does not test access through an open pyramid. The NFL combines a closed franchise competition, shared national income, a common salary cap and a draft that gives weaker teams priority access to incoming talent. There is no promotion or relegation. Draft order generally puts non-playoff teams first, ordered by record, with the Super Bowl winner last; trades can transfer those selections. The design assists an existing weak member rather than admitting a successful outsider.51
Shared income gives that spending restraint a substantial financial base. Green Bay’s July 2026 financial report recorded national revenue of $453.2 million, up from $432.6 million a year earlier. The NFL’s common 2026 salary-cap figure is $301.2 million. These are different measures and reporting periods, but they illustrate the scale of pooled income relative to the payroll ceiling.52,53
The NFL–NFLPA collective bargaining agreement links player costs to defined league revenue; projected benefits are deducted before the remainder is divided among clubs to calculate the cap, with applicable adjustments. It also requires minimum team cash spending of 90 per cent of the combined caps across specified multi-year periods, including 2024–26. This floor tests cash paid, rather than a single season’s cap charges. Labour’s allocation is therefore negotiated through collective bargaining.54
The ceiling is hard, but the timing of charges is flexible. Signing bonuses are prorated over a contract, up to five seasons. In a simplified four-year deal, a $20 million signing bonus contributes $5 million to each year’s cap charge; adding $2 million of first-year salary produces a $7 million first-year charge despite $22 million in cash compensation. Salary-to-bonus restructures move charges into later years. Ordinary roster bonuses generally count in the year earned, with exceptions; they should not all be treated like signing bonuses.55
When a player leaves, remaining bonus allocations can become “dead money.” Post-1 June treatment can split those charges between the current and following season. Void years can extend bonus allocation, but their expiry can accelerate remaining charges. These mechanisms change the timing of recognition rather than create unlimited spending permission. Unused room can also be carried forward under the agreement.55,54
The lesson for England is that payroll restraint and substantial redistribution can operate together. A common cap need not reproduce each club’s individual commercial income as its spending boundary. But the NFL avoids relegation shocks by excluding relegation itself. Its internal opportunity for a weak franchise to recover is different from the English pyramid’s opportunity for an outside club to rise.
Neither equal cap space nor shared income guarantees equal sporting performance, supporter authority or immunity from financial mistakes. The comparison shows that a spending ceiling can be separated from each club’s own revenue; it does not establish that a common English cap would widen opportunity. Promotion and relegation, European qualification and contracts that survive relegation create problems absent from the NFL’s closed membership. Any English proposal would need evidence on those problems, cross-division rules and collective bargaining. This is a design comparison, rather than a causal case for transplanting the cap.
Reform asks different questions
The November 2025 vote led to SCR and SSR replacing PSR from 2026–27, while enforcement powers for earlier PSR periods remained. The spending rule, resilience tests and individual suitability regimes address different questions.56,57
Spending permission and its limits
Squad cost covers contracted players and the head coach: remuneration, transfer amortisation and impairment, and agent costs under the prescribed recognition rules. It includes contracted players outside the matchday squad. Assistant coaches and other non-playing staff are excluded, as are academy and women’s-team costs. Stadium investment is outside this squad measure; liquidity requirements and connected-party valuation still matter.57
SCR sets a Green Threshold of 85 per cent and initially a Red Threshold of 115 per cent of defined football revenues. The 30 percentage-point allowance permits investment ahead of earnings, but use can reduce later headroom. The appendix explains depletion, restoration, testing and enforcement under Handbook Appendix 2.57
Consider two hypothetical clubs with unchanged regulatory denominators of £150 million and £600 million. Their Premier League Green ceilings are £127.5 million and £510 million; initial Red ceilings are £172.5 million and £690 million. If Club B competes in Europe and its UEFA denominator is also £600 million, UEFA’s separate 70 per cent limit is £420 million, below its League Green ceiling. The systems use different definitions and reporting periods; the illustration assumes comparable inputs. UEFA supplies no 30-point allowance, while domestic thresholds remain 85 and initially 115 per cent. Figure 3 compares these permissions. Permission still scales with revenue, but domestic headroom is not always usable. This essay does not estimate the spending required to close a sporting gap.57,58
The same percentage permits different spending
The League says the 15-point difference helps non-European clubs challenge European incumbents and cushions missed qualification. This stated rationale does not establish improved sporting mobility.59
The old PSR adjusted-loss allowance is not an annual squad-cost budget. Transfer accounting also separates spending permission from cash: sale profit is annualised under SCR, while acquisition costs and impairment follow their recognition rules. The worked spending and accounting appendix sets out these distinctions, alongside the allowance and levy calculations.57
Financial resilience and distribution
SSR separately tests working capital, liquidity and equity. Ability to meet obligations is distinct from the spending permission calculated by SCR; UEFA’s separate squad-cost rule is another constraint for European competitors.57
The Independent Football Regulator is a statutory body established by the Football Governance Act 2025. Its objectives are club financial soundness, the resilience of English football and heritage. Its licensing regime covers the top five men’s tiers; it does not administer SCR or decide a Premier League appeal. Final licensing rules and guidance were published on 1 July 2026. Clubs need a provisional licence ahead of 2027/28; the announced application window is 2 November 2026 to 26 February 2027. Mandatory conditions concern financial plans, governance, fan engagement and resources, with scope for additional conditions. This oversight sits beside league spending permission.60,61,62
Distribution connects resilience across the pyramid to access between divisions. The statutory backstop can address a failure by the leagues to agree revenue distribution, including parachutes; it does not yet prescribe the reform favoured here. The IFR’s State of the Game report is intended to supply evidence, with a draft planned for 2026 and the final report due by May 2027. Financial viability, spending permission, control, access and individual suitability cannot be collapsed into one verdict on competitive fairness.63,64
Individual suitability
Individual suitability asks who may continue to own or run a club. Two regimes coexist. The Premier League’s Owners’ and Directors’ Test remains operative. It is not limited to prospective appointments: Section F permits disqualification of incumbents and requires resignation or steps to cease being a Director where its conditions are met. The IFR’s statutory regime has broader suitability criteria and its own ownership-removal powers. Neither is an automatic consequence of a finding against the club.26,60
The IFR’s amended ODSE rules took effect on 5 May 2026, following incumbent powers introduced in December 2025. Owners require honesty and integrity and financial soundness; officers also require competence. Prospective-owner assessments additionally examine source of wealth and resources to support the proposed plan. Incumbents are not automatically retested as a class. Sections 34–35 require information giving grounds for concern; the guidance distinguishes that threshold from proving unsuitability and excludes unsupported speculation as a sufficient basis. Material changes must be notified.65,66
Rules 4.2(g)–(h) expressly make disciplinary action, misleading a governing body and non-cooperation relevant where they concern the individual or a sporting entity they controlled or served in a position of responsibility. Club liability can therefore inform an individual assessment. It does not itself settle that person’s fitness. The assessment still needs evidence connecting the person’s responsibilities and conduct to the relevant criteria. A proposed negative finding allows representations; an adverse determination can lead to removal directions or disqualification, with further ownership-removal powers in specified circumstances. The Act provides internal review and appeals to the Competition Appeal Tribunal.65,66,60
The FCA comparison explains the method without importing its jurisdiction. FIT groups honesty, integrity and reputation alongside competence and capability and financial soundness. FIT 2.1.3 includes regulatory criticism of a business with which a person was involved, as well as candour in dealings with regulators. It requires a contextual assessment of the individual and responsibilities, rather than automatic rejection on a disclosed event. The football rule expressly ties the sporting-entity connection to control or a position of responsibility. Similar assessment language does not make the regimes procedurally identical.67,68
On 30 September, IFR chair David Kogan said league findings could inform the use of suitability powers where there was clear evidence of individual wrongdoing, but that the IFR would await further developments because City’s proceedings remained ongoing. That is its stated handling of this case, not a statutory rule that every league appeal must finish before the IFR can assess an incumbent. The statement neither orders an executive’s removal nor requires an ownership sale. A failed club appeal would not itself supply either determination.69
Policy and limits
The immediate priority is a negotiated distribution settlement combining time-limited adjustment aid with predictable support for clubs without parachutes. Publish SCR allowance-use data before widening exceptions, and retain credible accounts, consistent valuation and supporter representation. These are policy priorities, not demonstrated effects.
The parachute evidence needs the same distinction at the point of reform. Full removal changes 11 of 40 modelled automatic-promotion places; removing the briefing’s defined excess changes two. The latter is the closer comparison for retaining adjustment support while reducing excess wage support. Neither result measures how many promotions parachutes actually decided or establishes the optimal size or duration of the bridge.46
Promotion rates, persistence of wage and revenue rankings, new European entrants and financial distress would test the opportunity claim. Neither the available evidence nor the German and NFL design comparisons establishes a causal effect on sporting parity.
The 1992 bargain retained promotion and relegation while shifting commercial control. SCR gives larger earners greater permission in pounds, including temporary investment ahead of revenue. That mechanism can preserve advantages; its sporting effect is not measured here. Survival, spending permission, control, access and individual suitability need separate answers. At the 1 October 2026 cutoff, City’s challenge and sanctions remained unresolved. This essay does not recommend a sanction; the sanctions hearing remained outstanding.