The 2023/24 Premier League season has been unique in many respects, as fans have seen clubs penalised for breaching spending limits not once, but twice. Everton have been hit with an eight-point deduction for two offences after breaching the division's profitability and sustainability regulations (PSR), and Nottingham Forest have also been handed a four-point deduction for a similar breach.

Manchester City's ongoing saga over 115 financial breaches continues to linger in the background too, but with clubs like Chelsea continuing to throw huge amounts of money around, the focus on spending in England's top division has never been higher. And now, a new model could be on its way in to replace the current guidelines.

In April, all 20 clubs in the English top flight voted unanimously to bring in rules which will cap how much a team can spend on players, something which encompasses transfer fees, agents fees, and wages for all teams. But how exactly will the new rules work? GIVEMESPORT are here to offer a complete breakdown of the regulations and explain when they will come into play.

How the New Measures Will Work

Premier League copying UEFA guidelines

Under old PSR guidelines, clubs were permitted to make a loss of £105 million over three financial years. Both Everton and Nottingham Forest were found to have overstepped that marker, although the latter was working with a lesser amount of £61 million due to them playing in the Championship for two of the seasons under review.

However, the new guidelines will work on a squad cost-to-revenue basis, where clubs will only be able to spend a certain percentage of their revenue each year on assembling their teams. As mentioned, that includes wages, any fees paid on amortised transfers, and agent fees.

The move by the Premier League brings them in line with financial regulations which have been introduced by UEFA. Any club playing in European competitions can only spend a maximum of 90% of their revenue on squad costs in 2023/24, and that total will be brought down to 80% in 2024/25, and then 70% in 2025/26.

However, the model for the English top flight will work slightly differently, as clubs competing in European competitions will have to follow stricter guidelines compared to those who are not. Teams in the Champions League, Europa League, or Conference League will only be allowed to spend a maximum of 70% of their total revenue, which is in line with UEFA's rules. Clubs which are not in European competitions, though, can spend up to 85%.

When are the New Rules Being Introduced

PSR reforms could be fully implemented by 2025/26

While all 20 teams have agreed to a deal in principle, the new rules will still require fine-tuning before their introduction. The earliest that the new PSR guidelines can be signed off is June 2024, at the Premier League's AGM.

That, however, does not mean that they will replace the existing system immediately. Should all go according to plan, then the new system will shadow the current rules during the 2024/25 term. For the 2025/26 season, though, the squad costs model will officially replace the old PSR system. That will ensure that both the Premier League and UEFA are operating on similar timelines.

Nine Teams Would Have Breached Rules Based on 2022/23 Estimates

Chelsea would have breached new guidelines based on last season's numbers

While the new rules would allow the bigger teams generating more revenue than every other club in the league to still spend heavily in the market, they too will now have to keep a closer eye on their books. Especially based on estimations.

Chris Weatherspoon, an accountant and policy advisor for Fair Game, has calculated what the squad cost limit for each team would have been, based on each club's turnover and income in 2022/23, while working out an average for every side's profit and loss on player sales between the years 2020 to 2023. He then offset that against squad cost estimates, which included wage estimates, player and agent amortisation costs and impairment for the 2022/23 season.

Based on the estimates, nine teams would have breached the amount that they were allowed to spend. Chelsea recorded the highest squad cost of £526.4m, thanks to their spending in the transfer market, while Aston Villa, Leicester City, Newcastle United, Leeds United, Everton, Wolves, Nottingham Forest, and Southampton also overspent.

Considering that some teams have continued to spend heavily in the current campaign, it only underlines the need for all 20 clubs to ensure that they work within their means if the new model comes in. Greater emphasis will have to be given to player sales to generate revenue, while a keen eye will be on the amount every club is spending, even more so than right now.

Should a team breach their limits, then punishments will operate on a sliding scale. Per The Guardian, any minor breaches of the new regulations will result in fines and other financial penalties, but more serious breaches will warrant points deductions, as seen this season.

What New Rules Mean for Man City, Everton and Nottingham Forest

All three teams won't be impacted by new system

While most teams will be thinking ahead and hoping to snuff out any threat of breaching the new financial thresholds, three teams, as previously mentioned, are already dealing with their own cases. However, according to Sky Sports, Everton, Nottingham Forest and Man City will still be judged based on current PSR guidelines.

The cases against the first two clubs are unlikely to coincide with the new rules being introduced. The Toffees have already appealed against their two-point deduction, which was handed to them in March 2024, and a Premier League statement has confirmed that they hope to resolve the case before the final day of the season in May. Nottingham Forest, likewise, have appealed against the decision to deduct them of four points, and reports suggest that they could discover the outcome of their case in April.

Manchester City's case, however, is more complicated, as they have been charged with breaking financial rules 115 times between 2009 and 2018. Their trial will reportedly begin in Autumn 2024, and a verdict is expected by the summer of 2025. However, the introduction of the new PSR model will not impact their case.

Although the new rules will have to be signed off on in the summer, it does appear that new guidelines are on their way as of right now. Based on the current estimations, clubs will be scrambling in the new term to get their finances in order. Otherwise, the consequences could be dire.