Impact of PSR and other financial rules on ownership

Our report last year included a summary of the Premier League’s profit and sustainability rules (PSR) and discussed both how owners have reacted to the rules and our predictions for the likely impact on future ownership of Premier League clubs.

In the 2023/24 season, both Everton and Nottingham Forest received points deductions for breaching PSR, which had a notable impact on the relegation battle. In January of this year, the Premier League announced that it had not charged any clubs for breaches of PSR for the 2023/24 season, but, in May, Leicester City was charged for alleged breaches and, throughout the season, financial restrictions imposed by football’s governing bodies continued to dominate the headlines.

In relation to PSR specifically, it was reported that a large number of clubs, including Manchester United, Newcastle United and Aston Villa, had complained that the rules prevented them from signing players during the January 2025 transfer window. The Premier League had planned to replace PSR with certain squad cost ratio and top to bottom anchoring rules but, in February 2025, it opted to continue with PSR for at least one more season, having faced legal threats and challenges on several fronts, including from the PFA.

Similarly, whilst a verdict on Manchester City’s 115 charges continued to be delayed, the club claimed a legal victory over the Premier League in February 2025 with the ruling that the Premier League’s associated party transaction rules were void and unenforceable.

The Premier League also received pushback from clubs in their reported effort to amend the rules that allowed Chelsea to use revenue from selling two hotels to its ownership group in its PSR calculations (and therefore avoid sanctions). The Times reported that the Premier League failed to receive sufficient support from clubs to put their proposal to a vote at the league’s annual general meeting on June 4, 2025.

PSR is clearly at the forefront of owners’ minds; on completion of The Friedkin Group’s (TFG) takeover of Everton, Marc Watts, the president of TFG and executive chairman of Everton, commented that “PSR remains a limiting factor in the short term”. Everton announced in April 2025 that US billionaire Christopher Sarofim had joined its ownership group as a minority shareholder, which was reportedly with a view to giving the club access to broader sources of funding, and it has been reported that further minority investments in the club are expected.

Elsewhere in the Premier League, Newcastle United has reportedly launched “Project 2030”, a plan by their owners to become a powerful force in English and European football, which again demonstrates how owners are having to adapt their approach in order to compete at the top level (in contrast to clubs such as Chelsea and Manchester City which were less restricted in the strategies they adopted following changes in ownership in the 2000s).

Deloitte’s annual Football Money League report focuses on the top revenue generating clubs in world football and, with the Premier League and UEFA imposing strict penalties for lack of compliance, a particularly prevalent focus on revenue generation can be seen across world football. The 2025 Deloitte report notes that several clubs, including Liverpool and Olympique Lyonnais, identified the impact of infrastructure investments as a key driver of revenue.

In contrast, Barcelona fell to sixth in the rankings following a decrease of €40 million in total revenue having had a €63 million decline in matchday revenue due to the Spotify Camp Nou being redeveloped. In recent months, Manchester United confirmed its ambition to build a new stadium, Aston Villa announced plans to expand its stadium to over 50,000 capacity and Bournemouth announced that it had agreed a deal to buy back the Vitality Stadium with plans to expand it.

Elsewhere in the Premier League, Newcastle United and Chelsea are also rumoured to be interested in new stadia. Crucially for Premier League clubs, spending on infrastructure is exempt from PSR,¹ so this offers owners an opportunity to increase future revenue streams and potentially “PSR proof” their clubs’ futures whilst not immediately falling foul of the rules immediately so long as they can afford the short-term commitment.

This is perhaps particularly the case given broadcasting revenues seem to have stabilised. The Deloitte Football Money League 2025 report stated that there was “no uplift in the broadcast revenue (€4.3 billion) cumulatively reported by Money League clubs in 2023/24”, partly due to the fact that each of the “big five” leagues remained in the same domestic broadcast cycle as the preceding season.

Indeed, the “big five” leagues are entering a period of stable revenues due to longer-term domestic media rights deals through to at least 2027. There is even evidence to suggest that broadcasting revenues could fall in the coming years – in February, DAZN withheld half of a payment due to Ligue 1 for its domestic rights having initially agreed to pay €400 million a year for the French rights to eight of the nine Ligue 1 fixtures each weekend. DAZN subsequently paid the remaining amount due to Ligue 1 but has reportedly agreed to terminate its partnership with Ligue 1 in May with France’s Professional Football League reportedly launching a tender process for its new in-house Ligue 1 channel. In the UK specifically, football fans are reportedly paying almost 60 percent more than they were five years ago to watch the 15 most popular tournaments and leagues and that only 1 percent of football fans are now paying for all the services required to watch such competitions, which suggests the current broadcasting deals may not be sustainable long term.

However, despite the increased focus on, and often resistance to, PSR and other financial restrictions from owners, in our report last year, we predicted that PSR could lead to higher valuations for football clubs going forward as they become more profitable, and it can certainly be argued that PSR is having the intended impact.

As discussed above, clubs are clearly placing greater emphasis on financial resilience, which can only be seen as a positive. On the pitch, clubs such as Nottingham Forest and Brentford exceeded expectations finishing seventh and 10th respectively, whilst Aston Villa finished sixth in the Premier League in the 2024/25 season and reached the quarterfinals of the Champions League, having finished fourth in 2023/24. With this in mind, it could be argued that PSR has “levelled the playing field” and allowed clubs from outside the traditional “big six” to compete, with the likes of Brighton, West Ham, Nottingham Forest and Crystal Palace qualifying for European competition in the last few years, which will inevitably increase the valuations of these and other similar sized clubs.

Linked to this, a report from the Financial Times in February 2025 stated that European football club takeovers had halved in a year, owing mainly to high valuations, legal disputes and the slowdown in the market for broadcast rights. PSR has undoubtedly impacted on club valuations and we expect to see this trend to continue in the coming years, particularly as it could still be argued that European football clubs are undervalued when compared to US sports teams; in December 2024, Forbes released its list of the world’s most valuable sports teams and 22 of the top 25 teams were based in the US.

Our 2022 report also discussed the rise of minority stakes and consortia and this is a trend we have continued to see over the past few years, owing largely to increased valuations in football clubs. An Off The Pitch report in February 2025 also references a decline in majority stake deals from 2023 to 2024; of the mergers and acquisitions deals tracked by Off The Pitch, the total transaction value fell from €3.08 billion in 2023 (€1.56 billion excluding Manchester United’s sale) to just €878.5 million in 2024, with average deal size falling from €154 million (€82.2 million without Manchester United) to €43.9 million. The report also discussed how football investment is transitioning from emotional or opportunistic acquisitions to strategic, well-researched decisions.

With this in mind, it could be said that PSR is not only having a direct impact on the valuations of the clubs, and therefore the kind of M&A deals that are completing, but also the types of investors that are attracted to the industry.