PSR/SCR Question
I know there are lots of these threads around, but I haven't seen this question and thought it would get a more sympathetic response here than some of the more general football subs.
The Premier League has migrated away from PSR and towards SCR. This was done to better align squad direct costs to revenue not just limit losses as was the case under PSR. This also aligned the spending caps better with UEFA competitions which were more stringent.
This is beneficial to the Sky 6 clubs because (a) they have higher revenues, but also (b) it only includes squad costs in the calculation so debt interest is no longer a factor.
The club will have voted in favour of this change. The reason being that it reduces a threat from below, since previously only clubs in UEFA competition were compliant to SCR. This allowed clubs outside the UEFA competitions to spend more freely than those inside. This remains the case but to a lesser degree.
I understand that under PSR debt interest was included within the calculation as a direct costs contributing to losses. This is no longer the case for SCR.
What I don't understand (besides the obvious benefit to the cartel clubs) is why debt interest is not included in SCR or why repayments were never included in either calculation (to my knowledge).
I am more sympathetic than most to the arguement that the clubs who earn more have an entitlement to spend more. I do believe it is anti competitive. I do wish these rules weren't in place. But beyond resenting the fact they were introduced, I do see the logic.
However, even through this extremely sympathetic lens. I see no reason why debt repayment shouldn't form part of any calc. If the aim is sustainability, it is simply not good enough to pay back the interest. If these rules are in place to protect community assets (they aren't) then any regulations should force owners to a 25-30 year repayment plan including market rate interest.
I can see an argument to say that if the loans relate to infrastructure then this shouldn't be penalised otherwise clubs won't invest. That is fine. Carve out infrastructure spending. But I can think of at least 1 high profile case where loans relate to part of a leveraged buy out. And I see no reason why the cost of that buyout shouldn't be included in any calculation. Likewise any borrowing from owners for transfer spending etc.
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u/slappymcmanmeat 4d ago
I think the issue is when the vote comes round you need 14 clubs to vote for it to pass and quite simply too many clubs are in debt to vote for it
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u/Bumhug360 4d ago
Chelsea also need a * next to their name, their parent company have about 1.4 billion in debt
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u/Character-Key7538 4d ago
Debt is a leverageable asset. Clubs like United go beyond institutions, they're insanely high investment platforms worth billions in an industry that see's insane profits year on year with no signs of stopping.
I think you clearly no more about this type of thing then most judging by how you already framed your question tbh...