Explainer · evergreen
PSR and points deductions: the rules behind the headlines
In one line: The Premier League's £105m rule, what counts as a loss, the add-backs, and how breaches become deductions — the mechanics, dated honestly.
When a club is charged under the Profit and Sustainability Rules (PSR), the headlines say “£105 million rule” and the arguments start. The mechanics underneath are less dramatic and more interesting — and they explain why identical losses can produce a deduction for one club and a shrug for another.
The rule in one paragraph
The Premier League assesses every club's Adjusted Earnings Before Tax over a rolling three-year period. Losses up to £15 million across that window need no explanation; losses up to £105 million are permitted if the owners can show the excess is covered by secure funding. Beyond that, the club is in breach. The threshold drops by £22 million for each season spent in the Championship inside the assessment period — which is why a newly promoted club faces a much tighter ceiling than a club that never left. These are the Premier League's own numbers, published in its handbook and statements.
What doesn't count: the add-backs
The “Adjusted” in Adjusted EBT does heavy lifting. Costs the league deems in the wider interest of the club and the game are added back before the total is struck: investment in academies and youth development, women's football, community programmes and infrastructure, plus depreciation of tangible assets. Two clubs with identical headline losses can therefore sit on opposite sides of the line — one spent on a training ground and a women's team, the other on wages. This is also why selling academy graduates looks so powerful on the books: a homegrown player carries little or no amortised book value, so the sale lands as near-pure accounting profit (the same arithmetic the amortisation explainer and its calculator show line by line).
From breach to deduction
A breach is referred to an independent commission, which decides the sanction. Deductions are not automatic or fixed-size: commissions weigh the size and duration of the breach, the club's cooperation, whether finances were misstated, and precedent from earlier cases — which is why Everton's and Nottingham Forest's 2023–24 cases produced different numbers for breaches of different shapes. Deductions apply immediately in the current table; appeals go to a separate board. UEFA runs a parallel but distinct system (squad-cost rules targeting 70% of revenue from 2025/26), so a club can be compliant in one and not the other.
Why it changed behaviour
PSR is why modern windows look the way they do: multi-year payment plans spread the accounting load, player sales are timed before the assessment cut-off, wages are structured with achievable bonuses, and loan deals with obligations quietly become permanent. None of this is loophole-hunting per se — it is clubs managing to the rule they are given, while the league debates replacing PSR with squad-cost limits modelled on UEFA's. Rules of the road: the numbers here were checked against the Premier League's published statements as of 2026-09-25; the exact handbook wording evolves, and club cases are decided on their own facts.
Sources
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