⚽️ PSR is Changing and It's Not Good for Chelsea FC

Thank you to the new subscribers to the TLP newsletter.

There has been a marked shift in my follower base in the month of April which is extremely gratifying for me to see so a big thank to everyone reading this today.

We are about to embark on packed summer of sport and I am excited about the content I am going to bring to you so welcome aboard. Glad to have you here.

Today, we discuss the Premier League’s changes to FFP PSR and how this will shape future of our favourite clubs.

Premier League Clubs have had enough.

They have finally voted to change the Financial Fair Play Profit and Sustainability Rules in the UK after years of complaints.

The new scheme is similar in principle but is now much simpler to digest.

• If a club is in Europe, they will be able to spend 70% of club turnover on player and staff wages

• If a club is NOT in Europe, they will be able to spend 85% of club turnover on player and staff wages

It’s that simple.

The only other thing to consider is that the actual calculation is Club Turnover + Profit from Player Sales combined, which is perfect for smaller clubs that tend to sell well (think Brentford and Brighton).

With this, two obvious questions arise:

1. Why the changes?

2. Which clubs are better/worse off with the new arrangement

Lets start with Number 2 and we will digest two examples.

Example #1 Manchester City BETTER OFF

• Man City Club Turnover: £713.1m

• Man City Club Wage Spend Cap: £560m (When taking in profit from player sales)

• Man City Current Spend: £423m

• Man City Delta: +£133m 

As you can see Manchester City have healthy wiggle room on top of their already healthy Premier League record wage bill.

A scary thought to think they can add to this team substantially under the new rules.

However: club #2

Example #2 Chelsea WORSE OFF

• Chelsea Club turnover: £481.9m

• Chelsea Club Wage Spend Cap: £461.5m (When taking in profit from player sales)

• Chelsea Current Spend: £532.9m

• Chelsea Delta: -£71.5m

Chelsea are in a bad way and must act quickly to correct their situation.

Chelsea are the perfect reason as to these measures are in place which brings us neatly to Question 1 from earlier. FFP discussions appear boring in nature but a report published in 2021 showed:

• 63 of the 92 clubs in the English Football League are loss making

• Many clubs are reliant on cash injections from their owners

• Many clubs owe other clubs significant amounts of money (via outstanding payments from transfers) adding to a big risk of a “house of cards” collapse

Scary statistics.

These rules will form the financial benchmark for our favourite clubs over the coming years. Thankfully, this format of the rules do not come into effect until the 2025/2026 season so Chelsea have some time to right their misgivings.

But they must act soon.

I will leave you this week with a cracking tweet I saw last week about world #1 golfer Scottie Scheffler.

The mad thing is how much more golfers earn now than they did previously.

Crazy to see.

See you next week.