Analysis
Dynamic SCR: a spending rule with a destination
The Premier League's clubs earned about £7.5bn in 2025/26 and lost about £880m doing it. Dynamic SCR keeps the squad cost ratio, and gives it a destination: a league-wide profit before tax of 3% of revenue.
Figures as of 15 October 2026, Orange Engine release V2BX · Latest figures · What the engine does not capture
The Premier League’s clubs earned about £7.5bn in 2025/26 and lost about £880m doing it. Those are the Independent Football Regulator’s estimates, from the draft State of the Game report it published for consultation on 13 October. More money has not meant profit: in every one of the last six seasons the league as a whole has made a loss.
This season the League replaced its old profit and sustainability rules with a squad cost ratio: a club may spend up to 85% of its revenue on its squad, with an allowance of 30 percentage points above that before sanctions start. It is a better rule than the one it replaced. But it has no destination. Nothing in it is designed to make the league profitable, and a club can comply with it and still lose money every year.
Today the Orange Ledger publishes the alternative I have been working on: Dynamic SCR. It has its own permanent page, the Dynamic SCR page, with interactive charts, worked examples and the full model results, and it will be updated every season. This article explains why I think it is needed.
The squad takes almost everything
Our estimates for the 1 March 2027 squad cost test put the twenty clubs’ combined ratio at 75.8%. That sounds comfortable under an 85% limit. But the rule counts, as part of revenue, the three-year average of profit from selling players. That is a legitimate part of the rule; the question is how much clubs depend on it. Without it, the figure is 87.3%. For the fourteen clubs outside the traditional big six it is 96.6%: almost every pound they earn, with player sales filling the gap.
The rest of the bill has to be paid from what is left. The regulator estimates that a Premier League club spends, on average, about 39p of every pound on costs outside the squad. The two figures come from different sources and cannot simply be added up, and they don’t prove on their own that clubs can’t cover their other costs. The reported losses establish the overall shortfall; these ratios help explain the pressure behind it. The gap is filled by selling players, by owners and, increasingly, by borrowing: interest-bearing debt across the top four divisions rose from about £2.8bn to £4.1bn in four years, and the interest paid on it from about £97m to £455m.
Why a fixed number can’t fix it
The most important figure in the regulator’s report may be this one: between 2021/22 and 2025/26, Premier League clubs’ costs outside the squad rose by about 68%, against about 33% for player wages. Revenue grew roughly 36% (using Deloitte’s figure for 2021/22 and the regulator’s estimate for 2025/26).
If costs outside the squad keep growing faster than income, the share left for the squad has to keep shrinking just to stand still. Any fixed limit is a bet that this won’t happen. That includes the 85% in today’s rule, and it includes the 60% I proposed myself in Part 5 of our regulation series. A limit that delivers a profit today can deliver a loss five years from now.
What Dynamic SCR does
Dynamic SCR keeps the squad cost ratio, and gives it a destination: a league-wide profit before tax of 3% of revenue.
- A target limit, recalculated every season. From the clubs’ latest accounts, the League calculates the limit that would deliver 3% if every club spent to it. If costs outside the squad rise, the target falls with them.
- A permitted limit that moves towards it by at most 5 percentage points a year. Players are under contract and transfer fees are written off over years; clubs need time. The limit actually imposed starts at today’s 85% and steps towards the target.
- It only tightens by itself. Once the target is reached, the limit does not loosen automatically. Who could loosen it, and when, is a question I leave open on the page; the principle is that it should take a deliberate, accountable decision.
- It squeezes the strongest, inspired by the way Formula 1 gives its most successful teams less wind-tunnel time. The five clubs with the best three-season record lose 2 percentage points a year from the fourth season, down to 10 percentage points below the base. Newly promoted clubs start 10 percentage points above the base and come down 2 a year.
- It tightens enforcement. The allowance above the limit is halved from 30 percentage points to 15. A club that uses it all has none the following season, and earns it back at 5 points per compliant season, not 10. And the levy on overspending should be steeper than today’s.
What the model says
We ran Dynamic SCR on all twenty clubs of 2026/27 and carried them forward eight seasons. It is a static scenario, not a forecast, and the page sets out every assumption. Three results stand out.
If clubs spend to their limits, the league reaches 3% in 2030/31 on our bottom-up estimate and a year later under our IFR-calibrated starting case. The 3% destination is built into the calculation; the glide path determines how quickly the model reaches it. So I don’t count it as proof. The other results are more informative.
The shrinking allowance matters. If overspending clubs only cut back as far as the edge of their allowance, and that allowance never shrinks, the league does not reach 3% within eight seasons. Let the allowance shrink as Dynamic SCR intends, and assume clubs with none left spend within their limit, and the league gets there: in 2031/32 on our bottom-up estimate, 2033/34 under our IFR-calibrated starting case. The enforcement design is not a detail.
If costs outside the squad keep outrunning revenue, the limit has to keep falling, and even that may not be fast enough. We assumed (as a test, not a forecast) that those costs keep growing faster than revenue at the pace of the last four years, with clubs spending to their limits. The limit falls to around 50% to 55% by the eighth season, well below the 60% I once thought would be enough. Even so, the target slips to 2032/33 on our estimate, and is not reached within eight seasons under our IFR-calibrated starting case: 5-percentage-point steps cannot fall fast enough to keep up. A fixed rule would need to be rewritten again and again in that world. Dynamic SCR follows the costs down by design, and the test shows where even that has limits.
What it won’t do
A profitable league can still contain loss-making clubs: in our model, where clubs over their limit cut to it, seven or eight clubs are still losing money in 2030/31 (the higher figure uses an illustrative split of the regulator’s totals across clubs). That is why Dynamic SCR sits alongside the League’s solvency tests, not instead of them. Nor can a rule tied to revenue work if revenue can be inflated: it needs continuous, statistical monitoring of commercial deals, not investigations years after the fact.
And the model cannot tell us how owners will behave. What it shows is a plausible route to a profitable Premier League under stated assumptions, and how long the adjustment takes. It also shows when the target stays out of reach. The route needs time, enforcement that bites, and a limit that is willing to keep falling.
Football has spent fifteen years writing rules to stop clubs ruining themselves. It is time for a rule that aims for the league to make money. Read the full proposal, explore the numbers and tell me where you think it is wrong: the Dynamic SCR page.