The English Football League (EFL) announced new Squad Cost Rules (SCR) that will cap Championship clubs' spending on players and managers to 85% of their income starting from the 2026-27 season [1, 2]. The SCR replaces the previous Profitability and Sustainability Rules, which allowed clubs to lose up to £105 million over a three-year period [1, 2].
Under the new framework, owners can still inject funds into their clubs, but owner funding is limited to £33 million over three years, with a maximum of £15 million per single season [1, 2]. The EFL said the SCR "limits clubs spending on player and manager-related costs (including transfer fees) to a set percentage of their income, alongside a limited level of owner funding" [1].
The SCR system has been operating "in shadow" alongside the existing regulations during the 2025-26 season as a transition toward real-time financial monitoring instead of assessments after the fact [1, 2]. This aims to create a simpler and more responsive system of cost control within the Championship. The framework also includes safeguards around commercial deals linked to owners or their associated parties to prevent circumvention of the rules [2].
A version of the Squad Cost Rules will be introduced in the Premier League for the 2026-27 season. The EFL said this will bring "closer alignment between the divisions" [1].
The EFL announced the approval of these new financial regulations on May 15, 2026. The SCR will officially take effect starting with the 2026-27 season for both the Championship and Premier League [1, 2].