What new Premier League financial rules could mean for Man Utd and Man City

The Premier League are set to introduce a new set of financial rules to replace the profitability and sustainability rules (PSR).

PSR could be replaced by a similar system to the one used by UEFA in their club competitions if the motion is passed at the Premier League's next annual general meeting in June. Instead of Premier League sides being allowed losses of up to £105million over three years under PSR, the new rules would allow teams to spend up to 85 per cent of their revenue on squad costs, such as transfer fees and wages. This is slightly more lenient than UEFA, with their cap set at 70 per cent.

The new rules could be in place by the summer and the change has been discussed during a season that has seen Everton and Nottingham Forest hit with points deductions. Tom Murray, a Sports Lawyer at Mishcon de Reya, has given his verdict on how the new financial rules could benefit Manchester City and Manchester United.

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"Interestingly, the Premier League have opted against adopting other measures introduced by UEFA, such as the 'net equity rule' which requires clubs to demonstrate that the difference between a club's assets and liabilities is either positive or has improved by at least 10% since the previous year,” Murray said.

"The idea behind squad cost rules is to restrict the amount of money that clubs can spend on items such as wages, transfer fees and agents' fees to a percentage of revenue. Critics of these rules will argue that they operate as a soft wage cap which reinforces the status quo and bakes in a system of