PSR - Cost of living allowance. (16 replies)
Apologies if I’m posting something that’s commonly known, but reading an Athletic piece this morning on Wrexham’s financial picture and it mentions ‘cost of living allowance’ within PSR.
Apparently clubs can lose £45M within the 2024/206 window.
They estimate Wrexham could lose £34M next season if they really went for it.
An extract below and I know for some it’s day 1 at school stuff, but hopefully explains well for some trying to catch up.
How much can Wrexham spend this summer?
Wrexham will now enter their fourth consecutive season of having different profit and sustainability rules (PSR) to abide by. In the National League, there were no rules; in League Two, they were required to keep salary costs to 50 per cent of turnover; in League One, that jumped to 60 per cent; and in the Championship, soft salary caps are done away with and clubs are instead limited in the amount of money they can lose, after deductions for allowable expenditure.
Financial rules over the past two seasons have caused little in the way of impediments because they allow equity injections from shareholders in their calculations, meaning if an owner is willing to provide funds they don’t ever want back, clubs can spend as much of it as they please.
If regulation has been light touch to date, it will harden next season. The Championship’s PSR rules focus on limiting losses (much like the Premier League’s), with clubs playing in the EFL only permitted to book up to £13million a season in PSR losses. In 2025-26, Wrexham will have, plainly, spent the current and previous two seasons in the EFL, so they’ll be limited to £39m in PSR losses across the last three seasons.
Even that isn’t quite the full story. Those PSR losses are calculated after removing allowable expenditure on youth development, community development and women’s football, alongside depreciation and non-player amortisation costs, but the state of the UK economy in recent years also compelled the EFL to go a bit further. In 2024-25, clubs can adjust their PSR calculation for a ‘Cost of Living allowance’ of £2.5m, which will rise to £3.5m for next season and beyond.
Wrexham, alongside their fellow 2025-26 Championship clubs, will effectively be able to lose £45m across the 2024 to 2026 PSR cycle, after the standard deductions for allowable expenditure.
Wrexham’s 2023-24 loss of £2.7m will be included in next season’s PSR calculation, but even if this season’s loss in League One was double that of a year earlier, we estimate Wrexham could lose £34m in the Championship next season and still remain PSR compliant.
Apparently clubs can lose £45M within the 2024/206 window.
They estimate Wrexham could lose £34M next season if they really went for it.
An extract below and I know for some it’s day 1 at school stuff, but hopefully explains well for some trying to catch up.
How much can Wrexham spend this summer?
Wrexham will now enter their fourth consecutive season of having different profit and sustainability rules (PSR) to abide by. In the National League, there were no rules; in League Two, they were required to keep salary costs to 50 per cent of turnover; in League One, that jumped to 60 per cent; and in the Championship, soft salary caps are done away with and clubs are instead limited in the amount of money they can lose, after deductions for allowable expenditure.
Financial rules over the past two seasons have caused little in the way of impediments because they allow equity injections from shareholders in their calculations, meaning if an owner is willing to provide funds they don’t ever want back, clubs can spend as much of it as they please.
If regulation has been light touch to date, it will harden next season. The Championship’s PSR rules focus on limiting losses (much like the Premier League’s), with clubs playing in the EFL only permitted to book up to £13million a season in PSR losses. In 2025-26, Wrexham will have, plainly, spent the current and previous two seasons in the EFL, so they’ll be limited to £39m in PSR losses across the last three seasons.
Even that isn’t quite the full story. Those PSR losses are calculated after removing allowable expenditure on youth development, community development and women’s football, alongside depreciation and non-player amortisation costs, but the state of the UK economy in recent years also compelled the EFL to go a bit further. In 2024-25, clubs can adjust their PSR calculation for a ‘Cost of Living allowance’ of £2.5m, which will rise to £3.5m for next season and beyond.
Wrexham, alongside their fellow 2025-26 Championship clubs, will effectively be able to lose £45m across the 2024 to 2026 PSR cycle, after the standard deductions for allowable expenditure.
Wrexham’s 2023-24 loss of £2.7m will be included in next season’s PSR calculation, but even if this season’s loss in League One was double that of a year earlier, we estimate Wrexham could lose £34m in the Championship next season and still remain PSR compliant.