Which clubs are restricted by PSR in the January Transfer Window? - part 1

In The Modern World

With apologies to the late, great John Lennon:

“So this is January, And what have you done?

Another transfer window, I hope you’re having fun.”

The question that I am asked most often by football fans is how much their club is able to spend in the transfer market, assuming that one or two new players will make all the difference to their team’s prospects.

The fact that around half of the transfers actually end in failure appears to be irrelevant to these eager beavers. This is especially the case in the January transfer window, as a purchase is frequently a panic buy, driven by the threat of relegation or possible failure to qualify for Europe.

An additional complication these days is the impact of the Premier League’s Profitability and Sustainability Regulations (PSR).

Apart from a few accounting nerds, nobody had been overly concerned about PSR in the past, but the regulations have now started to show their teeth, with the Premier League imposing points deductions on both Everton and Nottingham Forest for financial breaches, while it tried to do the same to Leicester City.

In fact, many clubs are briefing journalists that their hands are (unfortunately) tied by PSR, but is this really the case?

Common sense dictates that clubs are unlikely to advise all and sundry that they have no regulatory constraints, as that would place them in a poor bargaining position, so the question is which clubs are most at risk in terms of PSR?

To answer this question perfectly, we would need access to the accounts for the most recent 2023/24 season, so all figures would be available for the 3-year monitoring period used for the PSR calculation, but unfortunately very few of these have been published to date.

Therefore, we will have to prepare a forecast for 2023/24 for most Premier League clubs, but we should be able to make a reasonable estimate, as key drivers like on-pitch performance, player sales and purchases are already known.