Explainer: “THE PSR TRANSFERS” (The Mini EPL Transfer Deadline)

On the 6th of June 2024, it was reported that 6 EPL clubs would have to sell a player or 2 before June 30th to be able to comply with the “PSR” rules.

The clubs mentioned were Chelsea, Aston Villa, Everton, Newcastle, Nottingham Forest and Leicester City.

Since then, we’ve been seeing some “funny moves” among these clubs but what is “PSR” and how does it affect these clubs?

PSR means “Profit & Sustainability Rules”. They’re financial rules and regulations aimed at making sure EPL clubs don’t overspend or accumulate excessive debt.

EPL clubs are allowed to make a loss of up to £105Million over a 3-year period or less if they spend some time outside the EPL like Leicester City recently got promoted but anything more, you will be breaking the PSR rules.

So these clubs are now signing players from each other to be able to get around and make a profit reducing their annual loss.

Let me break it down with Aston Villa signing Ian Maatsen for £37.5M and Chelsea signing Aston Villa’s Omari Kellyman for £19M.

Now these two players are “ACADEMY PLAYERS” so they will represent “PURE PROFIT” on each club’s balance books.

What is Pure Profit?

It is when a club sells a player from the academy who wasn’t “bought”. Ian Maatsen doesn’t have value he was bought on Chelsea books because he wasn’t signed as a teenager, so any money Chelsea makes from him is “Pure Profit”.

If it is a player that was signed for a certain amount, you will have to minus the amount he was bought for from the selling price to know if it is a profit or loss.

The likes of Mason Mount, Hall, and now Maatsen are “Pure Profits” but Hazard is a “Net Profit” because we signed him for £32M and sold him for £88 making a profit of £56M.

And finally, they can amortize the transfer fee for example, Aston Villa wants to give Maatsen a 6-year contract so which means 37.5M divided by 6yrs which is £6.25M.

So in their financial book this year, they paid £6.25M for Maatsen but made a profit of £19M for Kelly they sold to Chelsea so they’ve made a profit of £12.75M.

Hope it’s making sense to you guys.

So you will keep seeing clubs like Everton, Newcastle, and Leicester selling their homegrown academy players.

Remember Everton has already signed Aston Villa’s midfielder, Tim Iroegbunam for £9M.