Legal Challenges for Clubs in the 2025/26 Transfer Window

19 Dec 2025

By David Winnie, Partner, Head of Sports and Immigration at Gilson Gray.

The December 2025/January 2026 transfer window arrives at a pivotal moment for football governance. Clubs across the Premier League and wider European landscape are not only managing competitive and commercial pressures but also grappling with significant legal and regulatory developments.

Two themes dominate this window: tightening financial regulation through the Profit and Sustainability Rules (PSR) and the new Squad Cost Ratio (SCR), and the growing influence of competition law challenges that threaten to reshape the traditional transfer system.

Profit and Sustainability Rules: A More Restrictive Landscape

The PSR framework, which replaced the previous Financial Fair Play model, continues to evolve as the Premier League and other domestic leagues seek to promote financial stability. Clubs must demonstrate that their losses remain within prescribed limits over the assessment period. While the principles are familiar, enforcement has become more assertive, and the consequences of non-compliance increasingly severe.

Key issues for clubs this window include:

• Balancing investment and compliance: Many clubs are finding that the room for manoeuvre within the PSR limits has narrowed, requiring detailed forecasting and stress testing before sanctioning big transfers.
• Revenue recognition timing: How and when clubs record revenues, particularly from commercial deals and player sales, remains a crucial factor in meeting the thresholds.
• Dealing with historical losses: Clubs with legacy losses are under pressure to generate player-trading profits or reduce wage liabilities to avoid breaches.

In this environment, the role of sporting directors, legal teams and financial departments has never been more intertwined.

The New Squad Cost Ratio Rules: Containing Wage Inflation

UEFA’s Squad Cost Ratio rules continue to be implemented domestically in modified forms. These rules cap spending on wages, transfers and agent fees as a percentage of club revenue (phased in at levels such as 70% depending on competition).

For clubs, this presents several practical hurdles:

• Managing wage structures: High-earning squads must be carefully balanced against revenue trajectories, particularly for clubs outside consistent European competition.
• Contract renewals under scrutiny: Renewing contracts for star players can significantly affect a club’s squad cost ratio, forcing difficult decisions.
• Scope for strategic planning: Clubs with rising revenues enjoy greater flexibility, while clubs in transition risk being forced into reactive decisions.

The SCR rules add a new dimension to transfer strategy, requiring long-term financial discipline instead of focusing solely on a single window.

Competition Law Challenges: The Transfer System Under Pressure

The past year has seen a series of competition law challenges seeking to disrupt long-standing features of the football transfer market. While none have yet fully dismantled the system, they have created uncertainty and prompted governing bodies to consider reforms.

The most prominent issues include:

• Challenges to compensation mechanisms: Solidarity contributions and training compensation have been scrutinised as potential restraints on player movement.
• Agent and intermediary regulations: Restrictions on agent fees, caps and licensing have been attacked as anti-competitive, leaving clubs unsure about long-term compliance requirements.
• Contractual freedom for players: Claims that certain transfer rules limit player mobility – particularly for fringe or youth players – have gained visibility.

For clubs, the immediate challenge is operating within a system that may soon change. Transfer agreements, payment structures and player contract strategies must now factor in the possibility of regulatory reform driven by competition law outcomes.

Practical Considerations for Clubs This Window

Given the evolving regulatory landscape, clubs should prioritise:

• Robust financial modelling aligned with PSR and SCR requirements.
• Carefully structured transfer and wage agreements to preserve flexibility.
• Monitoring ongoing litigation and reform proposals that may reshape transfer market fundamentals.
• Interdepartmental collaboration between legal, financial and sporting leads to ensure compliant, sustainable decision-making.

Conclusion

This transfer window is defined by constraint and uncertainty. Financial regulations are tightening, and legal challenges to the transfer system are gaining momentum. Clubs that succeed in this environment will be those that combine strong regulatory awareness with strategic agility – balancing ambition on the pitch with prudence off it.