Clubs have agreed to new proposals for a financial cap, set to be determined by the amount of money earned in television rights by the lowest-earning club in the Premier League.

It will replace the current Profit and Sustainability Regulations (PSR) from the 2025/26 season if formally approved.

Everton and Nottingham Forest have famously fallen foul of the current rules, resulting in points deductions for both this season.

The Toffees were deducted 10 points in November for exceeding permitted losses by £19.5m over a period ending with the 2021/22 season. However, this was later reduced to six points following a successful appeal.

They were then docked a further two points earlier this month for another breach of the PSR rules.

Everton were said to have breached their allowed spending of a £105m loss over three seasons by £16.6m.

The Premier League and the commission initially asked to impose a five-point deduction on the club, but it was reduced to two.

Sean Dyche has since led the club to safety for another season in spite of the lost points.

Nottingham Forest were handed a four-point deduction in January and are now in the process of appealing as they continue to remain in a relegation battle at the foot of the table.

Under the current rules, Premier League clubs are permitted to make 'allowable' losses of up to £5m per season averaged over three seasons. 

That figure can increase to £35m per year based on individual owner investment, again over three seasons. Any transfer costs can also only be spread out over a maximum of five years.

The current model is seen as favouring the country's most successful clubs, such as the likes of Manchester City, who are able to compete on multiple fronts both domestically and in Europe.