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Newcastle United and PIF could now pull off £88m PSR trick as sources confirm Premier League green light
The Saudi Public Investment Fund (PIF) are the richest club owners in the world on paper – but that doesn’t mean very much when Newcastle United are anchored by Profit and Sustainability Rules (PSR).
PIF are trying every which way to carve out more PSR headroom. Newcastle are enjoying serious success in the commercial department, for example, thanks to the Saudis’ infrastructure investment and sway.
Eddie Howe’s side’s League Cup triumph will help in that department too. Sponsors are always willing to pay more to have their brand associated with success.
St James’ Park has become much more lucrative for the Magpies as well and, of course, with a new stadium being designed, Newcastle could double or even triple their takings through the turnstiles.
But even with those big strides forward and a high possibility of lucrative Champions League football next season, Newcastle will be at a big disadvantage to their rivals in the so-called Big Six.
As established brands globally, the two Manchester clubs, Liverpool, Arsenal, Tottenham and Chelsea all earn £200m-plus in commercial income, which immediately means they have a PSR head start.
What’s more, even when some clubs have exhausted their PSR quote in the transfer market, their accountants perform a few sleights of hands to balance the books.
However, there is – in theory – no reason why Newcastle can’t do the same, as University of Liverpool football finance lecturer and industry insider has explained in exclusive conversation with TBR Football.
Newcastle United have £88m PSR ‘get-out-of-jail-free card’
In their last set of accounts, which encompassed the 2023-24 financial year, Newcastle had £88m worth tangible assets on the books.
That’s things like property and equipment, physical things to which Newcastle have ascribed valued in the accounts and had validated by their auditors.
After Chelsea sold two hotels at Stamford Bridge – which had book value as intangible assets in their own accounts – to themselves to pass PSR, Newcastle could do the same.
And what’s more, the Premier League have not yet been able to close this loophole, as Maguire explains, although UEFA’s financial rules would be a different story.
“My sources say that they got no further than 11 votes to close this loophole and they needed 14,” said the Price of Football author, speaking to TBR.
“The reason for this is that there are a group of clubs who are operating in self-interest, and there is nothing wrong with that.
“They see the ability to sell the women’s team or property assets as a use-once get out of jail free card. If that allows them to dig themselves out of a PSR problem, so be it.
“The fans don’t care – they would rather see them go down that route and continue to spend resources in player recruitment and retention.
“I can absolutely understand what Newcastle are keeping all of their options open. If it’s okay for Chelsea to do it, why should Newcastle not be able to?
“From a consistency point of view, I think there is an argument to let other clubs to take advantage of this.
“The downside from Newcastle’s point of view is that Chelsea can exploit their geographical location in swanky West London in terms of property prices.
“But if Newcastle can make a quick £30m or £40m, then go for it. Equally, however, it makes a farce of the Profit and Sustainability Rules.”
Could PIF launch new sports team in Newcastle?
Newcastle’s plans for St James’ Park pose an interesting question – if they can get extra PSR headroom from staging non-football events, what about other sports too?
Tottenham generate eight-figure returns per concert run at their stadium and similar figures from hosting the NFL.
However, no Premier League club is yet to really push the boat out and start their own team in, say, basketball.
The NBA have seen a gap in the market here and have reportedly invited several English sides as well as the likes of Barcelona and Real Madrid to join a new European pro basketball league.
Significantly, it is said that PIF could provide funding for the new league. Could this be an opportunity for Newcastle to launch a branded NBA Europe team?
The fact that the Magpies are seemingly looking at building a new stadium altogether as opposed to expanding St James’ Park could also allow them to build the facilities needed to the exact spec.
This is the kind of question that the Premier League will need to address going forward, i.e., what is and isn’t football revenue for the purposes of PSR.
But as it stands, it could be one potential option for Newcastle, albeit a high-tariff one that would demand significant time and resources, as well prompting questions about club identity.