Arsenal
Aston Villa
Chelsea
Crystal Palace
Everton
Fulham
Liverpool
Manchester City
Manchester United
Newcastle United
Nottingham Forest
Southampton
Tottenham Hotspur
West Ham United
Wolverhampton Wanderers
News
Newcastle United set for ‘£255m budget’ amid PSR twist
Newcastle United supporters have become all to familiar with Profit and Sustainability Rules, Associated Party Transactions and Fair Market Value in recent years.
While the average member of the Toon Army historically had no interest in Premier League fina🤪ncial jargon, these regulations are now a constant concern under the Saudi Public Investment Fund.
PIF have assets of nearly £800bn and want Newcastle to become the next Man City or Paris Saint-Germain, but their ambitionওs are tethered to football’s spending rules.
PIF have already pumped hundreds of millions in🍸to the Magpies’ recruitment budget without generating much return in the way of sales.
Their spending almost caught up with them this summer when they only narrowly dodged a PSR breach before the deadline on 30th June.
But the regulatory landscape in the Premier League is complex at present and Newcastle are not entirely sure what framework they 🔯will be required to operate in from next season.
The the two greatest sources of uncertainty are the implemen🍬tation of a squad cost control ratio that links expenditure to revenue and Man City’s case against the league regarding associated-party deals.
To explore the potential effects of both on Newcastle, TBR spoke exclus💎ively to Liverpool University football finance lecturer and Price of Football a꧋uthor Kieran Maguire.
Newcastle will be ‘secretly delighted’ if Man City succeed in case against Premier League
In what is widely viewed as a counterpunch to the 115 charges levelled at the club, Man City have made a legal cl꧑aim against the Premier League relating to how it treats commercial deals with related-party deals.
City allege the Premier League rule implemented followiཧng PIF’s takeover of Newcastle in 2021 stipulating that all commercial deals must be assessed for fair market value is anti-competitive.
In the latest twist, City have reportedly im☂plied a conflict of interest relating to commercial ꧃relationships between Premier League clubs and Nielsen Sports, the company employed by the Premier League to assess fair market value.
The case, which is currently being heard, could have major implications for the likes of Newcastle who have signed a number of ಌcommercial deals with companies in the PIF network.
If City’s claim is successful, it would effecꦬtively give PIF free reign to funne🐻l as much cash into Newcastle as they want.
“Newcastle will be keeping a watching brief in case the APT are deemed anti-competitive,” Maguire said.
“Should the ruling go in Man City’s favour, they will be secretly delighted but publicly neutral.
“They will substantially benefit if it does go in Man City’s favour because it would effectively allow them to sign contracts of unlimited value, which they can’t do at present.
“At the same time, Newcastle have been very professional since the new owners came in and they will therefore be considering the potential implications from a UEFA perspective.
“Their aim is to be qualifying for the Champions League, so it would be a bit of a Pyrrhic victory if the Premier League rules change but they are shackled by UEFA’s rules any way.
“I don’t think they will publicly champion any changes to the rules. Privately, they be over the moon if City win.”
How would a squad cost control ratio affect Newcastle?
In 2023-24, UEFA began phasing in a new set of financial controls that will eventually limit clubs to spending a maximum of 70 per cent of their revenue𝓰🍎 on wages, transfers and agent fees.
The Premier League will t🌺rial a similar squad cost control system on a non-binding basis from 2024-25, w♚ith the cap set at 85 per cent.
That is contrast to the existing PSR framework🐟 that limits the likes of Newcastle from losing over £105m over a rolling three-ꦬyear period.
So, how🐻 would Newcastle fare under the new system? Would it give them any more room to manoeuvre in the t🎉ransfer market? Maguire is not so sure.
“I think what Premier League clubs want to do is get a free hit to see what the potential implications of the squad cost rules would be.
“It makes sense to introduce squad cost control rules if UEFA have a similar systems. There is no point in having two sets of rules based on two different sets of criteria.
“When I did the sums, it doesn’t make a huge amount of difference. The existing financial gaps will still be enforced.
“Man City have got revenue of over £700m, If they can spend 70 per cent of that, they would have a £490m budget.
“Newcastle’s revenue last season will probably be in the region of £300m for last season. Even if they can spend 85 per cent of that as the Premier League is proposing, that is £255m, so they would have just over half of City’s budget.
“Newcastle are starting half a lap behind Man City under current PSR rules because they have a revenue advantage
“And that situation will still be the same under a squad cost rule. It’s not a significant change and it is geared towards reinforcing the existing advantages that some clubs have.“
- READ MORE NEWCASTLE FINANCE NEWS: Newcastle eye🐻ing £165m bonanza amid bold prediction from exit-bound Amanda Staveley
Newcastle finance: What about UEFA’s spending rules?
Newcastle qualified for the 2023-24 Champions League, meaning they had to comply with UEFA’s stricter set of financial controls👍 compared to the Premier League system.
And with PIF’s long-term ambition very much to be a regular in the competition, the club will be monitorin𓂃g how European football’s governing bo⛄dy enforces its rules.
Maguire explored the intricacies of UEFA’s system and how they are policing clubs’ acc✅ounts.
“UEFA’s squad cost control ratio is being assessed on a calendar basis rather than on a season-by-season basis, in contrast to the Premier League.
“The reason given, which I do think has some merit, is that clubs will have to submit their accounts by 31 March.
“That would allow UEFA to make any expulsions in time for the following season’s competitions if a club is found to have breached the rules.
“If Newcastle have one season in Europe, they will take into account the half season that they weren’t in Europe and make their assessment based on that.
“Significantly, this also means that the accounts the clubs send to UEFA will not have been audited. I think that could cause problems because auditors do keep clubs in check.”
