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News
PSR could be overthrown within days and let Newcastle United smash £105m barrier
PSR – formerly known as FFP – is theoretically the only thing standing between Newcastle United and the very best in world football.
The Saudi Public Investment Fund control assets worth over £700bn and are the richest ownership regime in the Premier League by an order of magnitude.
But Profit and Sustainability Rules, which limit clubs to losing a maximum of £105m over a rolling three-year period, have significantly limited PIF‘s ambitions on Tyneside.
Newcastle have been forced to concentrate just as much on increasing commercial and income and the potential redevelopment of St James’ Park as they have on deli𝓰vering on the♛ pitch as a result.
This anchor haꦦs naturally sꦚparked a debate across the game about the merits of PSR.
Many commentators – and indeed many Newcastle fans – believe PSR is less about profit and sustainability and more ꦍab🍷out insulating all but the very richest clubs against failure.
It was therefore welcome by many when Man City challenged a key compoꦦnent of the system earlier this year in the courts.
And there has been a major d🧸evelopment on this front in recent days.
- READ MORE: Newcastle in talks to sign 26-goal striker for free after he tells ꩵhis club he wants to leave
Premier League hearing could transform PSR system
While Man City’s ‘115’ charges hearing that begun last week has stolen all the headlines, another legal case has also preoccupied Premier Leagꦉue clubs in recent months.
In what is widely seen as a counterattack against the Premier League, City have challenged the institutions associated party transaction (ATP) rules.
Currently, the Premier League scrutinises every commercial deal signed by its member clubs for fair market value in order to prevent clubs from signing inflated deals and circumventi🅰ng PSR.
City argue that this is anti-competitive🦄, and Newcastle have sided with their fellow Gulf-state-owned club in the saga.
Industry publication The i🦩s now reporting that the outcome o꧟f the case is expected to be announced in the coming days.
If City are successful in overthrowing the APT rules, it is no exaggeration to say that it would alter the fabric of the Premier League and force them to completely rethink PSR and w🎉ider financial regulation.
Incidentally, the two cl🐈ubs play each other at the Etihad on Saturday afternoon.
Unfortunately for Newcastle, ho𒉰wever, suggest that the Man City’s chances of success in the case against the Premier League are very remote.
- READ MORE: Fabrizio Romano says the ‘important’ plan N🉐ewcastle are currently making involving Anthony Gordon
How will Newcastle fare under the Premier League’s imminent changes to PSR?
From next season, the Premier League are expected to introduce a new PSR system that will limit clubs to spending 85 per cent of revenue on wages, transfers and agent 🎃fees.
UEFA are already phasing in similar system, w♈ಌith the limit this season standing at 80 per cent and set to shrink to 70 per cent from 2025-26.
While there will also likely be also elements to consider, this cap will force clubs like Neꦦwcastle to reassess their approach to the spending rules.
For contex🍷t, Newcastle’s revenue in 2022-23, the last season for which fina☂ncial data is available, was £250m.
Their wage bill wa⛦s £187m, while their amortisation – which is clubs account for transfer fees over a period of time – was £87m.
That means their playi🌜ng budget was £267m, which would be well over the 85 per cent cap.