Financial regulations have seriously slowed Newcastle United’s progress under PIF.
The January transfer window is now open but Newcastle United will struggle to improve Eddie Howe’s squad due to their financial restrictions.
Premier League Profit and Sustainability Rules forced Newcastle to sell Elliot Anderson and Yankuba Minteh in the summer and, now in January, the Magpies are still unable to spend without risking a points deduction.
Newcastle accept that a big star may have to be sold in 2025 to balance the books at St James’ Park, but first they are trying to offload fringe players this month. There are as many as five players who could leave Newcastle in 2025 to solve PSR issues.
The good news for Newcastle is that the current PSR regulations are being scrapped for the start of the 2025/26 campaign. The bad news? The new regulations will still stop them from competing at the top.
What are the new financial rules replacing PSR?
The current PSR regulations state that Premier League clubs cannot lose more than £105million over a rolling three-year period.
Any clubs that exceed that limit face a points deduction – as Everton and Nottingham Forest have recently found out.
They are set to be replaced by new ‘Squad cost rules’ which restrict on-pitch spending to 85 percent of a club’s football revenue. That spending includes transfer fees, wages and agent fees.
However, clubs competing in European competition will only be allowed to spend 70 percent of their revenue so that they also comply with similar Uefa rules.
Newcastle have been working hard to try and increase all revenue streams with talks ongoing about expanding St James’ Park to 65,000 to boost matchday income.
Newcastle set to suffer under ‘anti-competitive’ rules
According to The Chronicle, Newcastle are set to announce club-record revenues north of £300m in their upcoming accounts.
It shows the off-pitch progress being made by PIF, but finance expert Kieran Maguire explained that Newcastle will still find themselves “£280m” behind their Premier League rivals.
READ MORE: PIF’s new transfer strategy at Newcastle United goes against what Darren Eales said last year
Speaking on the Price of Football podcast, Maguire said: “For me, the rules are anti-competitive,”
“If we take a look at the new rules that are coming in, with 70% of revenue being paid on wages, Manchester City’s revenue is £700m. 70% of that is £490m.
“Newcastle’s revenues, even with the deals they have managed to get through, are, say, £300m. 70% of that is £210m.
“The likes of Manchester City, Liverpool and Manchester United have a £280m wage advantage to begin with. How do you reduce that?”
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