Newcastle United are one of many clubs that have faced problems with the Premier League’s PSR rules.
Newcastle United’s issues with the Premier League’s Profit and Sustainability Rules (PSR) have been well-documented in recent times.
Having only avoided PSR punishments thanks to a last-minute scramble to sell players, Newcastle had to sanction the sales of a number of first-team stars including Elliot Anderson and Yankuba Minteh, to avoid possible fines and point deductions.
So with their PSR problem now seemingly behind them (for the time being at least), the Magpies have now been hit with the news that Manchester United received “exceptional” PSR allowances which prevented them from being punished.
How did Manchester United avoid PSR sanctions?
Speaking on the Talksport morning show, financial specialist Stefan Borson appeared alongside Jim White and Troy Deeney, to lift the lid on Manchester United’s PSR situation.
When quizzed on whether the Red Devils were close to breaking PSR rules, Borson said:
“The bottom line is when you look at the three-year assessment, United would have failed PSR for the season just gone due to two things. One is they were given an exceptional allowance of £40m for COVID in 2022, which no other club had, the most any other club had was around £1m in that period.”
Borson was then questioned as to why United received such an “exceptional” allowance, to which he replied:
“We don’t know. On top of that, it seems they have been given an allowance for around £35m relating to the share sale to Ratcliffe, but to be honest the Glazers should have paid that themselves anyway as they were the main beneficiary.
“The only way they could have made that PSR target was by having these allowances which are relatively exceptional within the game,” said the finance expert.
Borson’s claims have caused quite a stir among Magpies fans, with many being left confused as to why Man United have been given different allowances to other clubs like Newcastle and Everton etc.
Football finance expert gives verdict on PSR allowance claims
Football finance expert Adam Williams has since provided supporters with more clarity on the situation, honing in on Stefan Borson’s “exceptional allowance” claims.
“This story has certainly caused quite a stir in recent days.
“The first thing people need to consider here is that Borson’s use of the word ‘exceptional’ isn’t implying special treatment.
“‘Exceptional’ is an accounting term which, in this specific case, is referring to the one-off losses incurred by clubs as a result of the pandemic.
“Every club in the Premier League, including Newcastle, had ‘exceptional’ allowances.
“It is the disparity in the amount claimed by other clubs – and I think specifically the other Big Six – in 2021-22 that should be the talking point here.
Which clubs claimed COVID losses?
Amid confusion surrounding Covid-based finances, Williams has revealed which clubs claimed losses and the context behind them.
“Contrary to what some have claimed, Man United are not the only club to have disclosed their Covid losses in the accounts.
“A handful of other clubs have revealed them. Newcastle aren’t one of them, which might suggest they didn’t make any claim at all. But we can’t say that with any certainty.
“What we do know is that Man United are operating on a different commercial plane to Newcastle. That is just a fact.
“Newcastle wouldn’t have been able to chalk up £40m to Covid losses in 2021-22 because their commercial income is about one-sixth of Man United’s.
“Where there is a question to be asked is when you look at the amount claimed by other clubs who are in Man United’s peer group.
“I suspect this is where Borson’s argument is chiefly directed, rather than focusing on the likes of Newcastle.
“Arsenal, for example, have attributed £2m. Spurs, apparently, less than £1m. From what we can see, Everton were the closest club to Man United in terms of Covid claims at £8m, although we don’t have data for every club.
“Also, it’s important to note that Borson, who is one of the very best when it comes to exploring the intricacies of regulations, has been explicit about the fact that he is not alleging corruption.
“I can’t speak for him, but I believe that what he is more highlighting is that the Premier League’s rules allow some ‘exceptional’ costs but not others.
“If there is an issue therefore, it is with the rules themselves as opposed to how they are being enforced by the Premier League.
Manchester United “have not fabricated losses”
Williams also claimed he highly doubts the Red Devils have forged losses to avoid PSR sanctions, stating it “wouldn’t make sense from a cost-benefit, risk-reward standpoint.”
“I also think it is worth stressing that the Covid losses had to be independently audited, by PwC in Man United’s case.
“Contrary to what some are suggesting, the club absolutely have not fabricated these losses, as to have done so would mean they have either hoodwinked PwC or they are in collusion with them in some way.
“That is just an impossibility. PwC trade on their reputation, and they would never jeopardise that for the sake of one client.
“Deliberately misleading an auditor meanwhile would be fraud, and Man United wouldn’t do that for the sake of dodging, say, a 10-point penalty. Aside from it being criminal, it just wouldn’t make sense from a cost-benefit, risk-reward standpoint.”
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