PIF investment in Newcastle reaches £338m as finance expert explains major cash injection

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Newcastle United have received a new cash injection from their owners.

It has been just over three years since PIF completed their takeover at Newcastle United and they continue to invest in the club’s long-term project.

Unfortunately, the Premier League Profit and Sustainability Rules have shackled Newcastle’s spending under their wealthy owners.

Newcastle were forced to sell Elliot Anderson and Yankuba Minteh to balance their books under PSR, and the financial rules threaten to ruin the upcoming January window for the Magpies.

Newcastle could be handed a PSR lifeline by the new sponsorship rules being voted on by Premier League clubs on Friday. Before that vote even takes place, Newcastle’s owners have injected an eight-figure fee into the club.

READ MORE: Finance expert reveals how Premier League rule change will benefit Newcastle and ‘huge’ PIF deals

Newcastle chiefs inject £35m into the club

A Companies House filing submitted on Tuesday (19th November) revealed that Newcastle United’s owners have issued one new share.

Football finance expert Kieran Maguire pointed out the share issue on social media, describing it as a “£35m boost” for Newcastle.

It is not clear whether the investment comes in the form of new cash or the conversion of debt into equity.

It is not the first time Newcastle’s owners have issued new shares and injected cash into the club, and Geordie Boot Boys spoke exclusively to GRV Media’s finance expert Adam Williams on what the investment means for Newcastle.

PIF investment in Newcastle has now reached £338m

Speaking to Williams, he explained what the £35m injection may be used for and hinted to fans that there is more on the way.

“Typically, when money is put into a club via a share issue it is to either restructure the ownership or provide working capital,” Williams explained.

“The fact that they have only issued one share means that it is the latter here.

“At this time of year, you have got all your season ticket revenue in the bank and the next tranche of Premier League money is a while off. The merchandise rush at Christmas might not have quite caught fire yet too.

“So we often see share issues to help clubs with paying wages and other operational costs while there isn’t a lot of money coming in.

READ MORE: The two things Eddie Howe has done to paper over the cracks of PIF failure

“The owners have injected £337.9m via this method since the takeover.

“Unlike soft loans, that is money that owners don’t want back.

“Soft loans are interest-free loans from the owners to the club that they expect or at least are entitled to be repaid at a later date.

“They are under the spotlight at the moment because of the fallout from Man City’s challenge to the APT rules, one outcome of which has been that the Premier League has been forced to rewrite its rules on soft loans. There will be a vote on that on Friday, if it is not postponed.

“Under the new rules, soft loans will be considered a subsidy and a commercial interest rate will be applied for the purposes of PSR.

“Basically, if your owner lends you money then a proportion of that money will be deducted from your PSR quota.

“That means we’re likely to see a lot more of these Newcastle-style share issues in the future.”