Newcastle United may be the richest football club in the world on paper, but it counts for nothing if they’re not allowed to spend their funds.
Since 2021’s takeover by the Saudi Arabia-backed Public Investment Fund (PIF), Newcastle have become a financial titan of football.
However, all they really have to show for it is a Carabao Cup win and a couple of Champions League qualifications.
Many have called for PIF to fund new transfers for Eddie Howe and the team to take them to the next level, but PSR restrictions have consistently held the Magpies back.
That could all be about to change, for better or worse, with a fresh vote on the PSR rulebook coming up this week.
- READ MORE: Ross Wilson’s relationship with Eddie Howe at Newcastle is already very different to Paul Mitchell’s
What the new PSR vote could bring to the table
We know PIF have sympathy for Eddie Howe, given the fact he is working under conditions that have seen him having to sell players to balance the books, while being unable to sign the top targets he wants and needs.
But, as finance expert Adam Williams tells Geordie Boot Boys, those PSR rules may well be changing as clubs come together for an important vote on the matter.
Williams said: “On Friday, clubs are going to vote on the future of PSR at their quarterly Premier League shareholders’ meeting.
“On the agenda is whether to replace or supplement PSR with a new system known as ‘anchoring’, wherein spending on first-team wages, transfers and agents’ fees is limited to a 5x multiple of what the bottom-placed club earns in TV money from the Premier League.
“Based on the most recent set of club accounts we have access to, that upper limit would be set at about £550m. But alongside that, there is also the possibility of a squad cost ratio rule, which would run alongside the anchoring proposal and limit clubs to spending no more than 85 per cent of revenue plus a rolling three-year average of transfer profits on first-team costs.”
It’s no secret that Newcastle have been held back by PSR, with finance expert Kieran Maguire claiming Howe has done a fantastic job, all things considered. But, if things do change, what could the future hold for the Magpies?
- READ MORE: When Newcastle are expected to confirm plan to build a new stadium and how it links with Eddie Howe
What does this mean for Newcastle United?
Interestingly, Amanda Staveley claimed PSR rules were fair and conducive to a competitive league. Plenty of Newcastle fans would probably disagree with that, but they’ll be happy to hear that more financial freedom could be coming for clubs like Newcastle.
Williams added: “For Newcastle, based on their 2023-24 accounts (which are the most recent available) that would limit spending to about £294m. Clearly, the actual total is going to be different because we don’t have up-to-date figures, but that gives you a picture of what might happen.
“In 2023-24, Newcastle spent £187m on wages, of which probably 75 per cent was first-team wages. So let’s call it £140m. On top of that, they had player amortisation of £87m. So they would have used around £227m of that £294m cap.”
However, before we get too excited, it’s worth noting that Williams is sceptical about any mass changes coming at this juncture, regardless of how Newcastle representatives vote on Friday.
He concluded: “I personally don’t think either the squad cost rule or anchoring will be introduced this time around. There are potential legal challenges inbound from the players’ union and, with the governance situation in the Premier League still pretty febrile, I don’t think they’ll get the two-thirds vote required to change the PSR system.
“That is what is on the table though, and I think it will come in at some point when they get the formula right. Newcastle, however, will vote for more a more liberal version of PSR – we can be sure of that.”
The post Exclusive: New PSR system could unlock £294m-plus spend for Newcastle United appeared first on Geordie Boot Boys.