We will see the end of Profitability and Sustainability Rules (PSR) from next season, with a Squad Cost Ratio (SCR) system to be introduced.
Despite Newcastle United’s incredible wealth since the takeover in 2021, the Magpies have rarely been able to exert that financial muscle.
That was due to PSR limiting the amount of money PIF could spend, and everyone associated with the club has long bemoaned the impact this has on the long-term vision for Newcastle.
Newcastle United’s spending power ahead of the January transfer window.
But, proposals for an alternative from Premier League chiefs were first suggested around a month ago, with clubs voting on the matter this week.
On Friday, the vote went in favour of a new system called SCR, which essentially means Premier League clubs can spend 85% of their football-related income while accounting for net profit and loss from player sales.
But, what does this mean for Newcastle?
- READ MORE: Newcastle United’s Elliot Anderson PSR dilemma revealed as ‘bizarre’ £22m-a-year deal mooted
Squad Cost Ratio rules will impact Newcastle United
Interestingly, on the latest episode of An Arsenal Podcast, Ben Jacobs touched on the matter of SCR and how it could impact a club like Newcastle.
Speaking hypothetically, Jacobs said: “Well, on the calculations for this year, if the rules were enforced — and remember SCR has been shadow trialed — Crystal Palace are kind of right on the limit, a little bit under it.
“They’re more in trouble under financial fair play because they’re over 70% based on projections, but they’re under 85. It’s challenging as well for Newcastle United.”
Jacobs is essentially saying that, with Newcastle’s spending around the 85% limit already, there is work to be done if they are to comply with SCR rules from the get-go.
- READ MORE: Sunderland legend highlights Nick Woltemade problem at Newcastle that Eddie Howe must fix
How Newcastle were affected by PSR
Last week, finance expert Kieran Maguire said Newcastle were held back by PSR, which has made Eddie Howe’s job more difficult than it needed to be.
Curiously, Amanda Staveley insisted PSR was fair and had not impacted Newcastle over the last few years. But, we know that is simply not true.
Which position should Newcastle United look to strengthen in January?
The sale of Elliot Anderson is the prime example of this. The Magpies had to sell the young midfielder to Nottingham Forest last summer for £35m to balance the books. He’s now worth £100m and Newcastle want him back, which is frankly ludicrous.
Newcastle have rarely been able to splash the cash they have in abundance. Even this summer with the signings of Nick Woltemade and Yoane Wissa, it’s worth remembering they were offset by the big sale of Alexander Isak.
There was hope that PSR changes could massively benefit Newcastle. Sadly, the vote didn’t quite go the way Newcastle would have liked, but there should still be hope that this new direction at least makes things slightly more comfortable for the Magpies, if they get their finances in order before next season.
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