Newcastle United are in a healthy PSR position now but that could change next season due to UEFA’s rules for clubs in the Champions League.
The Premier League’s Profit and Sustainability Rules (PSR) do not allow clubs to lose more than £105million over a three-year accounting period. Thankfully, Newcastle United look in good shape ahead of the next PSR deadline, which comes on June 30.
Eddie Howe has confirmed Newcastle don’t have PSR issues, though it is of course a moving beast and qualification for the Champions League complicates matters.
Newcastle’s PSR situation is positive, but UEFA have different rules. The governing body have lower loss limits, which could impact the club.
Speaking to Geordie Boot Boys, football finance expert Adam Williams has shared some insight.
Photo by Ian MacNicol/Getty Images
Photo by Ian MacNicol/Getty Images
Newcastle United’s UEFA PSR situation ahead of Champions League return
According to Williams, Newcastle could be closer to the UEFA limit in 2025-26 as European football’s governing body has made adjustments to some of the club’s player trading profits.
He said: “I’m fairly confident Newcastle will be okay for 2024-25 Premier League PSR. Even if they are one of the clubs whose losses will mean they are closer to the bone, I think the allowable deductions they make will see them get over the line.
“But the £50m or so worth of adjustments they have to make for their UEFA PSR position will mean things are closer in 2025-26 as far as Europe’s system is concerned.
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“We know that £50m figure comes from reducing the costs of profit on player sales, and the analysis I’ve seen from Chris Weatherspoon and Stefan Borson suggests that’s to do with transfers with PIF-related entities, i.e., Allan Saint-Maximin to a PIF-owned club, and the quasi-swap deals we saw last June. The Premier League has accepted those; UEFA has not.
“UEFA’s football earnings test – which Newcastle will have to comply with next season by virtue of them being in the Champions League – is lower at about £75m over the three years, depending on exchange rates.
“Their underlying numbers from the accounts we have available at the moment suggest that they would be over that limit, as does The Athletic’s analysis. If they are going to have a big summer, which Eddie Howe has been signalling, then they’re only going to go further into the red.”
Williams also highlighted that a points deduction could come for any team who go over UEFA limits. Barcelona were handed a minor punishment, but are awaiting a decision on how the situation develops.
“That’s not necessarily a huge problem, though there isn’t much of a precedent to go off.
“Barcelona have received only minor punishment from UEFA by being in a similar position, but they are awaiting the governing body’s assessment of another financial breach.
“They say they are expecting only a small financial penalty again, but there are reports that it could be a points deduction or a limit on the number of players they can register for the Champions League. Newcastle will be looking at the outcome of that, as well as Aston Villa and Chelsea’s settlements for UEFA.
“But generally, I’d say clubs like Newcastle are seeing a UEFA penalty as one of the costs of doing business. Plus, even in the event that it is a points deduction, I’d say they would probably accept that on a risk-benefit analysis.”
Photo by Andrea Diodato/NurPhoto via Getty Images
Photo by Andrea Diodato/NurPhoto via Getty Images
Newcastle United could repeat 2023 transfer plans after reaching the Champions League
Newcastle could spend over £100million this summer in preparation for their Champions League campaign.
Ahead of the season 2023-24 season, Newcastle spent around £131.5million after reaching the Champions League.
It seems this summer could follow a similar pattern. Howe wants urgent transfer action, having had to work through the 2024/25 season without any major signings.
Hopefully, they can go out and sign players. The squad looked stretched even before qualifying for Europe.
While UEFA’s rules are something to consider, Newcastle need investment.