Newcastle United revealed they had sold St James' Park leasehold in their latest financial accounts
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A football finance expert has criticised Newcastle United's decision to sell the leasehold at St James' Park to a company owned by the club's directors as a move that 'erodes long-term coherence'.
Professor Rob Wilson has used Newcastle's recent accountancy revelation, along with Everton's move to sell their women's team, as examples of how football clubs aren't facing up to reality or trying to solve long-term structural issues. Instead, he believes the short-term nature of such deals could impact clubs in the longer run.
Newcastle avoided a possible breach of the Premier League's Profit and Sustainability Rules (PSR) by selling the St James' lease and other property to PZ Newco Propco 1 Limited whose directors are Newcastle United directors Yasir Al Rumayyan, Abdulmajid Alhagbani and Jamie Reuben.
It enabled the club to record what on paper looked a healthy £34.7m post-tax profit, but Prof Wilson - dean at University Campus of Football Business - believes it shouldn't be seen as 'sound financial management' but instead is representative of a broken football system with clubs taking advantage of loopholes rather than getting their house in order.
Writing for City AM, he said: "There is a growing sense that elite football is attempting to outmanoeuvre its own reality. Not by solving its structural financial challenges, but by creatively working around them.
"The recent moves involving Newcastle United and Everton’s stadiums are not clever innovations, but symptoms of a system still unwilling to face the truth.
"Newcastle’s move to sell their stadium to a related party within their ownership structure, and Everton’s decision to sell their women’s team to generate accounting gains may sit within the technical boundaries of Profit and Sustainability Rules (PSR), yet they are not examples of sound financial management or competitive advantage. They are accounting devices designed to create headroom rather than stability and can only be done once.
"We’ve seen this before. From aggressive capital structuring and asset movements to the sale of future broadcasting rights or lease back of crown-jewel assets, football has a track record of responding to regulation not by changing behaviour, but by finding new ways around it. Even the points deductions handed to Everton and Nottingham Forest have not reset the dial.
"In that context, the Premier League’s proposed shift from PSR to a new Squad Cost Ratio (SCR) framework is both necessary and revealing. Necessary, because linking spending more directly to football-related income should, in theory, impose greater discipline. Revealing, because it acknowledges that the current model is being stretched to its limits.
"What Newcastle and Everton demonstrate is not ingenuity, in my opinion, but deferral of the truth. Selling core assets internally or divesting strategic parts of the organisation to meet compliance thresholds may buy time, but it erodes long-term coherence.
"A stadium is not just an accounting line and a women’s team is not a disposable asset. These are critical components of a club’s identity, value and future growth. They represent its very fabric.
"Stripping them back for short-term accounting gain sends out the wrong signal, like the battle the Sheffield Wednesday administrators are facing at this very moment: passing the test matters more than building the business. This is where football needs to grow up."
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