Newcastle United ‘livid’ at Leicester City’s PSR costs with the former Man United Striker move
Newcastle United have yet another reason to feel aggrieved about the Premier League’s PSR system.
PSR (Profit and Sustainability Rules) limit Newcastle to losing a maximum of £105m over a rolling three-year period, as long as the bulk of those losses are underwritten by PIF.
While the Saudi Public Investment Fund are the richest owners in the Premier League by an order of magnitude, PSR has acted as an anchor to their ambitions at St James’ Park.
Since the takeover in October 2021, Newcastle have still spent heavily and CEO Darren Eales has said that they will always spend the very maximum allowable under PSR.
But they skirted dangerously close to the brink of a PSR breach for the monitoring period up until 30th June 2024 and were forced to sell starlets Elliott Anderson and Yankuba Minteh to remain compliant.
Newcastle’s tribulations under PSR have made Leicester City‘s appeal victory over the Premier League sting all the more, with the Foxes essentially cleared on a technicality despite exceeding the PSR limit.
The ruling has sent shockwaves through the top flight and undermined faith in a PSR system that was already considered by many to be unfit for purpose.
To explore how PSR strugglers Newcastle have reacted to the bombshell news, TBR Football spoke exclusively to Liverpool University football finance lecturer and industry insider Kieran Maguire.
CEO Darren Eales, manager Eddie Howe and sporting director Paul Mitchell have all voiced their frustrations at the handicaps imposed by PSR.
The Tynesiders managed to avoid selling any of their true A-listers this summer, but there is an acceptance that might not be the case for much longer.
“There is a perception that Newcastle have a very good 16 players but beyond that, the squad is lacking,” said Maguire.
Ever since the takeover, Newcastle have placed huge emphasis on boosting commercial income in order to unlock new spending power.
Ultra-lucrative new commercial deals with Adidas, Sela and Noon have helped in this regard, but the Premier League’s fair market value provision makes exponential growth difficult.
Pluralisation and diversification of their sponsorship inventory is one option they are looking at, and the new deal with energy drinks titans Red Bull is emblematic of this.
Red Bull also recently signed a deal with PIF-owned Al-Hilal and, unusually for a club getting in bed with a potential direct rival, own a significant minority stake in Leeds United.
On the one hand, Newcastle supporters may have a degree of solidarity with Leicester and their successful attempt to essentially bypass a PSR system that many believe is unfit for purpose.
