Newcastle United have a PSR problem on their hands as June 30th looms.
It has been reported that the Magpies are one of six Premier League clubs that are under pressure to sell before June 30th, which is when clubs must submit their next set of accounts to prove they are complying with profit and sustainability rules.
It seems harsh on Newcastle United, who know they need to spend to try and close the gap on the ‘big six’. However, Premier League rules are holding them back.
It is extremely frustrating, and gives the club a bit of an issue to deal with over the next couple of weeks.
Financial expert assesses Newcastle’s PSR situation
But exactly how big an issue is it? Only the club knows, as they are yet to release their accounts for the 2023/24 season.
And despite Newcastle’s PSR concern, TBR Football‘s finance expert Adam Williams believes it could actually be a record year for the club in terms of turnover.
“Given that the club won’t release their 2023/24 accounts until early next year, it’s hard to say exactly the deficit that the club need to make up before 30th June,” he said.
“Their operating income will be up significantly for the season thanks to the £25million-a-year front-of-shirt deal and Champions League participation money. In fact, I’d expect them to post turnover well in excess of £300million, which will be a record for a club outside the so-called ‘big six’.
“However, they are approaching critical mass when it comes to their losses. And that means sales will be needed before 30th June, when the PSR assessment window ends.
“They avoided a breach in 2022/23 despite reporting loss of £155million over the rolling three-year period, which well exceeds the £105million limit. PSR-deductible costs like the investment in the training ground and revenue lost to COVID saw them fall within the threshold ultimately.”
Newcastle close to the limit despite ‘restrained’ 2023/24 season
While PIF have not splashed the cash as much as usual this season, Adam Williams believes it could still be a very costly year for Newcastle United.
“But the margin is far finer this time around, with player trading the only way to make up the shortfall.
“On paper, 2023/24 was the most restrained PIF have been in the transfer market since they took over the club.
“But while their net transfer spend at first appears to be at its lowest in the PIF era, the club have paid or were due to pay an eye-watering £144.2million in instalments over the course of the campaign.”
How Newcastle can solve PSR problem
For Newcastle, the only solution is to sell. But who do they sell?
There are certainly plenty of contenders, with the likes of Miguel Almiron and Callum Wilson rumoured to be leaving St James’ Park this summer.
Moving them on could be the answer according to Adam Williams, rather than cashing in on an elite star like Bruno Guimaraes or Alexander Isak.
“If they think they have enough saleable assets, they could rely on smaller player sales to account for the losses rather than selling a blue-chip player like Isak or Guimaraes and making up the shortfall in one fell swoop.
“But it’s high-tariff strategy given the number of exits they would have to action and the logistics of orchestrating a mass exodus over the next 17 days.”
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