Newcastle could be forced to part with a valuable team member during the upcoming transfer window due to a significant financial loss of £73.4 million.

Estimated read time 4 min read

Newcastle acknowledges the possibility of needing to trade one of their top athletes in order to comply with the Premier League’s financial regulations. While the team’s recent financial records show a deficit of £155m in the last three seasons, it is believed that funds allocated towards the women’s team, charity foundation, and academy can be deducted from this total, keeping Newcastle within the legal limits.

The chief executive, Darren Eales, stated that they are following all regulations. He also mentioned the potential for “trading” players like Bruno Guimarães, Alexander Isak, or Sven Botman, as well as relocating from St James’ Park to a new stadium.

Eales is pleased with the club’s recent financial results, which show a 40% increase in turnover to £250.3m and a 66% rise in commercial revenues to £43.9m. However, the 52,000 capacity of St James’ Park is limiting potential for further growth. With a post-tax loss of £73.4m in the financial year ending in June 2023 and the Saudi owners’ ability to invest in new players restricted by PSR, it is crucial to maximize off-field income.

“According to Eales, in order to achieve our desired goals, there are times when it is necessary to trade players. He is committed to elevating Newcastle to a top-six club that competes for trophies. It may seem counterintuitive, but the PSR system provides an incentive to trade players if we want to reinvest in the team. For example, if we were to sell a homegrown player for £50m, it would count as profit. However, if we were to use that money to purchase a new first-team player for £50m, the cost could be spread out over five seasons.”

Eales has hired renowned global architects to conduct a study on the feasibility of expanding the capacity of St James’ Park. Due to its central location, this presents a challenge and Eales stated, “We need to increase our earnings. St James’ Park is situated in a prime location and its iconic ‘cathedral on the hill’ is a key factor that sets us apart. If we can continue to generate revenue while remaining in this location, that’s our goal. However, I don’t want to make assumptions about the results of the study.”

Our goal is to become one of the top six clubs in terms of sustainability, however, the most recent financial report from Tottenham reveals a turnover of £440m. Our current turnover is only £250m, so even reaching the lower end of the top six is a significant accomplishment. Manchester City’s turnover is at £710m, highlighting the considerable gap that we have yet to bridge.

The reason for Newcastle’s unlikeliness to make any purchases this month in order to support their struggling team is outlined, with the potential loan fee for Manchester City’s Kalvin Phillips being considered too high. Eales stated, “We are aware of the financial regulations and will always abide by them. However, if we want to improve and move up, it becomes a significant challenge. Does the Premier League have a proper balance in allowing clubs to compete while also preventing financial troubles and excessive spending?”

Kalvin Phillips of Manchester City looks on from the substitutes bench against Sheffield United

Newcastle currently holds the ninth position in the league, with 11 points behind the top four teams. According to Eales, there is hope for the team to qualify for Europe. He also mentioned that Manchester United’s interest in the team’s sporting director, Dan Ashworth, will most likely be turned down. Despite some recent setbacks, Eales emphasized that Eddie Howe is still a crucial part of the owners’ future plans. “We have high hopes that Eddie will continue to be with us for a long time,” he stated.

Ignore the newsletter advertisement.

The records show that the director and minority co-owner, Amanda Staveley, received two loans with no interest to assist in funding legal proceedings. The first loan of £600,000 was given to Staveley in November 2022, followed by an additional loan of £659,000 in August 2023.

Staveley’s company, Cantervale Ltd, received a payment of £312,500 for providing “strategic advisory services” to Newcastle during the last fiscal year. In the 12 months following the takeover, Cantervale was paid £937,500.

The Newcastle team significantly improved their roster, but their wages to turnover ratio decreased from 94.6% to 74.1% compared to the previous year.


You May Also Like

More From Author