Newcastle's money miracle - The truth, the lies and rivals at risk ahead of huge summer
In footballs modern era, club finances are often discussed as much as the on-pitch action, have ushered in an unofficial early summer transfer window PSR deadline of the 30th of June and have got everyone from journalists to fan accounts talking about ‘amortisation’, ‘break costs’ and ‘Revolving Credit Facilities (RCF).’
As much as football finances are a regular part of the revolving football news cycle many that speak about them continue to do so from a position of ignorance or football tribalism – see the hundreds of articles on Alexander Isak and Sandro Tonali which posit their sales for figures which are ludicrously low or skewed towards the club the pundit supports or played for.
Almost from the moment the PIF backed takeover was completed in October 2021 football finance talk, in how it relates specifically to Newcastle United, has focused on how much we’ve spent (and why it’s grossly inappropriate for a club at our level) or how much could United spend without regulations and other narratives of a similar sentiment.
‘Newcastle have spent all that money and only won a tinpot Carabao Cup.’
The wider football world initially appeared to react positively towards United following the ending of 70 years without a domestic trophy with the League Cup win in March – yet as other clubs have failed in their objectives as the season has progressed (notably Aston Villa when they were dumped out of the Champions League by PSG) the tired old football financial statements and assertions reappeared.
But even a cursory glance at a simple figure such as overall transfer expenditure since the takeover puts United down in 8th position with a spend of €531.80m behind Chelsea (€1.49B), Man Utd (€838.78m), Man City (€796.50m), Spurs (€723.25m), Arsenal (€697.80m), Villa (€568.50m), and even West Ham (€560.80m). Even converting the figures to net spend, United sit in 5th place.
Considering that all but two of those sides sit below us in the table it just goes to show how much Eddie Howe, and the squad are producing minor miracles in our overachievement. The narrative that all this spending has led to just a singular Carabao Cup is nonsense and not based in financial reality. And let’s not sugarcoat it – Spurs and Villa fans would definitely have loved to have won the Carabao Cup, and you can probably throw Arsenal in there too.
A very interesting summer awaits
The Athletic over the past few weeks has run an excellent series of articles from chartered accountant Chris Weatherspoon entitled The BookKeeper looking at the finances of the ‘top six’, Newcastle United and Aston Villa.
Each article has highlighted in black and red (it’s a financial pun…) what a knife-edge (Man City and Liverpool aside) most top sides finances are on.
Some of the highlights (or lowlights), depending on your point of view, are:
- Aston Villa have lost £411.4m since their takeover (2018/19), only Everton have lost more (£553.3m)
- Without selling Douglas Luiz, Villa would’ve failed PSR last season
- Chelsea have sold assets worth £275.2m to other companies within its ownership structure in June of each of the last two accounting periods – showing just how close to the PSR cliff edge they truly are
- Spurs have a net transfer debt of £279.3m (the highest in the league) – something which despite their favourable financing on their stadium and low wages – continues to hamper their ability to spend, unless is it outside of their sustainable model
- Man Utd owe other clubs a net £300.1m, with £167.9m due by the end of 2025
- The leveraged buyout of Man Utd by the Glazers and other debts total £731.5m casting a long and financially debilitating shadow over them considering they have nothing to show for it (large infrastructure projects/reduced trophy winning capacity)
- It can be surmised that Newcastle United spent at least £36.3m on the club’s academy and community development in the latest three-year rolling PSR period
- Newcastle will start next seasons UEFA FFP calculations £30m down as they don’t count the sale of Elliot Anderson
- Arsenal has shareholder loans totalling £324.1m and would be one of a handful of clubs (Brighton and Everton included) who could suffer punishment if these loans are brought in PSR calculations following the APT2 trail
- Villa will have to sell players this summer (before 30th June) if they do not qualify for the Champions League
- Liverpool (£136.2m) and Man City (£126.4m) continue to make profits – those figures showing what each club has made over the last decade (for context only seven Premier League clubs total have been profitable in that time)
As mentioned above; these are just some of the details outlined in the series of articles and if you have a way to, they’re worth read and paint a fascinating picture of the financial knife-edge many of the ‘big six’ and others continue to operate on. What is clear just from the highlights is that this financial crunch is sure to make it a very, very interesting summer.
Governance - or a lack thereof
Premier League clubs have obviously decided that finances are another theatre where they can pursue flagrant self-interest and masquerade it as ‘for the good of the game’ while simultaneously stripping ‘legacy fans’ (a term I despise) of season ticket seats held for generations, hiking prices in a cost of living crisis and justifying over the hill Brazilian midfielders £300,000-a-week wages by cutting the jobs of ordinary working people.
It feels like an unfortunate outcome of English footballs insatiable desire to be perceived as the best – the best leagues, the best players, the best coaches – that these matters (APT cases, PSR breaches, 115 charges) occupy as much discussion space as Alexander Isak’s brilliance in front of goal.
It’s doubly unfortunate that these sorts of discussions and headlines are clearly here to stay as the Premier League battles to prove it can govern itself (spoiler alert: it obviously can’t) in the face of the governments looming ‘Independent Football Regulator’ – a body which has the potential to be an absolute disaster for the game in my opinion – just look at what lobbying does in other spheres the government operates in (healthcare and NHS privatisation being huge red flags).
Specifically relating to Newcastle United – this governance has seen roadblock after roadblock erected to try and stop the club progressing at the behest of the Premier League’s lobbyist clubs (Spurs and Liverpool immediately post failed takeover in 2020/ the other 19 post 2021 takeover). They live in constant fear of being overtaken and consigned to irrelevance.
Success is very rarely a linear process, as it has been with Newcastle United. Following on from 2022/23’s incredible 4th place finish and a return to the Champions League, United finished 7th place, trophy-less and with no European football in 2023/24. Yet with the sunsetting on 2024/25 United have the Carabao Cup secured and a return to the Champions League within its grasp and could still finish 2nd in the league – all with the spending restrictions placed upon us.
If United do go on to be a footballing powerhouse post takeover (a la Man City and Chelsea) it will be despite football financial regulations and governance - and that will make it taste all the sweeter.
Every figure quoted in this article is publicly available.
