Newcastle accept they may have to sell one of their best players this summer as they strive to remain on the right side of the Premier League’s profit and sustainability regulations. Although the club’s latest accounts revealed a loss of £155m over the past three seasons – ostensibly in excess of the £105m PSR limit – it is understood that money invested in the women’s team, charity foundation and academy can be removed from the deficit, leaving Newcastle on the right side of the law.
“We’re compliant,” said Darren Eales, the chief executive, before refusing to rule out the possibilities of “trading” a player such as Bruno Guimarães, Alexander Isak or Sven Botman or even leaving St James’ Park for a new stadium.
Despite Eales’s evident delight at the club’s latest set of financial results highlighting a near 40% rise in turnover to £250.3m and a 66% increase in commercial revenues to £43.9m, St James’ 52,000 capacity is restricting room for further growth. Given that Newcastle made a post-tax loss of £73.4m in the financial year to June 2023 and the ability of the vastly wealthy Saudi ownership to invest in new players is limited by PSR, maximising off-field income is vital.
“If we’re going to get to where we want to get to, at times, it’s necessary to trade your players,” said Eales who is determined to help establish Newcastle as a trophy-chasing, top-six club. “It’s a counterintuitive part of the PSR system that there is an incentive to trade players if you want to reinvest.” He explained that were Newcastle to sell a homegrown player for £50m, that would count as profit but, should they then purchase a new £50m first-teamer, the cost could be spread across five seasons.
Eales has commissioned leading international architects to compile a feasibility study on increasing St James’ Park’s capacity. Its city centre location makes this complicated and Eales said: “We have to grow our revenues. St James’ Park is in an amazing location and the ‘cathedral on the hill’ is part of what makes us special. If we’ve got the ability to stay in this location and still drive revenues that’s what we’ll do. But I don’t want to second-guess the study.
“We want to be a top-six sustainable club but Tottenham’s latest accounts show £440m [in turnover]. We are at £250m so it’s a big step even to the lower end of the top six. Manchester City are at £710m. There’s a long way to go.”
It explains why Newcastle are unlikely to buy this month to help the struggling team and that the loan fee asked for Manchester City’s Kalvin Phillips may be too steep. “We’ve always known the [financial] rules of the game,” said Eales. “And we will always be complaint. But if you’re trying to be upwardly mobile it makes it a huge challenge. Have we [the Premier League] got that tension right in allowing clubs to be competitive and protecting them from going bust or over-spending?”
Newcastle are ninth in the league, 11 points off a top-four place.“We’re hopeful of qualifying for Europe,” Eales said, before suggesting Newcastle’s sporting director, Dan Ashworth, will reject overtures from Manchester United. Despite recent stumbles Eales stressed that Eddie Howe remains integral to the owners’ long-term vision. “We hope Eddie’s going to be here for many years to come,” he said.
The accounts reveal that two interest-free loans were made to the director and minority co-owner, Amanda Staveley, to allow her to finance legal action. While an initial £600,000 was loaned to Staveley in November 2022, a further £659,000 was extended to her in August 2023.
Cantervale Ltd, a company controlled by Staveley, was paid £312,500 for “strategic advisory services” to Newcastle in the last financial year. In the previous 12 months immediately after the takeover, Cantervale were paid £937,500.
Despite considerable strengthening of the playing squad Newcastle’s wages to turnover ratio dropped to 74.1% from 94.6% in the previous accounting year.
