Newcastle United needing to now sell players this window if they want to buy, due to PSR? | OneFootball

Much has been said concerning the trials and tribulations of financial fair play regulations these past few days, with a widespread feeling that in losing the services of Yankuba Minteh and Elliot Anderson so close to the 30 June cut-off for PSR reporting, Newcastle United have somehow been done over.

I wrote an article on Sunday for The Mag that questioned, if the powers that be at Newcastle United knew we were sailing so close to the PSR wind, why did they leave it until the eleventh hour?

It all looked rather amateurish and unedifying.

Then there have been rumours circulating that Anthony Gordon was being seriously touted by the club with a move to Liverpool, should the two that eventually transpired failed to get across the line.

On the other hand, there has been a fair degree of pragmatism concerning the offloading of this pair.

Let’s face it, the club hasn’t sold any of its real prized assets and the deals that were done might have been weeks in the gestation, only coming to fruition last Sunday.

Yankuba Minteh is untested in the English Premier League, whilst Elliot Anderson hadn’t cemented a regular first team place, with Guimaraes, Joelinton and Tonali all likely to start ahead of him next season.

So it was good business, whether it was to get Newcastle United out of a PSR hole, or otherwise. I think it most definitely was, by the way.

In Sunday’s article, I referred to another article I had published for The Mag, that had commented on Newcastle United’s financial results for 2022/23, that now being the middle year of the latest three year PSR equation where losses (over any three consecutive season period), after adjusting for spending deemed to be ‘in the general interests of football’, cannot exceed £105m.

(*** ED: It is always important to bear in mind that not all expenditure contributes to PSR. That a lot of spending deemed to be ‘in the general interests of football’ such as a club’s infrastructure, the women’s team and youth development, won’t contribute to Newcastle United’s losses. However, the figures that NUFC publish in their accounts include all spending, all losses, so the actual losses for PSR purposes are always lower than those loss figures that appear in the official accounts and that are widely quoted, included in this article. Potentially significantly lower in some cases. This can be seen with the likes of Everton in particular, their overall losses were off the scale but when it came to PSR calculations, they were far far lower and closer to avoiding points deductions than you would have imagined, if just looking at the overall published losses.)

In 2021/22 and 2022/23 Newcastle United posted total losses in their accounts over the two seasons of £144.1million (an initial £70.7 million loss, followed by another £73.4 million loss). The loss in 2022/23 was despite turnover being up 39 percent year on year, because in simple terms expenditure had also increased at a similar rate.

In 2023/24, I’m assuming the club’s operating cost base was more stable but player wages and amortisation was likely to be higher (we acquired the services last season of Minteh, Tonali, Barnes, Livramento and Hall, whilst Karl Darlow, Alain Saint-Maximin, Chris Wood, Ciaran Clark, Javier Manquillo and Matty Longstaff were all permanent departures). So, let’s say overall, costs were slightly higher in 2023/24.

More positive news was the £25m a season new Sela front of shirt sponsorship deal, Noon continuing as sleeve sponsors and other commercial deals signed. Plus of course the big bonus came courtesy of qualification for the Champions League swelled the coffers. We also had seven domestic cup-ties, all selected for live TV coverage.

Taking all the above into consideration, I still think the club will have posted another sizeable loss in 2023/24, though not on the same scale as it was in the previous two years.

I appreciate much of this is ‘leap of faith’ stuff but my guesstimate is that most, if not all, of the money we’ve received for the sale of Minteh and Anderson, was needed to eliminate the PSR deficit and is therefore unavailable to spend in the summer 2024 window.

Indeed, if the club is going to spend in the 2024 window, my inclination is that this will only be possible if it offloads a player or two first (I’m thinking of the likes of Almiron, Dubravka, Wilson and Trippier).

Looking further ahead, in 2024/25 the club has the benefit of the Adidas deal (okay, not as lucrative as the Champions League) but with the big loss from 2021/22 dropping out of the PSR equation, and with the benefit of what I’m assuming is something close to break-even or even perhaps a small profit in 2023/24 (after taking into account the sales of Minteh and Anderson) things might look a bit more stable this time next year.

I think it’s fair to say the club won’t be able to splash the sort of cash that it did in previous windows, unless and until commercial revenues grow significantly higher than they are right now.

This is why it is absolutely imperative that NUFC finishes top four next season; those Champions League riches are essential for the growth of the club.

However, there is another factor at play beyond the finances. I think also, that to retain the services of the likes of Bruno, Isak and Gordon, the club needs the attraction of those special nights under the lights at St James’ Park on a permanent, ongoing basis.