This is why Newcastle United ended up in PSR crisis – What fans need to know | OneFootball

Arguably the biggest talking point this summer with Newcastle United, was the PSR situation.

The Premier League Profit and Sustainability Rules (PSR) allow for losses of no more than £105m over any three season period.

Not all expenditure counts by a Premier League club counts towards the losses but as we have seen, clubs can meet serious issues if going above the £105m losses, including loss of points.

Newcastle United found themselves heading towards the 30 June 2024 deadline with a reported shortfall of £50m+, in terms of the three-season period covering 2021/22, 2022/23 and 2023/24.

All sorts of rumours flew about as to exactly how that £50m+ shortfall would be plugged, in the end though, young squad players Elliot Anderson and Yankuba Minteh were sold for a reported combined £68m. With the vast majority of that reported £68m been able to count towards the PSR situation, Elliot Anderson a homegrown player and Yankuba Minteh bought for only £7m 12 months earlier.

So how/why exactly did Newcastle United end up in this PSR problem position.

It is quite simple…

These are the significant transfers (more than £1m) in and out of the club before we reached this sixth and final summer 2024 transfer window of this three-season PSR accounting period.

SUMMER 2021

£25m Joe Willock

OUT:

IN:

£12m Kieran Trippier

£25m Chris Wood

£3m (loan) Matt Targett

£13m Dan Burn

£41.65m Bruno Guimaraes

OUT:

SUMMER 2022

IN:

£12m Matt Targett

£10m Nick Pope

£35m Sven Botman

£63m Alexander Isak

OUT:

JANUARY 2023

IN:

£45m Anthony Gordon

£3m Harrison Ashby

OUT:

£5m Jonjo Shelvey

SUMMER 2023

IN:

£7m Yankuba Minteh

£58m Sandro Tonali

£38m Harvey Barnes

£38m Tino Livramento

OUT:

£15m Chris Wood

£23m Allan Saint-Maximin

JANUARY 2024

IN:

OUT:

The transfer figures I have used above are the ones generally reported and in most cases we don’t know the exact figures, however, for these purposes in this article, I think it is simply about seeing the bigger picture.

For round figures, the five transfer windows above saw spending on major transfers of around £430m, whilst in terms of selling players, only around £40m was recouped.

The bottom line is that even with amortisation (spreading the purchase price over the length of a new sign’s contract), it all eventually catches up with you.

Fact is that Mike Ashley had left a squad with very few saleable assets, certainly not beyond the key players that needed to be kept.

So the new owners had no other option but to have a very high net spend for a number of transfer windows to firstly rescue the team from relegation trouble and then build from there.

It is naturally a great help that incoming revenues have vastly increased these last two years but not enough to balance off the increased spending, with the wage bill and other costs also significantly rising, as the Newcastle United owners run our football club in a way that now resembles a professional and ambitious PL outfit.

The sales of Anderson and Minteh have solved the immediate problem of that 30 June 2024 deadline and to an extent helped with the finances going forward, especially taking into account the £70m losses of the 2021/22 season that have now dropped off the three-season PSR.

However, in reality this has just helped stabilise the position and given a slightly better platform to move forward once again.

The future is very bright, I have no doubt.

We do though have to at the same time show patience as well, this is a long-term chase in terms of closing the financial gap on those clubs who had build up such an advantage over a decade and a half or more.