Premier League to introduce financial change that will 'make it difficult' for Newcastle United

Newcastle United are set to be dealt a fresh blow in their bid to challenge the Premier League’s ‘elite’ sides under new ownership.

Newcastle’s owners have been hit with their fair share of obstacles both before and since the club was taken over last October.

But the introduction of new restrictions to limit clubs’ spending in accordance with UEFA’s new financial rules is likely to slow down Newcastle’s plans to compete at the top of the Premier League backed by the Saudi Arabian Public Investment Fund.

According to The Times, Premier League clubs are set to be limited to spending a fixed percentage of their revenue on player wages, transfers and agent fees.

St James's Park, Newcastle (Photo by LINDSEY PARNABY/POOL/AFP via Getty Images)

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The Premier League is set to introduce phased spending with 90-per-cent of revenue available to spend on players for the calendar year 2023, 80-per-cent for 2024 and 70-per-cent from 2025 to be in line with UEFA’s guidelines.

This is likely to benefit the clubs already making a large amount of revenue while thwarting the clubs looking to bridge the gap.

Newcastle’s turnover between August 1, 2020 and June 30, 2021 (the most recent financial figures available for the club via Companies House) was roughly £140million. Under the new rules at 80-percent, Newcastle would be able to spend £112million on player wages, transfers and agent fees over a calendar year.

In comparison, Manchester City would be able to spend £456million under the same restrictions.

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Although revenue will increase significantly under new ownership, football finance expert Kieran Maguire has highlighted the negative impact the new financial proposals could have on clubs such as Newcastle.

“Introduction of a 'soft' wage cap (including transfer & agent fees) set as a % of income,” Maguire tweeted.

“This will bake in existing gaps within the Premier League and make it difficult for clubs with new owners such as Newcastle to challenge the existing elite.”

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So far in 2022, Newcastle have spent roughly £210million on transfer fees alone with the signings of Kieran Trippier, Chris Wood, Bruno Guimaraes, Dan Burn, Matt Targett, Nick Pope, Sven Botman and Alexander Isak.

In order to satisfy financial fair play regulations and limit spending, the club will pay the transfer fees in several smaller amounts over the duration of the players’ initial contract.