Football Finance expert claims Newcastle United are in 'far stronger' financial position 12 months after PSR scare

This time last year was a bleak time for Newcastle United as they weighed up drastic options like selling Anthony Gordon to Liverpool in order to comply with the Premier League's much-maligned Profit and Sustainability Rules.

Newcastle had a £70 million deficit to fill in their accounts to comply with PSR. Despite being the 'richest club in the world', Newcastle are bound by PSR's rules which only allow a club to make a loss of £105 million over a three-year rolling period, and after spending big in their first tranfser window as the club's owners, the PIF were banging their heads on the PSR ceiling.

In the end, Newcastle sold Elliot Anderson and Yankuba Minteh, despite nobody at the club wanting to have to make those deals. They also released Dan Ashworth from his garden to join Manchester United, and those three deals brought in enough money to avoid a points deduction.

A year on, and it's well known that Newcastle are in a far greater position and are hoping to spend again this summer.

Kieran Maguire sheds light on Newcastle's increased spending power

Football Finance expert Kieran Maguire has been speaking of Newcastle's increased spending power on Sky Sports, where he's said that he has no worries about Newcastle being able to spend this summer.

“Newcastle United have had three very quiet windows by their standards and the good news for Newcastle is, because PSR is set over a three-year period, that season 2021/22 where Newcastle lost over £70m that drops out of the equation on the first of July.

“I think that Newcastle are in a much stronger position this summer to compete once again in the market. They don’t have as free of a rein as the likes of Chelsea, but they are still in a far stronger position than they were 12 months ago.

“I don’t see any pressure on the club in a need to sell players before they start to bring anyone in. There could be some player trading, they have freed up some of their spots on the wage budget, but there’s not that very, very significant pressure as we saw with Anderson and Minteh leaving last June.”

Manchester United have been clever with their accounting

That £70 million loss dropping off the calculations is massive for Newcastle in terms of unlocking spending power.

It's also interesting to note what Maguire said about Manchester United on Sky Sports too, explaining how they are able to spend so much.

"Remember that when a club signs a player, the cost is actually spread over the life of the contract. So in the case of Matheus Cunha, it's £1m a month. So it's not £60m that's going out of the PSR calculation.

"We also need to remember that this is Manchester United, so sponsors still want to be associated with them. Fans will still flock to Old Trafford. And I think they will be anticipating a better season in the Premier League next season.

"And I think the third main issue is all of the focus has been on Manchester United PLC's accounts, which are registered in New York. And there we saw a loss of £131m last year. But that is not the company which is used for PSR purposes, because you've got to be based in the UK.

"It looks as if Manchester United have been using another company called Red Football, and the losses there were only £36m. So therefore, they're £100m better off for PSR purposes on the back of that."

We often forget the amortisation side of a deal, and that the fee paid isn't necessarily the big chunk out of the PSR budget we think it is. However, what's more telling is the use of creative accounting. Chelsea are the masters of this, and so far, none of these clubs have been done - where are Newcastle's subsidiaries for dodging PSR? Or is it one rule for them and another for us? Of course it is.