Newcastle United to remain 'disadvantaged' under new financial regulations according to Stefan Borson
As a Newcastle United fan, we suspect that you're probably very happy that we'll soon be seeing the back of Profit and Sustainability Rules.
PSR was the reason we were forced to sell Elliot Anderson and Yankuba Minteh when everybody at the club wanted them to stay.
It's also seen by many as the main reason Newcastle are struggling to close the gap on the 'Big Six'. So when it was announced recently that it would finally be ditched, there was a lot of hope from Newcastle fans.
Aston Villa fans are in a similar boat. Both clubs feel like they're on the cusp of something big but can't break through that financial ceiling.
Newcastle won't be any better off under the new system until they are regularly competing in the Champions League
Both clubs voted in favour of the new Squad Cost Ratio rules set to replace PSR, which enables clubs to spend up to 85% of their revenue on football-related expenses, although that drops to 70% when competing in UEFA competitions. However, football finance expert Stefan Borson told Football Insider that he doesn't believe that Newcastle or Villa will be any better off under the new system.
“I think Aston Villa and Newcastle, who are often seen as the clubs who are most disadvantaged by the PSL system, will remain disadvantaged by this one.
“Although it takes out certain elements within the profit and loss, so you don’t need to worry anymore about interest, you don’t have to worry anymore about the other operating costs of a business outside of the first-team squad, you don’t need to concern yourself about those costs from this perspective.
“They’re still going to be tight because it’s based on total revenue ultimately, and total revenue at those clubs until they can consistently get into the Champions League is materially lower than the big six. If you’ve got less at the top, you’ve obviously got less budget.”
Newcastle really need to stop messing about and get some key sponsorship deals done
Newcastle's inability to secure a training kit, training ground and stadium sponsor is also a big reason why the Magpies are at a disadvantage, as those three things would increase the club's revenue dramatically.
While we understand that the club have been cautious not to take a low bid and ultimately drive down their own worth, surely some money is better than none, and it at least gives them a basis to start from when it comes to re-negotiating.
The money they make from those deals would ultimately help them have more money to improve the squad, which in turn gives them a better chance of regularly qualifying for the Champions League, which in turn boosts the revenue again. Or am I just being silly?
