“We have to fall in line with PSR and we have to be very smart with what we do,” said Eddie Howe, when Newcastle’s transfer issues were raised in the wake of Saturday’s friendly defeat at Celtic. “We have to control the wages of the players that we have, and that all plays a part in who we can attract.” Does anybody feel like we’ve heard this before?
Clearly, the PSR rules are not doing the job they were supposedly created to perform. Initially described as a means of levelling the financial playing field and increasing the level of competitiveness within the Premier League, it has become depressingly clear that PSR, in its current form, acts to maintain and cement the status quo. It is a brake on ambition, strengthening the divide between the established order and any club, like Newcastle, who want to break through the glass ceiling. For as long as the current regulations remain in place, the Magpies will be negatively affected by them.
At least in the short-to-medium term, though, PSR is not going to disappear. The rules might be tweaked in the wake of last season’s ruling on Associated Party Transactions, delivered as part of a case brought to court by Manchester City, but the general framework will almost certainly remain in place. So, Newcastle can either continue to grumble about them, bemoaning PSR at every opportunity, or they can start to take action that might either challenge the existing regulations or at least mitigate their impact. As things stand, they do not appear to be doing the latter.
What can Newcastle do to address the current constraints? Clearly, they can’t overturn or ignore them completely. There are, however, short and long-term moves that could enable them to start fighting back against PSR. They just need to start showing some backbone, and perhaps a level of creativity that has so far been lacking.
In the immediate term, Newcastle’s position would instantly be improved if their income was to increase. That could mean selling players, and it is surely undeniable that the club need to become far more astute when it comes to player trading. There are other, opaquer, ways of altering the balance sheet too, though.
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At the end of last month, Aston Villa sold their women’s team to the club’s parent company, V Sports, for approximately £55m. The move mirrored a similar transaction previously carried out by Chelsea. From a position where they almost certainly had to sell someone ahead of the PSR accountancy deadline at the end of June, Villa moved to a place where they could keep their squad intact. Creative accountancy? Yes. Ethically questionable? Undoubtedly. But permissible under the current rules. Newcastle have a women’s team that has grown massively in terms of profile and status in the last few years. Did no one consider the benefits of cashing in?
The Saudi Arabian PIF are adamant they do not want to be seen as the great disruptors of the Premier League. They don’t want to break the rules. That’s fine. But identifying and exploiting loopholes within the current regulations has become a key part of an ambitious club’s arsenal. Newcastle haven’t even tried to see where any further grey areas might lie.
Then, there is the longer term. From the moment the PIF took control at St James’ Park, there has been an acceptance that growing commercial revenue would hold the key to achieving sustainable long-term progress on the pitch. There has been positive progress on that front, but the radical overhaul that was hoped for has not occurred yet, and it feels like some key opportunities have either been missed or not fully exploited.
Where is the training-ground sponsor that was talked about in some of the first interviews conducted under the current regime? What ever happened to talk about the naming rights at St James’ Park? Yes, renaming Newcastle’s home stadium would be controversial. But if it made the difference between signing a world-class striker or not, most fans would surely stomach a switch to ‘St James’ Park, in association with Saudia Airlines’.
And the stadium issue doesn’t end there. By March, the club were supposed to have made a final decision over whether to expand St James’ or build a new stadium, potentially on Leazes Park. The deadline passed, and since then, there has been silence. If increasing matchday revenue is such a key factor in moving the club forward, why has the stadium issue ground to a complete halt?
You can’t constantly complain about the effects of PSR on one hand, but then do little or nothing to mitigate its impact on the other. No one doubts that the current rules are not in Newcastle’s favour. They’re inherently unfair. But while other clubs try to deal with them, the Magpies appear to have meekly accepted their fate.