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News Flash: Newcastle Drops FFP Truth Bomb, wealthy Elite ‘Disruptors’ in Disarray
Even after a reorganization of the Premier League’s profit and sustainability regulations that appears to favor the status quo, Newcastle United’s expenditure will be restricted.
Among the “disruptors” who will be “most frustrated” by the Premier League’s new financial regulations is Newcastle United.
According to football finance expert Kieran Maguire, this is the case following premier league teams’ agreement in principle to replace the present rules that cap losses at up to £105 million over a rolling three-year period. The Premier League will use a squad cost ratio model, similar to that of UEFA, limiting the amount of money that may be spent on transfers, salaries, and agent fees to a portion of income.
The Premier League AGM in June will see a final vote on the new regulations. It is proposed that the rules, which may mimic the current ones during a transition period the following season, will restrict European competition clubs’ expenses to 70% of revenue, while clubs that do not qualify for the Champions League, Europa League, or Europa Conference League may spend up to 85% of turnover.
As a result of these clubs’ significantly higher revenue generation, the established order will still be able to pay out much larger sums than Newcastle.
Newcastle and Villa, whose owners are willing to spend a lot of money on fresh talent—that is, more costly talent, and so, theoretically, better talent—will be the clubs most frustrated, according to Maguire, who spoke with the Price of Football podcast. “We want to be disruptors, is definitely the response I’ve seen from those clubs’ supporters on social media. We want to challenge the existing elite and become the new Chelsea or Manchester City, but these rules will prevent us from doing so.
That represents the low point. Very little will change from how we currently work, other than the fact that your spending limit will be index linked—that is, if your revenue increases by 12%, so too will your ability to spend on players.”
