New ‘hurdle’ in FFP could put Newcastle at ‘a disadvantage’ after Premier League clash

Newcastle United could find themselves at a “disadvantage” as the Premier League considers setting a wage cap. That is the view of football financial expert Kieran Maguire, who believes that the potential adoption of new financial restrictions imposed by UEFA will make it difficult for any top-flight rival to beat the “Big Six”.

Premier League stakeholders met on Wednesday to discuss a set of reforms dubbed the Football New Deal, According to the Times. Potential renewals for cup competitions and parachute payments were said to be on the table, along with a salary cap to address increasingly dangerous pay-to-turnover ratios.

UEFA is set to introduce a cap in phases, starting with a 90% limit on the club’s total revenue when it comes to wages, agent fees and transfer costs. This will drop to 80% for the start of the 2023/24 season, and another 10% in the next campaign.

Read more: Newcastle, FFP ‘inflation’ and the truth behind Simon Jordan’s £400m transfer claim

The Times report indicates that the Premier League is likely to apply a similar set of rules, although not as stringent as the 70% seen in European competition. But given Newcastle transfers spending in excess of £200m across the last two windows, the new limit will inevitably provide another layer of already existing roadblocks to owners’ ambitions.

It’s really a case of where it happens . Maguire told ChronicleLive Newcastle She sees herself going. If the club wants to compete for European places, that puts them at a huge disadvantage.

“Football is a talent game and if you want to move into a more position you need to invest. That costs money, and that’s what we’ve seen transform Chelsea and Manchester City. That was the injection of money into the squad.

“The rules might not be there explicitly to create a closed shop, but implicitly it would make it very difficult. I think the view taken by ‘Big Six’ clubs or Super League clubs was that six to four don’t go. Seven to four makes things worse.

“From 2024 onwards, I expect the Premier League to take five places in the Champions League each season due to having two wildcards based on which countries had the best performing clubs in Europe in the previous season. From three with England, Spain and Germany perhaps.

“Six to five is better for the elites, but seven to five if Newcastle are going to be a contender means two teams are likely to miss. So, if there is a way to delay Newcastle United’s progress in terms of their ability to invest in talent, that is an outcome you won’t see tears shed in the halls. Big Six Club Boards of Directors.

“It’s a hurdle. Whether it’s a long-term hurdle… If Newcastle finish sixth and get into the Europa League, you can probably look forward to a good season in the region of £30m to £40m added to your budget. There are ways to score. progress, but I think an obstacle is the best way to look at it.”

Maguire estimates Newcastle’s turnover, based on the latest set of accounts held with Companies House, at £140m. This means that a cap of £112m is in effect on total wages, agent fees and transfer spend, should the new rules be introduced with an 80% limit.

Magpies’ latest accounts provide numbers from August 1, 2020 and June 30, 2021, and Maguire urges ‘caution’ in drawing sweeping conclusions from a year affected by the Covid-19 pandemic. The return of St James’s Park crowds and new business deals like Noun should boost that total.

However, Maguire believes the specter of a so-called soft wage cap will lead landlords to focus their minds on the need to improve Newcastle’s commercial revenue streams. The podcast host added about the price of football: “It’s going to be a lot more complicated and I think the only way Newcastle can look to be competitive in the long-term is to dramatically increase their revenue.

“There has been virtually zero growth in commercial revenue during the 14-year period of Mike Ashley’s stewardship of the club. I think the new owners are keen to address that, and we’ve already seen that with the Noon deal.

“Every deal that Newcastle sign is something that will help the club move forward. But of course the Premier League has tried to introduce rules that make it difficult for them to sign profitable business deals because it has to move beyond the team to what is the fair value.”

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