Aston Villa and Newcastle are now ‘disadvantaged’ after Premier League twist
Aston Villa and Newcastle United have faced issues complying with the Premier League’s spending rules in recent years.
At the latest meeting of the Premier League clubs on 21 November, the 20 top-flight sides voted 14 to six in favour – the minimum requirement for any motion to be approved – of the squad cost ratio (SCR) system being adopted from next season.
Under the SCR rules, clubs will only be able to spend 85 per cent of their revenue on squad costs, while that figure drops to 70 per cent for teams competing in European competitions.
It is understood Newcastle and Aston Villa voted in favour of the new spending rules, while Bournemouth, Brighton, Brentford, Crystal Palace, Fulham and Leeds United all voted against their introduction.
Aston Villa and Newcastle ‘disadvantaged’ under new financial rules
Former Man City financial adviser Stefan Borson exclusively told Football Insider Aston Villa and Newcastle will “remain disadvantaged” under the SCR system.
Premier League clubs currently operate under the profit and sustainability rules (PSR), where they are only permitted to make £105million of losses over a rolling three-year period.
Aston Villa and Newcastle have faced PSR issues after being forced to sell some of their young talents to comply with the spending rules.
Speaking exclusively to Football Insider, Borson said: “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 are competing in the Champions League this season, while Aston Villa are performing well in the Europa League.
Aston Villa face significant blow after financial reveal
There are nine Premier League clubs, including Aston Villa and Newcastle, already operating under Uefa’s version of the SCR rules.
Aston Villa were fined £9.5m by Uefa in July for breaching its financial rules, with the potential of a further £12.9m penalty if they fail to comply in a three-year period.
Borson revealed Unai Emery’s side could face an issue complying with the Premier League’s SCR rules if they don’t qualify for the Champions League.
“You have the double whammy for a club like Aston Villa, where they’re not in the Champions League, so they’ve got the 70 per cent limit cap, not the 85 per cent, and you don’t really get the revenue,” said Borson.
“If they were to get to the final of the Europa League, they’d get about £40m this year total. But Newcastle, City or any of the Champions League clubs will get probably already £40m.
“In fact, they are at £40m, and they’ll probably get £75-80m minimum just because of the way the system works now and the number of games and everything else.”
Newcastle smashed their club-record revenue in their latest published accounts for 2023-24 after their overall turnover surged to £320m, but their wage bill jumped to £219m.
Although Aston Villa also posted a record revenue of £276m in 2023-24, their wage bill stood at £252m, leaving them with little room to manoeuvre.
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