Exclusive: Aston Villa and Newcastle land financial blow after Premier League twist
Aston Villa and Newcastle United will remain “disadvantaged” by the introduction of the Premier League’s new spending rules, sources have told Football Insider.
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.
However, the Premier League’s salary-cap plans suffered a blow after its top-to-bottom anchoring (TBA) proposal only received the support of seven clubs.
The introduction of the TBA rules would have seen clubs only be allowed to spend five times the amount the bottom side receives on squad-related costs, such as wages, agents’ fees and amortisation.
What rules do Premier League clubs currently operate under?
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 United have faced PSR issues following their efforts to challenge at the top of the Premier League table.
The top-flight duo, who have both qualified for the Champions League in recent years, have been forced to sell some of their young stars to comply with the spending rules.
While both clubs are likely pleased to see the back of PSR from next season, it’s anticipated the introduction of the SCR rules are not going to make things much easier for them.
Sources have told Football Insider Aston Villa and Newcastle are expected to remain at a disadvantage to some of their rivals due to the 70 per cent cap on the clubs competing in Europe.
There is a belief both sides will have to consistently qualify for the Champions League if they want to be less restrained and compete financially.
Newcastle are competing in the Champions League this season, while Aston Villa are performing well in the Europa League.
How much revenue do Aston Villa and Newcastle generate?
There are nine Premier League clubs, including Aston Villa and Newcastle, already operating under Uefa’s version of the SCR rules.
Uefa confirmed in July both Chelsea and Aston Villa had breached its financial rules.
Chelsea were fined £26.7m and could be fined a further £51.2m if they don’t comply with the governing body’s rules in the next four years.
Meanwhile, Villa were fined £9.5m, with the potential of a further £12.9m penalty if they fail to comply in a three-year period.
The punishments related to a breach of Uefa’s football earnings regulations and the SCR rules, where clubs in European competitions were required to keep spending on player wages and fees to 80 per cent of their revenue in 2023-2024.
However, the control ratio dropped to 70 per cent last season and will remain at that level moving forward.
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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