Newcastle and Aston Villa face ‘big’ PSR issue after update – Stefan Borson
Aston Villa and Newcastle United have both struggled to comply with the Premier League’s spending rules over the past couple of years.
The Premier League duo were forced to sell players before last year’s 30 June accounting deadline to ensure they didn’t breach the profit and sustainability rules (PSR).
Under the PSR rules, top-flight clubs are only permitted to make £105million of losses over a rolling three-year period.
It had been anticipated the squad cost ratio (SCR) system of financial control – which is currently being trialled alongside top-to-bottom anchoring rules (TBA) – would be adopted for next season.
But the PSR rules are set to remain in place for 2025-26 following Manchester City’s latest legal challenge against the associated party transaction (APT) rules.
Finance expert Stefan Borson exclusively told Football Insider Villa and Newcastle would likely face issues complying with either system because of their “big” wage bills.
Deloitte’s 2025 Money League revealed Villa’s wage bill surged from £194million to £252million last season, while their revenue increased from £218million to a new club-record figure of £265million.
Newcastle’s wage bill also rose from £187million to £215million for 2023-24, with their revenue jumping from £250million to £316million.
Aston Villa and Newcastle could struggle under new system
Borson insisted Premier League clubs that have faced PSR issues will likely also struggle under the SCR system.
He told Football Insider: “First of all, it’s quite hard to compare because we never had details of what the squad cost control system would look like in the Premier League.
“We know what it looks like in the Uefa system and you would think it would be quite similar, but it doesn’t need to be exactly the same. Then there are some wrinkles around it, where we were told that the standard cap would be 85 per cent.
“You would have at the top of the equation your costs, and that would be first-team costs and amortisation. Then at the bottom, you would have revenue, profits on player sales and your ratio could be 85 per cent.
“It was then to drop to 70 per cent if you were in the European competitions because that’s what the limit is in the Uefa competitions.
“The problem with that is that might be fine if you’re in the Champions League because you know that in terms of your revenue, you’re going to get another £60-100million broadly by the time you’ve had your group games and everything else.
“That’s not the case if you are in the Europa Conference. If you win the Europa Conference, you’re probably doing £10million total and you’ve got a load of costs because you’ve got to fly the squad all around Europe for about 15 games, which is not cheap. People forget about how expensive this sort of stuff is.
“I think the best way to consider it is that the reality at the moment is probably that those clubs that struggle under PSR, particularly those teams that are in that transitional phase like Newcastle and Aston Villa, is probably broadly neutral.
“Both systems are quite hard for them to hit because both of them have got this big issue with the wage bill.”
Aston Villa set for £11m hit after done deals
Football Insider revealed on 5 February Villa have added more than £11million to their wage bill following their late loan deals for Marcus Rashford, Marco Asensio and Axel Disasi in the January window.
Newcastle, however, had a quiet month after failing to add any new signings to their squad due to their PSR issues.
Villa currently sit ninth in the Premier League, but they are into the last 16 of the Champions League following their impressive displays in Europe.
Meanwhile, Newcastle are seventh in the table after winning just one of their past four league games.
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