Newcastle in hot water over PSR even after Alexander Isak sale – finance expert
The huge sale of Alexander Isak in the summer transfer window will not benefit Newcastle immediately in the January transfer window.
That is according to football finance expert Dr Dan Plumley who exclusively told Football Insider that Newcastle will have to consider UEFA squad cost rules now they are back in the Champions League.
Isak was sold to Liverpool for £125million, but Newcastle still have PSR concerns despite such a large sale.
Newcastle’s 3-1 defeat at Brentford currently has Eddie Howe’s side just two points above the relegation zone with pressure mounting on the Toon boss.
Champions League ‘vitally important’ for Newcastle
Speaking exclusively to Football Insider, Plumley believes Newcastle will not spend heavily in the January transfer window, with UEFA squad cost one of the reasons why.
“The numbers wouldn’t suggest to me that they could spend heavily. I think they have still got to be careful,” Plumley said.
“We know they’ve had issues running up against PSR. We saw some of their deals. Elliott Anderson went to Forest a homegrown player for pure profit in the last couple of years, so we know we’ve had to work on the margins.
“I think the other thing I would throw in is UEFA squad cost. We know the Premier League is still doing PSR this year.
“I still think it’s likely that changes in the future, and they are on the UEFA squad cost rules as well now being back in the Champions League.
“From the outside looking in, if you look at the position of Newcastle against squad cost for 2024, you can get it to around an 80% squad cost ratio, and UEFA want that to be 70% by the end of this season, 2025-26. So they’ll have to be monitoring this with UEFA.
“I think with the Isak situation that brings a reduction in wages, it’ll lower the amortization charges, which is what squad cost looks at but they have signed [Nick] Woltemade so there’s a net trade off there.
“I think it’s more a case of they will probably be okay, but they’ve got to be careful of squad cost, and, obviously, PSR as well with where the Premier League are at.
“So I wouldn’t expect them to be spending huge amounts in January.
“This is where you have seen Newcastle, they have been very vocal about PSR in the Premier League and how it’s stopping them from competing and bridging that gap. And Aston Villa have said the same.
“The biggest clubs are still reliant on it, but, obviously, if you get into the Champions League and you do it consistently, not only are you in a better spot financially, but also you need to keep doing it.
“For those clubs not having European football is one of the, you know, big weak points that you would identify in a season, and Newcastle are in that bracket now.
“When you get to that level, it’s great, but you’ve got to stay there.
“So, yeah, they’ll absolutely be targeting the Champions League again this year because that produces the increase in revenue that allows you to do more against squad costs for PSR. It’s vitally important for them as well.“
Newcastle fighting for Champions League spot
The Newcastle squad have asked questions of their away record, as Howe’s side have not won the road since April in the Premier League.
Newcastle are currently seven points off the Champions League places, with their away form needing to improve quickly if they are to mount a top four challenge.
Failure to qualify for next season’s Champions League could put the Toon back to square one in their bid to improve their PSR position.