Football finance expert gives budget Newcastle allowed to spend in next transfer window after takeover
With what appears to be an imminent Newcastle United takeover, fair to say that when it comes to the next transfer window, expectations have been raised.
Predictably, you get attention seeking clickbaiting media debating whether Harry Kane will be on his was to Tyneside ahead of next season.
Safe to say though that Newcastle United won’t be paying £200m for a player in 2020.
However, assuming that the takeover happens, it will be a massive surprise if there is not serious money spent by NUFC on improving the team / squad.
The question is, just how ‘serious’ will the money available be to spend?
Well, even though Newcastle United may well end up with the wealthiest owners in the Premier League and indeed in world football, there are still rules restricting expenditure.
For Premier League clubs, under FFP (Financial Fair Play) rules they are allowed to lose up to £105m over the course of three years. So effectively, you can on average overspend by £35m per season and not be at risk of any sanctions.
Of course, under Mike Ashley, worries reckless overspending by Newcastle United, especially on players, has never been something to give fans sleepless nights.
So just how much of a financial punch will/would new NUFC owners be allowed to land in this next transfer window AND stay within the rules.
Well, football finance expert Kieran Maguire has been looking at the possibilities / probabilities.
He makes the point that ironically, due to the way Mike Ashley has ran Newcastle United, the Saudi PIF / Reuben brothers bidders will be able to spend MORE money than otherwise would be the case.
Kieran believes a basic budget of £150m would be possible in this next transfer window as well as paying ‘decent wages’, yet still ‘adhere to FFP’ rules.
This is due to Mike Ashley having made profits at Newcastle United in recent years, which will then allow bigger losses to be made for the 2020/21 season, if that is what the prospective new owners want to do. So overall, Newcastle United losses would need to be no higher than £105m for the combined 2018/19, 2019/20 and 2020/21 seasons.
That basic £150m 2020/21 transfer budget could of course be increased further, if/when the revenues increase this coming season. For example, both shirt and kit sponsor deals are up for renewal at the end of this current season and if the Saudi PIF led bid does take NUFC over, then you will imagine the revenues will be far higher than before, especially when it comes to the shirt sponsor.
Revenues could also be significantly increased with player sales, a lot more of which would seemingly be guaranteed if Newcastle United were going on an ambitious spending spree.
Important to also point out, when it comes to clubs making losses that could break Financial Fair Play rules, there are items that aren’t included.
Spending on youth development and infrastructure (St James Park and training ground etc) are exempt.
Mike Ashley hasn’t allowed a penny to be spent on any of these that he didn’t have to but with these potential new owners, I think it would be nailed on that we would see substantial investment, none of which would count towards the losses that impact FFP.
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