A football finance expert has hit out at the ‘farcical’ Premier League financial rules that have limited clubs like Newcastle United in the transfer market.
Kieran Maguire believes the cap of £105million losses over a rolling three year period for Premier League clubs that was introduced over a decade ago is in need of updating to reflect inflation. Maguire argues that the cap had ‘no logical justification’ when it was introduced and has restricted many clubs, including Newcastle, in the transfer market.
Over the summer, Aston Villa lobbied unsuccessfully to raise the permitted losses to £135million to reflect the Bank of England’s guidance on inflation which would see the £105million cap introduced in 2013 now worth £143million. But the change was ultimately blocked with Villa owner Nassef Sawiris suggesting taking legal action against the Premier League for the rules.
Newcastle have spent significantly since the 2021 takeover led by the Saudi Arabian Public Investment Fund but their activity in the transfer market and PIF’s spending power has been limited by Premier League Profitability and Sustainability Rules in recent windows. Over the summer, the club felt they were forced to sell Elliot Anderson and Yankuba Minteh in order to satisfy the allowable losses threshold and avoid a points deduction.
Newcastle and Villa have managed to disrupt the so-called ‘established elite’ in the Premier League by qualifying for the Champions League in recent seasons despite having smaller wage bills, transfer budgets and commercial revenue.
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