“Premier League Clubs Face Penalties and New Financial Rules to Ensure Stability”
Newcastle United narrowly avoided breaching Premier League Profitability and Sustainability Rules (PSR) by raising approximately £68 million through the sales of Minteh to Brighton & Hove Albion and Anderson to Nottingham Forest on Sunday night. Additionally, they are set to receive a fee for sporting director Dan Ashworth after agreeing on a compensation package with Manchester United.
The PSR permits clubs to incur losses of up to £105 million over a three-year rolling cycle. According to The Telegraph, Newcastle had a £60 million deficit in their accounts just 48 hours before the accounting period ended on June 30.
Minteh’s £33 million transfer to Brighton occurred only 12 months after Newcastle signed him for £7 million from Danish side Odense Boldklub. He leaves without having played a game for Newcastle, having spent the previous season on loan at Feyenoord.
Anderson, an academy graduate, was sold for £35 million to Nottingham Forest, matching the club record sale of Andy Carroll to Liverpool 13 years ago. This sale is considered “pure profit” in terms of PSR.
According to Craig Hope of the Daily Mail, Newcastle faced a potential 10-point deduction if they had not generated the necessary funds. At one point, the club even considered selling Gordon to Liverpool to cover the shortfall. Last season, Everton and Nottingham Forest both received points deductions for failing to comply with PSR.
Everton received a 10-point penalty in November for breaching PSR over the three-year period ending in the 2021-22 season. This penalty was reduced to six points on appeal in February. Subsequently, they were docked another two points for a second breach but managed to stay in the Premier League.
The Premier League plans to modify its financial rules. Last month, it was announced that clubs have agreed to trial a new League-wide financial system next season (2024/25) on a non-binding basis. The current PSR will remain in effect, but clubs will trial the Squad Cost Rules (SCR) and Top to Bottom Anchoring Rules (TBA) in parallel.
This trial will allow the League and clubs to fully evaluate the system, including UEFA’s new financial regulations, and to complete consultations with all relevant stakeholders.
The aim of the new system is to enhance clubs’ financial sustainability and competitive balance in the Premier League, encourage club aspirations, align with other competitions, and support clubs’ competitiveness in UEFA competitions, while providing clarity for clubs, fans, and stakeholders.
SCR will regulate on-pitch spending to 85 percent of a club’s football revenue and net profit/loss from player sales.
TBA will act as a League-level anchor linked to football costs, based on a multiple of the forecasted lowest central distribution for that season. It is designed to protect the competitive balance of the Premier League as a pre-emptive measure, only coming into effect if significant revenue disparities between clubs arise.
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