Newcastle United owners Jamie Reuben and Yasir Al-Rumayyan and Aston Villa owners Wes Edens and Nassef Sawiris learn £218m PSR bombshell after Aston Villa move blocked
Newcastle United would be allowed losses of £218m over a rolling three-year period if Premier League clubs were able to make the percentage of losses they were when PSR rules were first brought in
Newcastle United would be able to spend a great deal more – if clubs were allowed to make the percentage of losses they were when PSR rules were first introduced.
That is according to football finance expert Kieran Maguire after permitted losses have failed to rise in line with inflation since the rules were voted in back in 2013. Although Premier League clubs are trialling squad cost regulations and top to bottom anchoring in shadow, they remain restricted to losses of £105m over a rolling three-year period.
Aston Villa’s proposal to increase the limit to £135m was shot down last summer; Liverpool CEO Billy Hogan ‘didn’t see the sense in making that change’ while Brighton chief Paul Barber said that the prospect of ‘arguing about wanting to lose more money’ was ‘not one that any of us should sign up to’. Aston Villa were able to point to guidance from the Bank of England, who said the figure should be closer to £143m if general inflation was taken into account, yet Maguire has worked out it should actually be higher.
“It seems fair yet it was rejected,” he told the Price of Football. “Now why it was rejected was because all decisions being made are being made on a self-interest short-term basis. It makes sense from Villa’s perspective. The Aston Villa owners have invested heavily in players, in coaching staff and so on.
“So I got out my trusted spreadsheet and what I did is I said, ‘Right, why was this figure of £105m introduced in the first place?’ I’ve done a lot of research and it just appears to be a number plucked from nowhere so I said, ‘If it was deemed to be sustainable then let’s look at it in terms of metrics’.
“The losses of £105m based on the revenues of a club in 2013 were 29.4%. So what the Premier League said is if you are able to be sustainable, you are allowed to lose 29.4% of the total money that you bring in but if we move that forward to the most recent set of financials, that 29.4% drops to 14.1%.
If the Premier League was saying that 29.4% was a valid figure, let’s work that out based on current revenues and, according to my figures, clubs should be allowed to lose £218m over three years and they would be in exactly the same position as they were in 2013.”
