Alexander Isak is expected to remain at Newcastle this summer as the club’s Saudi Arabian ownership emphasise their determination to surmount the difficulties presented by Premier League spending rules.
As Darren Eales, Newcastle’s chief executive, announced a broadly positive set of 2023-24 accounts he said the club’s progress was being slowed appreciably by the profitability and sustainability rules that allow teams to post collective losses of up to £105m over a three-year cycle.
This favours long-established elite clubs with the largest commercial revenue streams and often advantageous geographical locations including London and Manchester. A more isolated rival situated in a deprived region such as the north-east can struggle to catch up, even if, like Newcastle, they are owned by Saudi Arabia’s Public Investment Fund.
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“PSR is really supposed to be about sustainability but it’s a system that favours those with bigger revenues,” said Eales who, after a diagnosis of blood cancer, is “doing well” and working an extended notice period. “We could put funds into an extra account that could show we wouldn’t go bust but the way the rules are now we have to grow incrementally.
“The fact we’re in our second Carabao Cup final in three years and two points off a Champions League place show we’re growing but it’s frustrating in the sense that our progress since our takeover [in October 2021] could have been quicker if things were different. PSR in its current form is challenging.”
Although Eddie Howe has not been able to sign any regular first-team players for the past three transfer windows, Newcastle seem in a position to restock the manager’s squad after overall losses fell to £11.1m in the 12 month accounting period to 30 June 2024, down from £71.8m the previous year.
That reduction was largely down to a 28% increase in revenue to £320m. Given that Manchester City command more than double that figure, Newcastle know that, to compete properly with City, Liverpool, Arsenal, Tottenham et al they will almost certainly need to move to a new stadium or redevelop St James’ Park. The Saudis are considering detailed plans for both options and a decision is expected shortly.
Eales suggested such expansion would mean the club could aim to encourage wealthy corporate fans to fly to the north-east on match-days. “It would allow us to have more fans in and, while helping make some tickets more affordable, would also enable us to provide that level of [corporate] hospitality that would be able to perhaps get more people up from London for that high-end corporate market,” he said.
There are unconfirmed reports that PIF is buying a 49% stake in Newcastle airport and Eales eyes that option as a gateway for new fans. “If Newcastle airport can grow that would be great for everybody,” he says. “Anything that helps this region helps the club and vice versa. The more we can put Newcastle on the map, the more jobs and investment we can create here. We’re conscious of Newcastle United being a beacon for the city and the region.”
He hopes the club will also become a magnet for leading players and will strive to retain Isak, Sandro Tonali, Bruno Guimarães and the rest of Howe’s leading performers.
“We’re not under the gun to sell any of our key players – it would be crazy to consider it,” said Eales, who confirmed Newcastle would be building a training ground at an undisclosed location. “They’re all under long-term contracts.”
He added that discussions with Isak regarding a contract extension would open in the summer. “We know he’s a world class player and others, obviously, covet him,” he said. “But it’s annoying because it’s almost as if we’re seen as a club in the next category down and it’s fair game to talk about our players leaving.”
Regular Champions League football could alter such perceptions. “We hope to be in Europe next season,” said Eales. “That’s our aim; it gives us the revenue and the profile. We’d love to win a trophy too. We’re striving to be at the top table. We’ve got a great coach in Eddie so the future is bright.”
It could, though, be expensive for some fans after Eales declined to commit to freezing season-ticket prices amid the cost of living crisis. “We’re trying to compete with teams that have much bigger revenues so it’s a balancing act,” he said. “We want to give Eddie the resources to compete but we’re also aware of where we are in the country”
