Q&A Why miserly Ashley is to thank for £190m budget

How can Newcastle spend £190 million in January and comply with Financial Fair Play? Perversely, it is thanks to Mike Ashley and his disinclination to spend big on facilities and players in recent years. In England, the so-called “profitability and sustainability” governance allows clubs to lose

£15 million over a rolling three-year period, but this increases to £105 million if the owner puts in equity investments of £30 million a year, which the Saudis will do. Further allowances of around £50 million are made for the club running an academy.

Given that Newcastle have returned a profit of £38 million over the past three years – courtesy of Ashley spending the lowest amount in the Premier League on facilities and players – that will “immediately” give the Saudis a total transfer budget of around £190 million, according to Kieran Maguire, a football finance lecturer at Liverpool University and presenter of the Price of Football podcast.

Market conditions appear ripe to buy in players straight away, but Maguire warns: “I would anticipate a ‘Newcastle premium’ from any club that’s selling.”

How can Newcastle compete with Paris St-germain and Manchester City long term? Transforming commercial appeal. In 2007, when Ashley bought the club, Newcastle’s commercial revenues were £28 million and in the last pre-covid year, 2019, they were still

£28 million.

“It shows that sponsors and commercial partners didn’t want to associate themselves with Newcastle because they were aware that there was a toxic relationship between Ashley and the fan base,” Maguire adds. “All of that disappears when he goes.”

How might it still go wrong?

Amanda Staveley and co might take note of FFP difficulties at Wolves and Everton, who have both invested heavily in pursuit of quick success. Uefa has stricter rules on FFP, and qualifying for the Europa League or below is not ideal as clubs look to balance the books. Farhad Moshiri’s initially lavish spending at Everton has also caused the club headaches. “After the first three years, that’s when FFP really starts to bite,” says Maguire. “It’s been noticeable that they’ve not spent this summer.”