Magpies will avoid FFP investigation

NEWCASTLE United will not face a Football League Financial Fair Play investigation, despite the huge losses the Magpies sustained in the Championship.

In the club’s annual accounts for the year ending June 30, 2017, Newcastle made an operating loss of £90.9m as the Magpies maintained a Premier League budget in the Championship to help Rafa Benitez win the title.

There had been fears United could potentially be fined, or even given a transfer ban, as a result of these figures.

However, it is understood the EFL is not investigating the Magpies for breaching rules.

Club sources are confident they did not breach any of the regulations, given the Football League would have needed to launch an investigation by March had they suspected Newcastle, and no such examination has taken place.

That is despite close scrutiny of United’s accounts.

Although second-tier clubs are only allowed to lose an average of £15m per annum over a threeyear cycle, those relegated from the Premier League are permitted to make losses of up to £35m in respect of the time they spent in the top flight.

Therefore Newcastle’s £90.9m losses, although significant, did not breach regulations given their previous six-year stint in the Premier League.

However, had the Magpies failed to secure promotion at the first time of asking under Benitez, then it is understood a dramatic and rapid cost-cutting exercise would have needed to take place to ensure United complied with FFP.

The highest-ever wage budget in the Championship – totalling £112.2m, three times that of Brighton and Hove Albion’s and six times Huddersfield Town’s – would have been slashed.

A significant reduction in staff numbers, as well as a likely fire sale of players, would have been necessary.

Managing-director Lee Charnley admitted in a statement accompanying the confirmation United had finally filed their accounts that Newcastle had taken a “financial gamble” to return to the Premier League immediately.

Owner Mike Ashley injected an additional £15m worth of interest-free loans into the club – he is now owed £144m by the Magpies – but still huge losses were sustained.