Eddie Howe has declared it is 'great to hear' that Newcastle United will 'spend to the max' this summer.
Newcastle announced revenues of £320.3m this week, which represents a club record and a 28% increase year-on-year. Although Newcastle's summer budget will be influenced by whether the Magpies qualify for the Champions League, or not, these healthy accounts from last season remain part of Newcastle's overall three-year cycle going into the upcoming window, which CEO Darren Eales said makes it 'easier' to 'invest in the future'.
Following a series of frustrating windows, Eales reiterated Newcastle would 'spend to the max' within PSR rules and the CEO is 'excited' for the summer ahead because of the alignment between Howe and sporting director Paul Mitchell about the profile of targets. Howe has clearly had more pressing issues to contend with than combing through the club's financial accounts - not least coming up with a game plan for West Ham and beyond without Sven Botman, Lewis Hall and Anthony Gordon - but has the Newcastle boss taken encouragement from Eales' words?
"You misread me there," he quipped. "I was powering through the numbers.
"It's good to see the revenues are going the right way. We're doing what we can in terms of trying to expand all our income growth and the club have said many times that they will always try to maximise the spending allowed under the current rules, which is great to hear. A lot of progress has been made. There is still more progress to go."
That is for sure. Although Newcastle's revenue has nearly doubled from £180m in 2022 to £320.3m in 2024, the Magpies still have a long way to go to match Manchester City's haul of £715m.
Newcastle's commercial income may have increased by a whopping 90% year-on-year, to £83.6m, but, for context, Manchester City brought in £344.7m in sponsorship deals in the same period. These huge revenues helped Manchester City to spend £412.6m on wages on the way to winning a fourth successive title last season whereas Newcastle's salary bill stood at nearly half that (£218.7m).
Given how clubs who spend more on wages pick up more points, historically, Newcastle are going to have to continue to be smart to buck the trend, particularly after the Premier League decided against holding a vote on changing the PSR rules for next season. Newcastle, as a result, will continue to be restricted to losses of £105m over a rolling three-year period while trialling squad cost rules and top-to-bottom anchoring in shadow.
This figure has not risen in line with inflation since the regulations were introduced way back in 2013, which has hit clubs like Newcastle 'hardest' in the words of football finance expert Kieran Maguire. In fact, Maguire previously likened Newcastle's situation to a 1,500-metre race where Howe's team have 'effectively got to run an extra lap behind everyone else'. That view was echoed this week by former Crystal Palace owner Simon Jordan.
"What is more sustainable than Newcastle United given who owns them?" he asked on talkSPORT. "What is it that you're doing by stopping Newcastle from spending the way they choose to in order to be able to build their football club the way they want to?
"What have they achieved by this governance? Have they saved anybody? Have they created anything better? No.
"What they have created is contraventions of rules; people spending money that have been sanctioned as a result of it; people not investing money in football; and the actual spend pattern slowing down, which I'm quite for at times, but what it's doing is Newcastle are sat there now.
"How do Newcastle get from £320m turnover to £700m like Man City? The runway has been shut. It was shut latterly on Man City. It was never shut on Chelsea."
