Newcastle United owners the Saudi Public Investment Fund are set to cut their investment in football.
The Premier League’s Profit and Sustainability Rules (PSR) have hindered PIF’s efforts to grow Newcastle into one of the largest teams in the world of football since their acquisition in 2021.
Even though the team did well in their first season under Saudi ownership and advanced to the Champions League, they still had to hustle to meet the PSR deadline of June 30.
Last week, TBR was exclusively informed by football finance expert Kieran Maguire that Newcastle will be restricted to spending a maximum of £255 million on signings and wages due to impending changes to the PSR system.
To put things in perspective, their pay cost alone in 2022–2023 was £187 million, and it will have increased by 15% to 20% as a result of their advancement into Europe’s top club competition.
The club’s future is questionable as a result of Amanda Staveley, the creator of their PSR compliance plan, departing St. James’ Park.
Furthermore, supporters of Newcastle who hope to see their teams show off their financial might in the transfer market may be disappointed by the most recent events in the Middle East.
PIF to scale back domestic spending
In the last year, the Saudi Pro League, whose teams are mostly owned and run by PIF, has spent billions on high-profile transfers.
If it weren’t for PSR, they would love to spend on Tyneside at the same level that made players like Cristiano Ronaldo and Neymar possible.
However, in reaction to the nation’s economic crisis, PIF may reduce expenditure on its domestic football business, according to a study by industry analysts AGBI.
In addition, PIF declared earlier this month that they would be selling eight football teams, suggesting that they may be thinking about adopting a more cautious strategy.
The research indicates that PIF would not exclude football from its overall budget reduction, even with the World Cup being hosted by Saudi Arabia soon to come.
That could have some bearing on Newcastle.
TBR Analysis: How will PIF’s economic plans affect Newcastle?
Even if the Public Investment Fund’s expenditures amply demonstrate their dedication to improving their home league, Newcastle remains the jewel in the crown.
Although there may be unintended repercussions, the club is unlikely to be directly impacted by the most recent prediction regarding the slowdown in Pro League expenditure.
It may, for starters, lessen the likelihood of PSR-busting sales to Pro League teams.
Additionally, it may restrict the business prospects in the Gulf state, which Newcastle has well utilized during PIF’s three years at the team.
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