Skip to main content

Rules help maintain the Big Six cartel

Newcastle United face Aston Villa on Sunday as two teams who have come closest to breaking the dominance of the so-called ‘Big Six’.

This term has been used to refer to Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur, who have regularly finished in those places in the Premier League and therefore received the benefits of European football that come with it. Though some of those clubs have fallen down the division regularly in recent years, the financial aspect of their advantage largely remains.

 Undoubtedly the single-biggest impediment to Newcastle’s growth has been financial regulations. The idea that they would become the “richest club in the world” was also a fallacy — yet even if they wanted to call upon the full resources of their mega-wealthy owners, they would be unable to do so.

While Chelsea and Manchester City could keep spending following their respective takeovers in 2003 and 2008, Newcastle were forced to sell players against their wishes in June 2024 to comply with PSR. Those same rules, alongside UEFA’s, have also limited Newcastle’s ability to greatly expand their wage bill or continue to invest in the market.

The Premier League’s new squad cost rules (SCR) which are being introduced next season, will aid Newcastle to an extent — they voted for them, although they also wanted top-to-bottom anchoring and will continue to push for its introduction — but they will not be truly transformative.

Newcastle have not followed Villa or Chelsea in using apparent loopholes to circumvent PSR. Newcastle have not sold any of their own assets to themselves, while they have also yet to really exploit their relationship with PIF. In 2023-24, only £22.6m of their commercial revenue came from PIF-related companies, which represents just 27 per cent of the total.

 Villa sit in the exact same boat. It is not lost on senior figures at the club that a fundamental reason why clubs like Chelsea and Manchester City made such rapid growth was because they made hay while the sun shone — that is, when there were not many, if any, regulations.

Villa have been at the forefront of wanting to change the PSR threshold for how much a club can lose over three years and were big proponents of the SCR rule being introduced to the Premier League, even though their wage-to-turnover ratio stood at 91 per cent last season.

Although that has since decreased, missing out on Champions League football — as they did last season — makes a huge difference. Senior figures believe it left a £70million hole in their finances last summer, impacting revenue and with wage-to-turnover ratio rising once more.

To navigate these rules, Villa relied on selling homegrown talents in the summer of 2023, performing separate player transactions with clubs in a similar predicament last season — there were player swaps with Juventus, Chelsea and Everton in 2024. Last summer, Villa sold their women’s team to their ownership, V Sports, assisting with meeting PSR.

 

Labels:

Comments

Post a Comment

Popular posts from this blog

Fulham requires big funding from owner

After lengthy delays, Fulham’s shiny, new Riverside Stand has finally opened, creating “a unique Thameside destination with first class facilities for supporters and partners on match days, as well as for the wider community year-round”. This ambitious project has increased Craven Cottage’s capacity by around 4,000 to 29,600, while it has also taken advantage of the club’s fantastic location and wealthy catchment area by including two Michelin star restaurants, a rooftop swimming pool, corporate hospitality and event space, all benefiting from views of the Thames. Chief executive Alistair Mackintosh observed, “Fulham is the sort of club that can have a business class or first class and have fans that turn left on a plane.” Indeed, there is also an exclusive members club – with a football season ticket as an optional extra. It’s fair to say that “the times they are a-changing”, as this is a long way from the traditional pie and a pint. However, in a world where clubs face the tw...
Post a Comment
Read more

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...
1 comment
Read more

A poor financial record, but new hope at Everton

I recently saw an amusing video online in which a group of Everton fans were rebuked in jest for being hopeful.  Football fans in general tend to swing between excessive optimism and excessive pessimism, but for many it seems that moaning is in their bloodstream (Spurs fans probably take the trophy).  However, Everton fans have had plenty to moan about on and off the pitch.   Let’s hope that a new era is about to begin for this grand old club. Everton’s 2023/24 financial results covered a fairly momentous season, when they ended up 15th in the Premier League, though they would finished three places higher if they had not received an 8-point deduction for breaching the Premier League’s Profitability and Sustainability Regulations (PSR). It was a worrying time for Everton fans, as the club faced a “perfect storm” of issues, including large financial losses, an ever increasing debt burden, a challenging stadium build and the tortuous sale of the club. There were eve...
Post a Comment
Read more