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Newcastle and Villa both hit by PL rules but have different responses

One issue that has surrounded financial fair play rules is whether they are really designed to protect the position of existing top clubs and prevent well-funded aspirational clubs breaking through the glass ceiling.   If that could be shown to be the case, the courts could rule that the Premier League’s rules are a breach of competition law by a private entity that has facilitated cartel activity.

Newcastle host Aston Villa, a meeting of the division’s aspirational interlopers, who both recently ended long waits for silverware and each qualified for the Champions League twice. Both have found their pathways blocked by more stringent rules than those faced by City.

Newcastle’s takeover, which was led by Saudi Arabia’s Public Investment Fund (PIF) and completed in October 2021, brought an immediate stiffening of the Premier League’s rules, with fellow clubs concerned they would use their extraordinary wealth to game the system.

Having spent big in a bid to avoid relegation and then again when they qualified for the Champions League at the end of Eddie Howe’s first full season, Newcastle bumped up against those rules. Minds were focused further when Everton and Nottingham Forest were docked points for breaching the Premier League’s profit and sustainability rules.

Villa, who are owned by billionaires Nassef Sawiris and Wes Edens, have faced similar issues, their progress slowed by selling key players and reducing their recruitment budget. It has forced a more patient approach, whereby Villa are constantly in communication with the Premier League and UEFA, checking every transfer so they are not sanctioned too heavily.

The European dimension

The respective settlements of both clubs with UEFA have forced much of their business, given that the less-generous European-level rules are far more restrictive than SCR.

The Europa League was the zenith of the Emery era, but it was also the end of its first phase. Big sales were necessary, even despite qualifying for the Champions League, and 10 players were sold for more than £300m combined, including automatic starters Morgan Rogers, Youri Tielemans, Ezri Konsa and Emiliano Martinez (with all four moving to legacy ‘Big Six’ clubs).

Around £250m went out on nine signings, but Villa brought in more than they spent and many of their highest earners departed, given wages are the constant in SCR calculations. Having previously been among the Premier League’s most-settled sides, Villa went into a period of rapid transition, which came about quicker than Emery envisaged.

Newcastle also saw a dramatic change in approach, the pace and severity of which eventually led to Howe’s pre-season exit. David Hopkinson, Newcastle’s CEO, subsequently described the tweaked blueprint as “Newcastle 2.0” to the New York Times.  Matthias Jaissle, who replaced Howe, repeatedly refers to the “brave transition” towards a far younger squad. Asked about his view on the rules on Thursday at his pre-match press conference, Jaissle said: “We cannot control anything else. There are the rules, we follow them and do the best.”

At St James’, much of this new path was calculated; determined once they lost around £60m season-to-season due to their 12th-placed finish and failing to qualify for Europe. “It is time to look at the lifestyle and make some short-term adjustments in order for us to compete for those trophies again on a consistent basis,” Hopkinson said.

Around £245m was recouped from player sales and, although they did not want to sell Bruno Guimaraes, Anthony Gordon’s departure was necessary to comply with UEFA’s rules and Sandro Tonali’s exit facilitated a rebuild. “You can’t win if you are not allowed to participate in those tournaments,” Hopkinson said.

Supporters have noted that during City’s swift build-up phase, they took Villa’s best players. Gareth Barry joined Manchester City in 2009 and reportedly doubled his salary to £100,000 per week. The following year, James Milner moved in the same direction. Both departures torpedoed Villa’s progress after showing exceptional promise under Martin O’Neill, who qualified Villa for Europe.

Villa have typically taken a more liberal stance in wanting less regulation. This is chiefly due to having owners who are such willing investors, desiring to spend big but being unable to do so because of the rules. Villa tried and failed to get the previous PSR limits raised (from £105m to £135m over a three-year period), too.

Villa have been keen for the rules to generally be relaxed, therefore permitting greater owner investment, Newcastle, at least in the short-to-medium term, seem keener to limit the amount elite clubs can spend while they try to make up further ground revenue-wise.

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