Newcastle takeover: Club could spend £200m on new players without breaching FFP

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All associated with Newcastle United had reason to celebrate on Thursday as the long-rumored takeover of the club was finally confirmed.

The new owners at St. James’ Park are an investment group fronted by the Public Investment Fund (PIF) and also comprising PCP Capital Partners and RB Sports & Media.

In the works for over 18 months, the £300 million deal ends the deeply unpopular 14-year reign of previous owner Mike Ashley. However, the news with bigger implications for the rest of the Premier League is that the investment fund is reportedly worth a massive £320 billion – making the Magpies the wealthiest club in all of world football. 

Analysts are already predicting that Newcastle will go on a January spending spree in a bid to bolster their squad. 

The elephant in the room, though, is just how much the new owners will be permitted to spend in the immediate future – without falling foul of Financial Fair Play regulations.

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The crisis that has unfolded at Barcelona over the last few months serves as a timely reminder of just how badly things can turn out for a football club if it falls foul of FFP rules, with the Blaugrana unable to re-sign record goalscorer Lionel Messi to a new contract as a result of their breaches.

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ENTER GIVEAWAY

How much will Newcastle United’s new owners be able to spend under Financial Fair Play?

“For all that is wrong with Mike Ashley, I would love to be buying a club from him,” football finance expert Kieran Maguire told the Daily Mail when speaking about the current state of Newcastle’s books.

The club wasn’t particularly ambitious – or competitive – under Ashley but it was incredibly well-run from a business standpoint. 

FFP states that clubs must limit any losses to £105m over a three-year period. However, that limit will be increased thanks to the £38m profit that Newcastle have recorded over the past three years, together with a further £50m boost because of Ashley’s investment in academy infrastructure and community schemes – which are exempt from FFP.

“There is a lot of scope to increase the investment in Newcastle if the new owners choose to do so,” said Maguire, who also expects the club’s commercial revenues to grow substantially.

“Mike Ashley himself is a toxic brand when it comes to sponsors and Newcastle have struggled to match the growth of other clubs.

“There is now a lot of scope for an increase in commercial and sponsorship revenue and from Saudi Arabia itself. We saw that with Manchester City. They could sign deals in the area where the owners come from.”

Newcastle United quiz: Can you name the shirt numbers of these past & present Magpies players?

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What shirt number does Miguel Almiron wear for Newcastle?

All in, Maguire expects Newcastle to have well in excess of £200m to spend before they have to worry about FFP concerns.

In the hours since the news broke, bookmakers have already slashed their odds on the likes of Paul Pogba, Erling Haaland and Kylian Mbappe joining Newcastle by next summer. While that might be a little premature, Maguire insists that the Magpies must be taken seriously as a force in the English top-flight.

“Newcastle’s Premier League rivals should be petrified”, he said. “The other big clubs all want to get into the Champions League, and six into four doesn’t go. Seven into four is even harder!”

For Newcastle supporters, we reckon the new year can’t come soon enough. Exciting times look to lie ahead at St. James’ Park.

£200m WAR-CHEST | Can Newcastle spend BIG after £320BN Takeover? (Via The Football Terrace)

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