Newcastle ‘can spend £500m without breaching PSR’ as Eddie Howe wins Paul Mitchell transfer power struggle
Eddie Howe Set to Play Bigger Role in Transfers as Newcastle Prepares for a Pivotal Summer
With the imminent departure of sporting director Paul Mitchell, Newcastle United are poised to see head coach Eddie Howe take on a more prominent role in shaping the club’s transfer strategy. As the Magpies prepare for a crucial summer window, all eyes will be on the decisions made at the top — and Howe’s influence may be greater than ever before.
Despite a narrow 1-0 loss to Everton on the final day of the Premier League season, Newcastle secured qualification for next season’s UEFA Champions League. This return to Europe’s top competition is a monumental achievement and serves as a major boost for the club both financially and reputationally.
That qualification could prove vital in keeping hold of key talents like Alexander Isak and Bruno Guimaraes — two players whose performances have not gone unnoticed by Europe’s elite. Both are widely seen as deserving of a Champions League stage, and Newcastle’s return to the competition offers them a compelling reason to stay, at least for another season. In Isak’s case, there is even optimism that he could extend his stay at St James’ Park by signing a new long-term contract.
Uncertainty Around Summer Transfers
However, as the summer transfer window approaches, there remains an air of unpredictability around how Newcastle will operate. The club’s fans may find themselves unsure of what to expect in terms of spending, especially with Mitchell’s departure and the looming financial restrictions tied to Profit and Sustainability Rules (PSR).
The key question is: How much can Newcastle realistically spend?
According to Adam Williams, Head of Football Finance at TBR Football, the situation might be more encouraging than many expect. Williams has analyzed Newcastle’s financial position under PSR guidelines and suggested that the club has significant room to maneuver.
“Newcastle posted an £11 million loss in the 2023–24 financial year,” Williams explained. “But once PSR-allowable expenses are factored in, that figure likely brings the club close to breakeven — if not better.”
Looking ahead to 2024–25, Williams noted that the club’s revenue would have taken a dip without Champions League football, but so too would the expenses — particularly performance-related bonuses. While player sales like those of Yankuba Minteh and Elliot Anderson were recorded in the last financial year, their impact will help balance the books for PSR calculations.
Strip away the impact of player sales, and Newcastle’s operational loss was approximately £69 million last season. Williams expects this trend to continue into the next financial year, forecasting a slightly reduced loss of around £50 million due to improved matchday income and rising commercial revenues. With PSR add-backs, that could fall closer to £40 million, giving the club a solid platform to work from.
Crucially, the £73 million loss posted in 2022–23 will no longer be part of the three-year PSR calculation — effectively opening the door for Newcastle to increase their spending this summer without breaching financial regulations.
£500 Million Spending Capacity — But Caution Remains
On paper, Newcastle could potentially spend up to £500 million this summer and still remain compliant with PSR rules, thanks to the amortisation of player transfers across multi-year contracts. However, Williams cautioned that such a figure, while technically possible, is unrealistic.
“It’s not just about PSR,” he said. “Even if you have the headroom, you still need actual capital — cash — to fund that level of investment. But Newcastle’s owners, backed by Saudi Arabia’s Public Investment Fund, have made it clear they’re willing to support the club aggressively within PSR limits.”
Williams estimated that Newcastle have about £100 million of PSR headroom, which could translate into a £500 million transfer spend if spread over five years. Still, this doesn’t account for wages and other long-term commitments that come with signing new players.
He added: “They’re not going to blow the budget. I think an outlay of £200 million or slightly more is very possible. Newcastle have been smart and strategic with their recruitment. I don’t expect them to change that approach now.”
Indeed, even without Mitchell, the club has already identified priority targets. Talks are ongoing with Callum Wilson regarding a new contract, and several other moves are expected in what could be a transformative few months on Tyneside.
UEFA Regulations Could Complicate Things
Another layer of complexity comes from Newcastle’s new status as a Champions League club, which subjects them to UEFA’s Financial Sustainability Regulations as well as the Premier League’s PSR framework. UEFA’s rules are stricter in some areas — particularly around football earnings and cost control.
Williams warned that Newcastle might find themselves in breach of UEFA’s financial limits, but this wouldn’t necessarily be a major setback.
“It’s likely they’ll go over the threshold, but that just means a fine — and it’s not expected to be significant,” he noted. “Clubs like Chelsea and Aston Villa are already preparing to accept similar penalties. Newcastle could very well do the same.”
Strategic Spending, Not Reckless Splurging
While Newcastle now have greater financial freedom and the backing of powerful owners, there is no expectation that the club will suddenly begin spending wildly. The approach under Eddie Howe and the ownership group has always been measured, with a focus on value and long-term planning.
The record signing of Alexander Isak in 2022 remains their biggest outlay to date, and there’s no indication that they’ll push beyond the £100 million mark on a single player. Instead, fans can expect smart recruitment — bolstered by the ability to spend — but always within a carefully calculated financial plan.
Williams concluded, “Newcastle’s strategy has never been about throwing money around. It’s about building a squad that can sustain success, navigate financial regulations, and compete at the highest level. That’s what this summer will be all about.”