Premier League’s new Psr proposals could still leave Newcastle with £280m financial disadvantage
The Premier League’s Profit and Sustainability Rules (PSR) remain one of the most hotly debated regulations in English football, dividing opinion among clubs, managers, and financial experts. Originally introduced in the 2015/16 season, the rules were designed to curb excessive overspending, encouraging long-term stability while allowing clubs to record losses of up to £105 million across a three-year cycle.
While the principle behind the rules is to protect the financial health of the competition, they have increasingly become a source of frustration, especially for ambitious sides looking to challenge the traditional elite. Newcastle United are among the most outspoken critics of the current framework, arguing that it prevents them from fully investing in their squad and makes it harder to hold on to emerging stars.
That tension came to a head in the summer of 2024, when Newcastle were forced into difficult transfer decisions to avoid breaching the thresholds. Highly rated academy graduate Elliot Anderson was sold to Nottingham Forest, while promising winger Yankuba Minteh moved to Brighton. Both deals generated much-needed revenue, but the sales were made reluctantly, leaving head coach Eddie Howe disappointed to see valuable assets depart.
Premier League CEO Richard Masters acknowledged earlier this week that a review is underway, hinting that a final decision on whether to replace the current model with an “alternative system” could arrive as early as November 2025. The debate is ongoing, and clubs are waiting to see which direction the league will take.
Asked on Friday whether he would support changes to the PSR structure, Howe was cautious.
> “It depends on what you are voting in,” he said. “I would need to see the two arguments before saying whether I would prefer one or the other.”
—
What Could Replace the Current Rules?
One of the main proposals being discussed is a mechanism known as “top-to-bottom anchoring.” Under this model, the amount a club can spend would be capped as a multiple of the income earned by the Premier League’s lowest-finishing team in terms of television revenue.
Football finance expert Kieran Maguire explained the concept in detail to the Chronicle Live.
> “The way that works is you take a look at the TV revenue earned by the club that finishes bottom of the league. You then multiply that figure by a set number—currently suggested to be five. Last season, the side finishing bottom earned around £110m in TV income. Multiply that by five, and you get £550m. That would become the spending limit for every Premier League club.”
For Newcastle, this would represent a significant boost. Unlike the current rules, which restrict investment to losses, the anchoring model would in theory create a level playing field by giving every club the same maximum budget ceiling, regardless of individual revenue streams.
—
The UEFA Complication
However, Maguire also highlighted that the situation is more complex because of UEFA’s own financial regulations. European governing body rules require clubs in its competitions to follow the squad cost ratio, which ties spending directly to a club’s revenue.
Under these guidelines:
UEFA clubs (Champions League, Europa League, Conference League participants) can spend 70% of their income on squad-related costs (wages, transfers, amortisation, agents’ fees).
Non-UEFA clubs in domestic competition are allowed a slightly higher ratio of 85%.
This means that while “anchoring” could open the door for Newcastle to compete more aggressively, the squad cost ratio could still hold them back compared to giants like Manchester City, Liverpool, and Manchester United.
Maguire illustrated the gap:
Newcastle generate around £300m annually, so 70% of that gives them a spending cap of £210m.
Manchester City, meanwhile, bring in closer to £700m, giving them a far larger cap of £490m.
In short, despite anchoring’s promise, the wealthiest clubs would continue to enjoy a substantial advantage under UEFA’s system.
—
A Step Forward, A Step Back
Maguire summarised the dilemma neatly:
> “Anchoring would be good for Newcastle, but the squad cost rules are not necessarily good. In an ideal world, if owners’ financial backing was added to commercial and ticketing revenues, Newcastle and other ambitious clubs could operate on a more competitive basis. But at the moment, it feels like one step forward, then one step back.”
This paradox does not just apply to Newcastle. Clubs like Aston Villa, Nottingham Forest, and Everton also find themselves in a similar bind. They are eager to push into the upper echelons of the Premier League, but the current restrictions make sustained growth far more difficult.
For now, the league remains in discussion mode. With a vote on reforms looming in the coming months, the question is whether the Premier League will stick with a system that protects the financial order, or whether it will allow ambitious challengers a greater chance to compete.
One thing is clear: whatever happens next will have far-reaching consequences, not just for Newcastle United, but for the competitive balance of English football as a whole.