Since the takeover of NUFC by the richest humans on the face of the earth, you may have heard much about Financial Fair Play (FFP).

The other 19 Premier League clubs certainly have. They’re relying on it. They’re hoping that FFP will deny Newcastle achieving their rightful destiny of domination of the galaxy. Or more realistically send us down to the Championship.

Some neutral observers on Twitter have also stuck their oar in (and helpfully done much of the hard graft on the figures for me!). If you’re not on Twitter then all the figures were, of course, calculated by me for your benefit and with considerable industry from myself. And you can rest assured my analysis is far from neutral.

Ok, so what is FFP?

In the Premier League, spending ability is limited by the Profitability and Sustainability Rules. These allow clubs to make a £5m loss per year, which can be boosted by a £30m equity injection, giving £35m allowable losses per year. Over a 3-year monitoring period, this equates to £105m.


Er, ok, so just tell me how much we can spend in January?

Patience. NUFC made £38m pre-tax profit over three years from 17/18 to 19/20. But FFP kindly allows some costs to be offset which will increase the potential spend. I’ll not bore you with the detail. It’s all in the table below that I, er, drafted earlier.

So, to be clear, NUFC can spend £200m in January?

Well no. Actually, they could in practice, spend a boatload more.

I don’t understand. How?

It’s complicated. It’s down to how player purchases are accounted for. Suppose we did something stupid in January like spending £40m on Joelinton on a 5-year contract taking up a big chunk of the £200m available. We’d only have £160m left to spend on transfers, right? Wrong.

The transfer cost to hit the accounts would actually only be £8m (or £4m if you consider we’re about half way through the NUFC financial year). This is because the transfer fee is expensed over each year of the length of the contract. The table below illustrates.

So how much can we actually spend and still be within the limits?

About £600m. Or 15 Joelintons.

Give over man!

The table below sets it out. The annual cost is how much the purchases will hit the accounts. So, for example, two players bought for £150m each with wages would add an estimated £91m annual cost to the accounts. Well below the £200m NUFC has to play with.

So could NUFC spend £600m every season?

No. Their full 3-year permitted loss would be taken up in one year. To maintain that level of spending, they would have to financially break-even over the next two years. To do that, they’re going to have to massively increase their income. The PL are rushing through rules to prevent them from doing this.

A rule change aimed specifically at NUFC? Seems a bit harsh. What are they proposing to do?

Clubs that are taken over by rich owners, generally quickly increase their commercial income through dubious sponsorship deals with companies connected to the new owner. The PL have already temporarily banned, for a month, commercial arrangements that involve pre-existing business relationships.

Can they do this?

Aye. They can do what they like subject to a vote. Out of 20 clubs, 18 voted for the temporary change, one voted against (NUFC) and one abstained (man City). I’ve always liked City! The rule will be in force for the next month – and it will apply to all 20 clubs – but many of them want it, or something similar, to become a permanent feature.

So have other clubs not been doing this for years to circumvent FFP?

Of course, loads do. Man City are the obvious example but let’s take a look at a lesser known case – Everton. They were taken over by Farhad Moshiri in September 2018 leading to a transfer splurge and £252m losses over the next two years.

To reduce these losses, they desperately needed to increase their income. They plan to move into a new ground shortly which will increase their Match Day income but in the meantime, they’ve more than doubled their commercial income.

How have they done that? By doing exactly what the PL are trying to prevent NUFC from doing. USM, owned by Moshiri associate, Alishar Usmanov, sponsors Everton’s training ground for £12m and paid £30m for the option to buy naming rights for the new stadium. Just to be clear. This isn’t buying the naming rights. It’s the option to have first refusal for buying the naming rights!! Laughable? Of course. But perfectly acceptable for Everton and the Premier League.



So the PL are ok with an owner connected company (Sports Direct) not paying a penny to NUFC for their advertising but are apoplectic with the suggestion that a new owner might invest a shedload into one of their members?

Aye, that’s about the size of it.

 Is there anything NUFC can do?

NUFC have made it clear that they believe this measure is anti-competitive and unlawful. If the Premier League seek to make the measure permanent, they can seek an injunction to block it. NUFC will no doubt highlight that a number of European clubs have sponsorship deals with owner involved companies for huge amounts.

So after we’ve bought Messi & co in January, would there be enough left over to give the ground a new coat of paint?

In theory, the club can spend anything it likes on infrastructure as none of those costs are counted in the FFP calculation. So, not only could they give the ground a new coat of paint, they could extend or build a new stadium. They might even be able to buy some new ice baths for the training ground.

This is likely to be the area where heavy investment will be made without falling foul of any Premier League rules. Abu Dhabi have made a huge investment in the infrastructure of Manchester City which has been of great benefit to the local community.

The club’s ‘City in the Community’ programme has seen thousands of hours invested in worthy causes including disability football teams and mental health support for vulnerable youngsters. There is the £200m City Football Academy covering 80 acres beside the Etihad. The vast complex includes 16 outdoor pitches, the 7,000 capacity stadium used by City’s Elite Development Squad and Women sides, residential and classroom space for youth players and 2,000 mature trees.

And when all the dust has settled on this takeover and the other Premier League clubs have stopped stamping their feet, this will be the legacy. A city starved of investment for so long, one of the poorest in the UK, will be immeasurably better off.