Why Financial Fair Play Rules Are Good For Newcastle

Alan Pardew has talked about the Financial Fair Play Rules which are coming into operation for European clubs gradually over the next few seasons.

Michel Platini has introduced Financial Fair Play Rules

In a nutshell,  clubs will only be allowed to pay out money that they earn from their revenues as a football club.

In other words they will be forced to balance their books so that losses, like for example Manchester City’s loss of £197M in their last financial year, will no longer be tolerated.

Or at least if clubs like Manchester City do continue to overspend, they will not be allowed into European competition.

As a comparison Newcastle made a loss of only £4.5M in their last financial year, and that’s £192.5M less than Manchester City lost.

That’s the net of it, and we have to hope UEFA stands by those rules.

Those rules are set to come fully into vogue in the 2014/205 season, and the good news is that UEFA  said in Switzerland only last week there would be no exceptions.

Clubs will only be able to record a maximum of £45M losses from next year, and Newcastle should almost be making a profit by then.

This is what Alan Pardew said about the new Financial Fair Play Rules:

This rule can only be a good things for us.  For some clubs I am sure it is a problem or a headache.

For the Man Citys and Chelseas, you know it is difficult to balance the books when you are trying to reach the standards of Manchester United.

For us it will level the playing field a little bit. Hopefully, we can capitalise on that.  We like to think going forward we can generate more income on that front through sponsorship.

Other clubs get that advantage because of the success they have had. However, it will stop the complete overspend which really unbalances the field – like Manchester City have done, with all due respect.

It gives us all a chance.

Newcastle financials over the last four financial years have all been losses – but they are coming down rapidly, once we got back into the Premier League in 2010:

And there is a good chance that in the latest financial year Newcastle could even make a profit.

Newcastle are trying to grow their revenues, so they can spend more money in the transfer market, and that will be true for any European club, once the rules come fully into effect.

Of course the bigger clubs will still be able to spend more money than the smaller clubs, because they have bigger revenues, but clubs like Manchester City and other big clubs like Barcelona and Real Madrid will be forced to balance their books.

That’s got to be a good thing for the game, and why it took so long to bring in these kind of rules, we have absolutely no idea, but the financial running of some clubs in England has been a farce over the last several years.

These new rules will definitely favor Newcastle United, because of our good financial state at the moment.

So there’s some good news this Sunday morning – for a change. 😀

Comments welcome.