As with so many things at Newcastle United these days, it all comes back to three dreaded letters.
Before it was PSR – profitability and sustainability rules – that forced the club to sell now £100m-rated midfielder Elliot Anderson and restricted their ability to flex financial muscles.
Now it is SCR, squad cost ratio, the new version of the rules that will restrict Newcastle’s spending to 85 per cent (or 70 per cent if you’re in Europe) of what they bring in.
As they announced a 5 per cent price hike in season tickets (or 15 per cent for premium areas), the Magpies made no bones about it: the rules are the reason.
“In the current financial landscape, we must balance affordability for our fans with the need to generate the revenue required to remain competitive,” CEO David Hopkinson said on Friday.
With matchday revenue currently among the lowest 25 per cent in the league his point is loud and clear – price rises are a necessary evil. At 5 per cent it’s noticeable that the price rises mirror those announced by Manchester United.
But does that logic actually stack up?
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Football finance experts estimate the price rise will rake in an extra £2m a year for the club. For the sake of the financial rules that’s £10m towards signing a player on a five-year contract. It’s covering £40,000-a-week of a new signing’s wages. Newcastle spent more than £250m last summer.
For perspective, the difference between finishing 10th and 11th this season is roughly £2m. Under the lucrative terms of the TV deal being on Sky Sports or TNT Sports twice earns you around £1.5m. The big wins – in terms of revenue – feels as if they are elsewhere.
And that’s what the club are mostly under fire for on Friday. Fans are absorbing a fourth successive price rise at a time when the club don’t seem to be sweating the asset quite as much as they should.
Progress on solving the stadium issue has been glacial – although sources suggest conversations have ramped up again recently – and big-ticket sponsorship deals remain elusive.
The absence of a training ground or training kit partner remains mystifying, and PIF don’t appear to be giving Newcastle quite the commercial leg up that they need.
All of this predates Hopkinson’s arrival and insiders suggest there’s been new energy around these issues in recent months. He has been true to his word about transparency and it was notable that his name was attached to Newcastle’s release while Manchester United’s was anonymous. Hopkinson is owning this, at least.
But he will also know patience on Tyneside is straining after a difficult year on the pitch and four years without a big infrastructure project as proof of ambition. It is time to take the wrapping off the training ground – and deliver in the transfer market.
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The worry is always the deeper impact of these creeping price rises. It may only be £3.92 a month for now but in a cost of living crisis an above inflation rise has an impact. Some will be feeling the pinch.
The reduction of the disability discount from 50 per cent to 25 per cent is especially puzzling. Ultimately that can’t be worth more than tens of thousands to the club. It just feels cynical.
The club’s Fan Advisory Board said they were “disappointed” with the rise. Football finance expert Kieran Maguire said he felt the PSR excuse was a bit “disingenuous”. It certainly testing the faith of the club’s greatest asset.
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