Newcastle's financial situation examined with SCR rules coming in, Sandro Tonali being sold and the gap they must bridge to the 'big six'
Newcastle United confirmed the sale of Sandro Tonali to Tottenham Hotspur in a deal that could be worth up to £100million.
It was a deal which Newcastle could not turn down but it caused a bit of frustration among supporters that one of their best talents joined a side who had finished fourth bottom of the Premier League in each of the last two seasons.
Ever since the Magpies have been taken over by the Saudi Public Investment Fund in late 2021, they have faced obstacles on their ambition to try and disrupt the 'big six' clubs.
On the pitch, they have managed to compete, winning the Carabao Cup in 2025 having reached the final in 2023 as well, and twice qualifying for the Champions League in 2023 and 2025.
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But they have faced financial restrictions along the way, not being able to spend the vast amounts of money their owners possess amid spending rules in the guise of FFP, PSR and now SCR (squad cost ratio).
As a result, Newcastle have had to improve off the pitch and increase their commercial earning potential. But the gap between themselves and the big six clubs remains a chasm and there are big decisions to be taken - particularly when it comes to whether they stay or go from St James' Park - that will have a big say over how quickly they can bridge that gap to stop losing their best players and allowing them to compete at the top of the English game.
With that in mind, Chronicle Live spoke to football finance expert Kieran Maguire to get a handle on the big financial issues facing the club at present.
How SCR cycle will affect Newcastle
SCR rules are now in play in the Premier League after a vote passed the 14-club threshold to replace the PSR model with new spending rules.
Squad Cost Ratio is a financial regulation that limits Premier League clubs’ on-pitch spending to 85% of their football-related revenue and net profit/loss from player sales. However, teams who have qualified for European football can only spend 70% and Newcastle are expected to follow that path after entering into a settlement agreement with UEFA following a breach of its Financial Sustainability Regulations.
The SCR regulations came into effect on July 1. While PSR evaluated a club’s overall profit by including all revenues and costs, SCR measures on-pitch spending which encompasses both the income that clubs generate themselves and the revenues distributed by the League and other football competitions.
Under PSR, clubs are assessed based on their financial performance over a rolling three-year period, whereas the SCR sets clear spending limits for each season.
And that is why Newcastle selling Anthony Gordon before SCR was implemented will be measured differently to Tonali's sale to Spurs.
"If you sign a player in June 2026, if the player's on a five-year contract and you sign them for £60million, that's 60 months so it works out as £1m a month in amortisation," Maguire explained.
"So that really shouldn't be an issue preventing Newcastle United from recruiting players because I assume that they can afford £1m in the overall calculations.
"When it comes to player sales, all of the player sales are taken in the year in which the transaction takes place, so that would have been beneficial when it came to Anthony Gordon, but when we move to the SCR environment, which kicks in from the July 1, player sale profits will be spread over three years.
"So a sale which takes place this month, let's say that Newcastle make a profit of £30m, only £10m of that would go into the 2026-27 calculations."
So if Tonali's sale is recorded at £100m after Newcastle bought him for £55m three years ago on an initial five-year contract, meaning the amortised fee now stands roughly at £22m, the Magpies theoretically will make a profit of £78million.
But spread across three years that means only £26m will go towards this season's SCR accounts whereas Gordon's sale fell in the PSR cycle so the full profit from his move to Barcelona would have went towards those accounts.
£200m gap Newcastle must bridge
Tonali's deal highlighted just how far Newcastle still have to go to compete with Spurs, who can offset their poor performances on the pitch with excellent finances on it.
"Spurs are very good at what they do," Maguire told Chronicle Live. "And what they are very good at doing is being an entertainment complex. That's how I'd describe them. Whereas Newcastle United is a football club.
"Tottenham made, on average, £83 per fan per seat and that compares to Newcastle at £49 according to the 2024/25 figures. Spurs also have 30 non-football events a year at full capacity.
"As a result of that, their commercial income has gone through the roof. They made £277million from commercial income. That compares to £123million Newcastle netted. So there's £140 million [gap]. You've got £70million more in matchday income. You put those two together, and that's £200million.
"As far as the broadcast income is concerned, it's £3million a place. So they finished 17th, Newcastle finished 12th. So Newcastle got an extra £15million in TV money. But offset against that, Spurs are getting £200million more in commercial and matchday and that's why they're in a position to be able to effectively cherry-pick.
"They're also very good at not paying wages. In the sense that their wages are 45% of revenue. Newcastle's was 73%. So if they have to pay more money on wages, they've got the scope to make a blockbuster offer to a player without having any fears of breaching PSR or SCR, whereas Newcastle have to walk the tightrope."
Stadium decision holds the key
Spurs' stadium has been the key cornerstone to their financial success and it leaves Newcastle with a big decision to make over St James' Park.
Magpies chiefs are yet to decide whether to extend St James' Park or to move to a new site and build a multi-purpose state of the art new venue.
But while the commercial gap continues to be as stark as it is, it may be that a new stadium is the only way for Newcastle to break the glass ceiling and be able to compete financially with the big six clubs to sign top players and consistently qualify for the Champions League.
"Blame Beyonce and Coldplay," Maguire joked. "Blame NFL, Anthony Joshua. That's the reason why (Spurs can spend over £200million already this summer despite narrowly avoiding relegation last season).
"Newcastle United, are £100million behind Arsenal, they're £100million behind Manchester United, they're £70million behind Spurs, they're £60million behind Liverpool, when it comes to ticket sales.
"So, St James' Park, again, as an away fan, everybody loves a trip to Newcastle. It's in the centre of town, everybody's so friendly, it's a proper footballing city. All of these positives don't turn into cash for the club."
In the meantime, Newcastle will have to box clever in the transfer market and try to sign high potential players, much akin to the model adapted by Brentford, Bournemouth and Brighton but on a slightly bigger scale.
Newcastle fans will hope to see evidence of it working this summer to transform their fortunes on the pitch but the plan jars in the face of promises of the club becoming 'number one' and among the biggest teams in the world by 2030.
"If you can't be bigger, you've got to be smarter," Maguire finished. "And the trouble with that is the fans of Bournemouth, Brighton and Brentford, they've been conditioned by the club to be patient.
"The fans have bought into that because they know that their rightful place is in the Championship. Whereas we all know that Newcastle's rightful place is in the Premier League. So, it's a different set of expectations you get from what we could perhaps call the teacher's pets.
"But the fans have a different mentality. I think with the takeover, the way that it was sold at the time, it created an expectation that we could now match, stride by stride, those clubs. But those clubs brought in Financial Fair Play, which morphed into PSR, which morphed into SCR for a reason. And that reason was to create a closed shop."