Newcastle · Financial analysis

Newcastle's squad cost ratio: the squad costs more than the rule counts, and selling closes the gap

Newcastle's squad cost ratio for the 1 March 2027 test comes out at 81.7%, 3.3 percentage points below the 85% green threshold, in an assumption range of 76.4% to 85.5% whose top end is just above the line. Squad cost is £14.4m less than 85% of the revenue the rule counts. Measured before profit on player sales it is 108.8%, so the squad costs more than the football revenue the rule counts. A three-year average of £109.9m of sale profit closes the gap, dominated by four sales across two years, Isak, Gordon, Tonali and Guimarães for about £353m, with Anderson's and Minteh's sales of June 2024 and £19.9m of filed profit from 2024/25. The same two summers bought £506m of replacements, so the cost base did not fall. Reconstructed from Newcastle United Football Company Ltd and the filed group and subsidiary accounts used for the reporting perimeter, and Appendix 2 of the Premier League Handbook.

By Arthur van de Laak13 September 2026Updated 1 November 2026 · View updates38 min read

Figures as of 31 October 2026, Orange Engine release V2CI · Latest figures · What the engine does not capture

Newcastle sold Isak, Gordon, Tonali and Guimarães across two years for about £353m. In the same two summers they bought £506m of replacements.

The squad costs £361.6m against £332.5m of the football revenue the rule counts, which is 108.8% before any player trading: about 8% more than the revenue itself. The three-year average of profit on player sales, £109.9m a year, is what takes the figure to 81.7%. Merit above the fifteenth-place floor is worth £26.3m, and there is no European money this season, so almost all of the distance between those two figures is selling.

• The squad cost is £361.6m: £177.3m of wages, £172.0m of amortisation, about £13.7m of agents’ fees and about £2.2m for the fee paid for the head coach, less a £3.5m loan fee received.
• Amortisation rose from about £100m to £172m in two years, because the 2025 and 2026 windows added £506m of registrations.
• A £65m striker is on loan at Juventus and reaches the ratio in three directions at once. Nick Woltemade keeps amortising at Newcastle, Juventus pay his wages, and the loan fee offsets against his own amortisation.
• The club publishes a forward amortisation schedule, which anchors the amortisation directly to the filing rather than to an estimated remaining life.
• A £116.6m gain booked three days before the 2025 year end, on a sale inside the owner’s own group, is not counted here.

Taken together, the twenty clubs of this season’s Premier League come to 75.3% on the same basis; Newcastle’s 81.7% is above that. The full table for every club in the series is at Premier League SCR 2026/27.

What the accounts say

Newcastle United Football Company Ltd files to 30 June. For the year to 30 June 2025, turnover was £323.1m, against £140.2m in the last season before the takeover.

The wage line was £211.3m, and with £30.0m of social security and pension costs the staff bill was £241.3m, across 569 employees split 291 football and 278 business. Amortisation of registrations was £99.8m and profit on player sales was £19.9m.

The profit before tax of £18.7m rests on a transaction inside the owner’s own group, described below, without which the year would have been a loss of roughly £98m.

The transfer book is modest for a club spending at this scale: £91.3m owed to other clubs against £39.5m owed to Newcastle, with £6.0m of discount unwinding through the interest line.

Rebuilding the ratio, before any selling

Wages, about £177m. The rule counts contract players and the head coach. The filed staff cost is £241.3m, and the accounts group 291 players, coaches and football staff in a single category, so the player share cannot be observed directly. This reconstruction currently uses 73 to 78% of the staff cost, rolled through the windows that have closed since the accounts date. The filed category is too broad for the residual headcount test used at clubs where players are isolated, so that check cannot validate the range. The largest source of modelled variance is now last season’s commercial and gate revenue, which are not yet filed; the wage share is the next.

The roll-forward is a net reduction here, which is unusual in this series. The summer departures removed about £34m of wages against about £24m added by arrivals, Lascelles’s January exit removed a further £2.4m to £2.8m for the whole season, and Juventus’s cover of Woltemade’s salary removes about £7.8m more. That is a full-year rate: his loan began on 31 August, so on a day basis it would be about £6.5m and the ratio about 82.0%.

Amortisation, £172.0m. Newcastle publish a forward amortisation schedule, which anchors this part of the reconstruction directly to the filing. The registrations note gives the existing squad’s charge for each of the next five years, including £85.2m for 2026/27. From that filed figure the reconstruction removes the players who have left since it was published, Isak, Gordon, Tonali and Guimarães, and adds the 2025 and 2026 cohorts on their contract terms, each measured from the day the player was registered to the day the contract ends. Each of those signings is costed at the reported fee plus 12%, because the rule counts the League’s transfer levy, agents’ fees and the other costs of a transfer as part of what a registration costs.

Neither cohort is simply a fifth of what it cost. Woltemade’s six-year deal produces a £14.6m annual charge for the ratio because the five-year cap applies to it, while the club’s accounting policy spreads a registration over the full contract. Wissa’s £50m is spread over a contract that runs from September 2025 to June 2029, 3.83 years, and charges £14.6m. The academy arrivals run over a little under three years. For an affected registration, a term longer than five years is treated as five for the numerator, while shorter contracts retain their actual term.

The cap does not reach every registration. It applies to contracts executed, or on this model’s reading extended, on or after 12 December 2023. A contract executed before that date may be amortised over its full initial term under the guidance to the rule, which is why the eight-year contracts of earlier seasons still do what they were written to do. Newcastle’s recent spending falls almost entirely after the cut-off.

Agents’ fees, about £13.7m, expensed. The FA publishes £20.2m paid in the year to February 2026, part of which is capitalised into transfer costs rather than expensed.

The head coach’s fee, about £2.2m. Newcastle are reported to have paid Al-Ahli €11m, about £9.4m, for Matthias Jaissle on a four-year contract. The rule spreads a head coach’s fee over his contract (Rule A.1.22(d)), and this is the part falling in the season from his arrival.

A £3.5m loan fee, deducted. Rule A.1.29(g) applies amounts received on a temporary transfer against that player’s remuneration, then his amortisation, then his agents’ fee, player by player. Woltemade’s loan fee lands entirely on his own amortisation and nothing reaches the sale-profit pool.

Revenue the rule counts, £332.5m.

The rows are rounded separately; the total is taken from the unrounded figures. Two of those rows deserve reading twice. The merit payment is taken at the best of last season’s finish, the three-year mean and the fifteenth-place floor. Newcastle finished twelfth in 2025/26 after seventh and fifth, a three-year mean of eighth, so the rule pays them as an eighth-placed club. Their actual finish would have paid about £15m less.

And European prize money counts only for a competition the club is in this season. Newcastle are not, so the Champions League income of 2025/26 is excluded. Last season’s commercial revenue is still counted in full, less the cost of merchandise. The commercial estimate contains no specific allowance for this European campaign. The gate is different: the rule takes last season’s receipts per home match, across all 31 home matches including six in the Champions League, and counts 24 of them this season, 19 in the league and a three-season average of five home cup ties.

Merchandise counts at gross profit, sales less the cost of the goods. Newcastle took their shops in-house in May 2024. The filing indicates retail costs rose materially, but does not disclose the absolute amount. We therefore use the league-wide merchandise method; the true figure could be higher. Last season’s commercial revenue is estimated at £121.3m: the £108.4m filed for 2024/25, grown by 11.9%, the rate one published method gives a commercial income of that size (how we estimate last season’s commercial revenue). The women’s team’s revenue, £1.0m, and the operating profit of the St James’ STACK fan zone, £2.8m, both from the group’s 2024/25 accounts, are added to that, which gives £125.0m on the unrounded figures. £8.3m is taken off for merchandise, which leaves £116.7m. How the fan zone is counted rests on a reading of the rule, set out in the note of 5 October below.

The squad therefore costs £361.6m against £332.5m, which is 108.8% before any player trading.

How much of the revenue rests on the rule’s own bases

At Newcastle the comparison is worth £26.3m, all of it merit above the fifteenth-place floor, because there is no European football this season. Measured at the floor, the same cost base would produce 118.1% instead of 108.8%, which is 9.3 points.

At Arsenal the same comparison is £220.3m, which also includes the European distribution and European home gate.

What player trading does to it

The rule adds the profit or loss on sales in the six most recent transfer windows and divides it by three (Rules A.1.13 and A.1.53). For the March 2027 test that period starts on 2 February 2024, five months before Newcastle’s 2024/25 year, and two of Newcastle’s largest academy and recruitment sales fall in those months.

The period runs from February 2024 to the close of the January 2027 window, which spans parts of four financial years; the rule still divides the total by three.

£361.6m divided by £332.5m plus £109.9m gives 81.7%.

Profit is the fee less what remains on the books, less 5% of that gain for the direct costs of the sale, and any share owed to a former club. What remains on the books is counted as the rule counts cost, the reported fee plus 12%. That is why £353m of sales produces about £242m of profit rather than £353m.

Isak cost £55m in 2022, the €65m base fee, on a six-year deal, and three years of it had been charged before he left, so with the 12% about £30m remained on the books. Real Sociedad kept a right to 10% of the gain on any future sale, and the gain in that clause is measured against what Newcastle paid rather than against the book value: 10% of £125m less £55m, or £7.0m. Guimarães cost £35m and signed an extension in October 2023 that re-spread his remaining cost, so about £10m remained when he left. Lyon are owed 20% of Newcastle’s profit on him, reported at about €7.5m, or £6.4m, so his £75m sale produces £55.6m of profit.

The same two summers bought £506m of registrations, £239.4m in 2025 and £266.5m in 2026. The selling did not reduce the cost base. It replaced it, and the replacements carry amortisation over several seasons, with post-cut-off terms longer than five years capped at five for the Premier League calculation, while sale profit remains in the average for six transfer windows, about three years.

Gordon’s profit sits in 2025/26 rather than 2026/27 because his transfer completed on 29 May, before the year end; 1 July was only the date La Liga’s window opened to register him. That does not change the ratio, since the rule aggregates the six most recent completed windows either way, and by window his profit leaves the average at the same test as Tonali’s and Guimarães’s.

Nor does it matter when Barcelona actually pay. Their own 2025/26 financial report, as reported in Spain, shows that an instalment of about €22.3m due on 31 July 2026 has been deferred by a year to June 2027, against a total of roughly €69.8m owed for Gordon. That is press reporting of another club’s disclosure rather than a document read here, and it is flagged as such. The principle does not depend on the figures: the profit belongs to the date the registration transferred, so a payment moving does not move the ratio. What changes is cash, and the discount on a receivable carried at present value, which unwinds through the interest line in later years. Newcastle already show £6.0m of such unwinding.

The loan that reporting linked to compliance

On deadline day 2026, Newcastle loaned Nick Woltemade to Juventus, twelve months after buying him from Stuttgart for a club record.

Three things reach the ratio and they do not all point the same way.

He keeps amortising at £14.6m a year, because a loan does not move the registration and does not stop the charge. Newcastle bear the cost of owning him whether he plays in Turin or Tyneside.

Juventus’s wage cover removes about £7.8m from the wage line at a full-year rate. That is the largest of the three effects, and the one a reconstruction is most likely to miss, because it appears as an absence rather than as a transaction.

The £3.5m fee offsets against his own amortisation and reaches nothing else.

The reporting was explicit about why the deal happened, describing the freeing of his wages and the fee as “vital in striking the Fernandez-Pardo deal while keeping the club compliant” with the League’s rules and a UEFA settlement. The same report noted that both clubs were operating under separate settlements, and that the fee Juventus received for another player was nominally larger than what they paid for Woltemade.

None of that is improper and none of it is hidden. It is what happens when a rule measures squad cost rather than squad quality: a £65m striker who has become fifth choice is worth more to the ratio in Turin than at St James’ Park.

The rule tests the club Newcastle were, not the club they are now

The merit payment is the clearest case. The rule pays at the best of last season’s finish, the three-year mean and the fifteenth-place floor, so Newcastle are paid as an eighth-placed club on a three-year mean while their actual 2025/26 finish was twelfth. That basis is worth about £15m more than their actual finish would have paid.

The same backward anchoring runs through the rest of the denominator. Commercial income is taken from 2025/26, a Champions League season, and so is the average gate per home match, while the European prize money from that campaign is excluded because the club is not in Europe now. A European campaign can genuinely lift a club’s commercial income. The commercial estimate contains no specific allowance for this European campaign. On the gate, a club whose form has just dipped is tested on receipts built from a better recent past.

The filed years, and this one

For context, the same squad-cost components are reconstructed across the filed years using reported turnover. The 2026/27 row changes revenue basis to the amount Appendix 2 counts. The 2025/26 accounts are not published until about March 2027, so that year is absent and will be the first out-of-sample test of this reconstruction.

How the filed years are built. Revenue and amortisation are read from each year’s filed accounts. Squad wages are 73 to 78% of each year’s filed staff cost, the same share used for 2026/27, and each year’s agents’ fees are the FA’s published figure for the reporting period that overlaps most of Newcastle’s financial year. The SCR column adds the three-year average of sale profit, as the rule does; for 2020/21, an 11-month year, that average would need 2018/19 sale profit, which is not held here, so only the figure before player trading is shown.

The last row changes basis and the heading says so. The filed years show turnover as the accounts report it. The 2026/27 row shows the revenue the rule constructs, which pays merit at the three-year mean, excludes European income the club is not earning, and includes commercial and gate figures that are themselves estimated.

From the takeover year revenue grew faster than cost, and the figure before trading fell from about 103% to about 87% by 2023/24 on Champions League income. Commercial income then rose from £80m to £108m in 2024/25, but costs rose faster and the figure returned to about 92%. Then two windows of £506m took amortisation from £100m to £172m, and the figure before trading passed 100%, to 108.8%.

The final week of the old rules

On 27 June 2025, three days before the year end and in the last season governed by the profitability rules, the club sold two things to a company incorporated that month: its subsidiary Newcastle United Projects Ltd, and the St James’ Park leasehold improvements on a 72-year underlease. The buyer was a new subsidiary of the intermediate parent.

• The club company booked £116.6m of profit on the improvements against a book value of £43.2m, and £2.8m on the subsidiary.
• The consolidated group books more on the same transaction, £129.0m and £4.2m, on a premium of £172.1m accounted for as a sale and leaseback. The two entities differ by about £12m on the same asset and the filings do not explain why. The club-company figure is the one a club-level reconstruction uses.
• The price is not final. The group’s accounts say the valuations behind it are subject to Premier League approval, and that the consideration can be adjusted if the League’s fair market value differs.
• No cash came from outside the group. Amounts owed to the club by group companies rose from £19.1m to £176.7m in the same year.
• We count none of it. Commercial revenue under the rule leaves out profit on the disposal of investments and revenue from exceptional events (Rule A.1.19(e) and (f)), and we read this sale as falling there. The rule leaves that judgement to the Board.

It is the second such transaction this series has found in the final week of a 2024/25 financial year, alongside Everton’s, and here the booked profit was more than twice as large.

How the owners fund it

• No shareholder loans sit on the club’s balance sheet. The owner funds through equity: £50m in 2024/25, £97m the year before, £106.5m in September 2025 and £45m in December.
• The December money is traceable in the parent’s accounts as three interest-free loans totalling £45m, described as being for investment in further share capital. The owners lend to the holding company, and the holding company pays the club in shares. That distinction matters to the sustainability rules, which treat a shareholder loan as a liability and an equity subscription as not one.
• The club has £50m of term debt and a £50m revolving facility with HSBC and First Abu Dhabi Bank to July 2028, priced at SONIA plus 2.15% and 2.1%, secured on Premier League central funds and ticket revenue.

What this doesn’t say

• That Newcastle’s ratio is exactly 81.7%. The published range is 76.4 to 85.5%, and its top end is just above the 85% line, conditional on the current 73 to 78% player-share assumption, on 2025/26 commercial and gate figures that are not yet filed, on estimates of the cost of merchandise and of what a registration costs beyond its fee, and on how the rule is read for the fan zone’s income. The filed headcount cross-check cannot validate the player-share range, because the filed employment category groups players with coaches and football staff.
• That Newcastle are safely inside the line. The assumption range reaches just above it, to 85.5%; it depends on the input bounds used here, and it excludes the possibility that the reconstruction is wrong in a way those ranges do not describe. The stress case, the worst case on costs alone, with every uncertain cost input set against the club at once and revenue held at the central estimate, is 86.1%, above the line.
• That the book values are as well founded as the amortisation. The forward schedule is filed and the departed players’ book values are reconstructed, and Newcastle’s accounts contain no post-year-end disposal-profit figure to check them against, as Fulham’s do.
• That this article establishes a liquidity problem. The owners have continued to inject equity, the bank facilities remain in place, and the unfiled 2025/26 accounts will include a Champions League season. Those facts sit outside the squad cost calculation and do not by themselves establish financial strain.
• Anything about the sustainability rules, which are a separate test with separate consequences.

Newcastle’s squad costs more than the rule says their football is worth. The difference between 108.8% and 81.7% is the three-year average of player-sale profit, dominated by Isak, Gordon, Tonali and Guimarães, and that average turns over window by window.