Kieran Maguire rubbishes PIF 'myth' as Newcastle United owners sanction £1bn investment

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There have been some dizzying high points in PIF’s premiership of Newcastle United, but the owners have arguably not made the progress they would have liked to by this stage.

Eddie Howe led the Magpies into the Champions League in PIF’s first full season after being handed the keys to St. James’ Park.

Newcastle have won their last three matches by an aggregate score of 11-1, taking them to 8th place in the Premier League table meanwhile.

However, there have been moments this term where questions have been asked – albeit tentatively – about Howe’s future as manager.

While the Saudi Public Investment Fund (PIF) have doubtless been frustrated by Profit and Sustainability Rules (PSR), they have still spent far more significantly than any other owner in Newcastle history.

Wages are well up and veritable superstars like Bruno Guimaraes and Alexander Isak can stake a claim to be among the best players in their positions in the Premier League.

So, the bar has been raised significantly by PIF during their time on Tyneside, especially given that the owners have committed to spending the very maximum allowed under PSR.

But the club’s bean counters are in a constant balancing act, trying to weigh the risks of breaching Premier League spending rules with their yearning for success on the pitch in the short term.

The club is desperately trying to raise revenues to give them more breathing space, with commercial and matchday income two key focus areas.

Player trading must come into the equation more for Newcastle too, with the club having placed far greater emphasis in the PIF era so far on the in door rather than the out door.

There has been some positive news on that front, which should give Howe and Paul Mitchell more room for room for manoeuvre in the January transfer window and beyond.

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Player sales the big factor for £286m PSR boost, says finance expert

In the last two recorded financial years, 2021-22 and 2022-23, Newcastle have recorded losses of over £140m.

However, according to analysts Off The Pitch, Newcastle will post a profit when they release their 2023-24 accounts, plus record revenues of £286m.

Speaking exclusively to TBR Football, Liverpool University football finance lecturer Kieran Maguire explained how they might have got to that juncture.

“To go from an accounting loss of £73m, which they have generated in the two most recent seasons, is challenging.

“The only way they were going to get there is through player sales. The Anderson and Minteh sales generated somewhere in the region of £60m.

“Income going from £250m to £286m when I’d expect the wage bill to have gone up as well because they paid Champions League bonuses will have to be factored in.

“Getting to a break-even point is certainly possible but it will be driven by player sales more than anything else.”

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Kieran Maguire: PIF are as committed as ever to Newcastle

A few months back, a worrying narrative worked its way into the media.

When PIF announced that they were cutting foreign investment, many fans feared that the sovereign wealth fund would be reducing the finance they funnel to Newcastle.

However, Newcastle and PIF governor Yasir Al-Rumayyan has said that, while the percentage amount of foreign investment is indeed being slashed, the actual amount will remain broadly the same.

And last week it emerged that PIF are ready to spend £1bn on a significant minority stake in Newcastle Airport.

That is not the behaviour of an owner that is losing interest in its flagship football project, which they said would be accompanied by broader investment in the city, suggests Maguire.

“I think it was a myth that they had lost interest in the project,” the Price of Football author said.

“If you have a wealth fund that has hundreds of billions of assets, £300m for Newcastle does not move the dial at all. It’s the equivalent of what I spend on milk per week.

“As far as the financial investment is concerned, £1bn isn’t a lot of money to PIF.

“What they were keen to do is communicate to interested parties is that they were not going to have their trousers taken down or that there is a Newcastle tax.

“Compared to their historic position, they have far more money to spend. The only restriction is their PSR position.”