The Saudi Arabia-led takeover of Newcastle could lead to a “revitalized version” of the European Super League in the near future, according to a financial analyst.
A consortium led by the Middle Eastern country’s Public Investment Fund (PIF) bought the club last week in a £ 300m deal after the Premier League was finally approved.
The Magpies’ newly discovered financial strength is likely to pose a threat to the league’s established “Big Six”, all of whom were involved in the highly controversial Super League plans revealed in April that quickly collapsed.
Roger Bell, the co-founder of financial strategy analyst Vysyble, fears the same clubs may try to trade again before Newcastle can catch up.
“The financial conditions that led to the Super League haven’t changed,” he said. “Clubs are still suffering tremendous losses and struggling to control the balance between income and expenditure.
“The arrival of a new and apparently wealthy regime in Newcastle will only sharpen the focus in those clubs that are closely linked to the Super League concept. It could actually lead to a revitalized version in the near future, before Newcastle had a chance to revitalize itself. “
Vysybel’s new report: “We’re so rich it’s incredible! The Illusion of Wealth Within Football examines the finances of Premier League and Championship clubs between 2009 and 2020.
It found that the 44 clubs posted a record annual loss of £ 1.89 billion in the 2019-20 season, with 73 percent of those losses coming from top clubs.
The clubs that still support the concept of the Super League – Real Madrid, Barcelona and Juventus – say the current financial model of football is broken.
It is assumed that plans for a new Super League are being worked on, but with open qualification and not with protected founding clubs.
The original league was announced in the late evening of April 18, but within 72 hours nine of the 12 clubs had withdrawn due to fan protests, outrage from the game’s governing bodies and government pressure.
The six Premier League clubs involved agreed in June to make a combined “goodwill payment” of £ 22 million to support the community and grassroots sport game.
A league statement in June said the clubs had agreed to support rule changes that would result in 30 points being awarded to any club involved in such a competition in the future. In addition, if any of the Super League’s original six were involved, they would each be fined £ 25million.
The fan-led review, led by Conservative MP Tracey Crouch, was initiated by the government following the Super League fiasco.
His final recommendations are due to be published next week, with Crouch saying in the interim results back in July that an independent regulator is needed to protect the future of important aspects of the English game.
However, Bell doesn’t think the review will have the desired impact on the game’s financial regulation.
“Even with the best of intentions, we don’t believe that the fan-led review will deliver the reforms needed to stabilize the financial side of football,” he said.
“Without the required understanding of the fundamental economics of the game, the same mistakes will continue to be made with the same results.
“Our data clearly shows that the financial and economic model of football is in disarray, but the operators of football seem oblivious and refuse to acknowledge our results.
“Since we were largely correct with our assumptions and forecasts, we fear for the game if it continues to ignore the fundamental economic situation. In other industries that are experiencing similar economic losses, major structural reforms and bankruptcies, mergers and acquisitions are often the result. “