The specifics of a new FFP system to which Newcastle United will have to adapt are to be finalized after the Premier League and the EFL have agreed on a new financial distribution framework, sources have told Football Insider.
Uefa introduced a new revenue-based financial fair play model at the start of 2023, replacing the old measures which limited clubs to losing £25m over a three-year period.
The Premier League and the EFL are expected to mirror Uefa’s system, which – when it has been fully phased in by 2025 – will prevent clubs from spending over 70 percent of turnover on wages, transfers, and agent fees.
However, the intricacies of the new spending measures will be decided in tandem with a new financial arrangement between the top two bodies in English football, with the EFL angling for a greater cut of top-flight broadcast money.
The EFL currently receives around 16 percent of the Premier League’s pooled TV cash, but the imminent introduction of an independent regulator with the power to impose its own system has emboldened them to ask for 25 percent.
Football Insider broke the news last Friday (17 March) that there had been a breakthrough in talks – and it was reported in the subsequent days that the Premier League had offered around 20 percent, equating to an extra £125m per year.
It is not known how the EFL, which has sent a communique to its clubs informing them of the offer, has reacted to the proposal, but a positive response could signpost the beginning of discussions about a new FFP framework.
Both the Premier League and the EFL will in due course adopt a model which limits clubs to spending a percentage of revenue on wages and transfer-related expenses, but the exact ratio is yet to be finalized.
Experts consulted by Football Insider believe that the top flight will adopt a more lenient approach than Uefa, just as they did under the governing body’s previous FFP mechanism.
What exactly will happen with the EFL’s spending limits, which currently allow clubs to lose no more than £39m over three years, is less clear.
There is widespread recognition that more effective regulation is necessary as more and more clubs roll the dice financially in an attempt to reach the Premier League.
Meanwhile, the Premier League’s most ambitious clubs – of whom Newcastle are the most prominent – are waiting to discover how much they will be permitted to spend on new signings under a new system.
It is possible that the Magpies could be subject to Uefa’s FFP quota next season given that they have every chance of qualifying for either the Champions League or Europa League.
The owners have always stressed that the club’s rise will be steadier than the likes of Man City’s because of FFP constraints and their long-term strategy is contingent on how much they can shell out in the transfer market.
It is for this reason that the club’s commercial department has gone into overdrive, courting new commercial deals and assessing how they can best collaborate with PIF’s vast business portfolio.
