Eddie Howe hits back at Liverpool owner's spending cap proposals
Eddie Howe has pushed back against a call from Liverpool owner John Henry to further tighten Premier League spending rules as it would severely restrict Newcastle United’s room for growth.
Sky Sports pundit Gary Neville has already hit out at comments from Henry earlier this week that the Premier League should introduce a spending cap, claiming it was designed to enable “the established elite” to “lock in their positions” at the top of the game.
It had been suggested Liverpool were keen for the Premier League to limit club spending on wages, transfers and agent fees to just 70 per cent of revenue. That would be in line with Uefa proposals, due to come into force at the start of the 2025/26 season.
Top-flight clubs are already bound by the Premier League’s profit and sustainability rules, which allow for a total loss of £105 million over a three-year period and Howe argued that has already constrained Newcastle since they were taken over by Saudi Arabia’s Public Investment Fund in October 2021.
Newcastle have become particularly sensitive to criticism from Liverpool, with manager Jürgen Klopp also publicly questioning their new found wealth since the takeover.
Speaking to the Liverpool Echo, John Henry said: “There are ever-increasing financial challenges in the Premier League. The league itself is extraordinarily successful and is the greatest football competition in the world.
“But we’ve thought for some time there should be limits on spending so that the league doesn’t go the way of European leagues where one or two clubs annually have little competition."
Asked what he thought about John Henry’s comments, Howe replied: “I didn’t hear those comments so that’s a difficult one for me to give a full answer to. [But] I wouldn’t want to see any more restrictions on spending.
“We have spent money, don’t get me wrong, but future restrictions would certainly deny our ability to improve as quickly as we want to.”
Despite being owned by a consortium led by Saudi Arabia’s Public Investment Fund, Newcastle have been constrained by FFP regulations and were able to spend only £40 million in January on signing Anthony Gordon from Everton.
Howe was able to do that only because Newcastle sold striker Chris Wood – for a fee that could rise to £15 million – to Nottingham Forest and further trimmed the wage bill by also allowing Jonjo Shelvey to move to the City Ground.
Analysis: FFP forces caution on Newcastle amid spending sprees
Newcastle have spent about £250 million on players in the last three transfer windows but took the decision not to invest heavily in the winter as they wanted to leave room under FFP to be more ambitious in the summer.
They have not indulged in the sort of lavish spending seen by other clubs taken over by rich benefactors in the past – Chelsea, Manchester City and Paris Saint-Germain are the three most obvious examples – because of tighter FFP rules. These were partially designed to stop new owners distorting the market and rapidly transforming clubs with their own wealth to compete with the elite.
Strangely, Newcastle have announced only one new sponsorship deal since the takeover went through in the form of Middle East online marketplace Noon. As things stand, revenue streams have risen slightly compared with their position under former owner Mike Ashley. Telegraph Sport revealed last month that new deals will be announced before the end of the season, which should boost Howe’s summer transfer budget.
Even so, Newcastle’s turnover is likely to remain much smaller than the biggest clubs in England.
Transfer budgets have been a closely guarded secret since the takeover and expectations have consistently been dampened with the club pointing to the restrictions imposed on them by FFP rules.
But with a prudent approach in January, they were deliberately leaving themselves more room for manoeuvre in the summer.
And there is a lot of work to be done, with the team’s dip in form since Christmas, as well as the Carabao Cup final defeat by Manchester United, exposing the lack of quality in key areas, as well as lack of depth in the squad.
