Sunderland’s return to the Premier League has opened up a world of opportunity—but also fresh financial constraints.
Speaking to talkSPORT, football finance expert Kieran Maguire explained how Profit and Sustainability Rules (PSR) will affect what the Black Cats, along with fellow promoted sides Leeds United and Burnley, can spend during the summer transfer window.
Maguire revealed that although Premier League status brings more income, promoted clubs are significantly more restricted in terms of the losses they’re allowed to post compared to long-established top-flight teams like Manchester United, Tottenham Hotspur, and others.
“The sides promoted, they’re having to operate to a certain extent with one hand tied behind their back because the established Premier League teams can lose £105 million, but Sunderland, for example, can only lose £61 million because you’re restricted if you’ve just been promoted,” Maguire explained.
“So it is more difficult. Sunderland can spend a lot of money. They could drop £200 million, but that’s assuming they’ve got it in their bank account to spend. Leeds are probably a wee bit less, £100 million to £150 million, and Burnley could certainly spend well in excess of £100 million as well. So for PSR reasons, they can spend. That’s one thing. It’s a bit like having a credit card limit. It doesn’t necessarily mean that spending to your limits is a good thing.”
Maguire then broke down exactly how the three-year PSR assessment system works—and why the newly promoted clubs Sunderland, Leeds United, and Burnley are at a structural disadvantage compared to the likes of Wolves, Crystal Palace, or Brighton.
“The way that the system works is that you’re assessed over your last three years. So if your last three years have been in the Premier League, every year in the Premier League, you can lose £35 million. So if you’ve got a club like Wolves or Palace or Brighton, they’ve been in the Premier League a few years, and they can lose £105 million.
“If you’ve just been promoted from the Championship, you get a £35 million allowable loss for your first season in the Premier League. But each season that you’ve been in the Championship, you can only lose £13 million. So, if we take a look at Sunderland, they’ve been promoted from League One through to the Championship.
“Now they’re in the Premier League; £35 million plus two x £13 million means that they’ve got £61 million. Leeds have got £61 million, and Burnley, because they’ve had two years in the Premier League, can lose £83 million.”
Is it worth newly promoted teams spending loads of money in the Premier League?
“We’ve seen sort of two strategies in the last few years. If we look at when Burnley, Sheffield United, and Luton were promoted a couple of seasons ago, they budgeted to get relegated. Luton were paying £25,000 a week, and Sheffield United were paying less than £30,000,” Maguire added.
“They had the three lowest wage bills. They had three of the lowest spends on players. So they effectively said, We think we’re going to go down. If we get 17th, it’s a bonus. Then you contrast that with the strategy that we saw last season; both Ipswich and Southampton spent over £100 million. And that sounds like a lot of money, but when the average spend in the Premier League was £140 million, it’s not as much as you think.
“And you’ve got to run to stand still in the Premier League. And I think the problem that the promoted clubs have had is that we’ve still got some giants in the Premier League who can spend unlimited amounts. You’ve then got sort of the cool kids, the smart kids on the block, the likes of Bournemouth and Brighton and Brentford and so on, who have now sort of established themselves as you don’t really have them down for being relegation candidates.
“So you look at those clubs that have come up, even if they spend money, who are they trying to bring into the relegation dogfight? And it’s difficult to name any of the existing 17 Premier League clubs. So you think, well, they’ve got a good chance of going down unless they really get their act together this summer.”
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