Newcastle United are a 'big club' with huge potential but Wolves chairman Jeff Shi has warned that the Magpies will 'reach a ceiling sooner or later' because of financial restrictions.
The club's owners spent £93m on Kieran Trippier, Chris Wood, Bruno Guimaraes, Dan Burn and Matt Targett (loan) in their first window last January in a bid to beat the drop and Newcastle will strengthen once more in the summer. However, it is important to stress that the hierarchy are acutely aware of the need to comply with the Premier League's profit and sustainability regulations, which only permit top-flight clubs to lose a maximum of £105m over three seasons.
Newcastle's owners also hope to one day compete in Europe so they are taking note of UEFA's new financial sustainability rules, which will eventually limit clubs playing in European club competitions to spend 70% of revenue on wages, transfers and agents fees by 2025-26. Newcastle are currently running at about 65% when it comes to wages to turnover alone and part-owner Amanda Staveley has previously admitted that figure is 'probably too high'.
