While Newcastle United may have been humbled by Sunderland this weekend in the Tyne-Wear derby, there is still a healthy distance between the two clubs financially.
It was a really disappointing weekend for Newcastle United and a real low point in the season as they succumbed to a 1-0 defeat at the Stadium of Light.
After losing on Sunday, do you think Newcastle United will finish higher than Sunderland this season?
They weren’t particularly great, but they didn’t need to be.
It was a result that highlighted Newcastle’s major problems this term, and it also put extra pressure on Eddie Howe. But, this is merely a bump in the road for the Magpies, or at least that’s what we hope.
In the short term, Newcastle have a lot of making up to do to their fans. However, in the long term, there are still plenty of reasons to be positive about the project being built under PIF.
Newcastle United and Sunderland are both in an exciting place
Geordie Boot Boys spoke exclusively to finance expert Adam Williams about the differences and similarities between the North East rivals, and he suggested both clubs are set for very exciting futures.
Williams said: “Newcastle and Sunderland both have a lot of the ingredients to be a kind of new class of Premier League powerhouse.
“They’ve got big catchment areas for youth development, huge dedicated match-going fanbases, very marketable history, the kind of brand identity that investors love, city-centre stadiums and so on. It makes my skin crawl describing clubs in these kinds of cold, clinical terms, but that’s the truth of what investors are looking for.”
However, there are some drawbacks. In particular, Williams highlighted the muddy waters around plans to redevelop St. James’ Park as a potential problem.
He added: “There are other plus points in that regard too, such as the fact they are both relatively close to an airport. I think the one area where they both have a bit of a stumbling block is stadium infrastructure.
“Sunderland are in dispute with the local council about a housing development that could halt their long-term expansion plans, and Newcastle have seemingly made little real progress with their ambitions to build a new stadium. It’s a tricky build and it looks like we’re some way from the club actually breaking ground there.”
Which club is financially stronger?
Obviously, with the heated rivalry between these two teams, it figures that we had to work out which club is in the stronger position. Newcastle fans will be happy to know, it’s the Magpies who come out on top, but there is a caveat.
“As things stand at the moment, Newcastle clearly have better-resourced owners. And, if they stay true to their word, they are always going to spend right up to the limit of PSR, SCR or whatever financial rules are introduced in the future,” Williams said.
“If I was to play devil’s advocate, however, you could argue that Newcastle are one tiny piece of PIF’s empire and they are basically at the whims of the Saudi government. If they lost interest and decided the investment isn’t generating the kind of return – be that political or financial – that they want, they could pull the plug,” he continued.
“When Amanda Staveley and Mehrdad Godoussi sold their shares, it valued the club at about £1bn. That’s about 0.1% of PIF’s assets. With Kyril Louis-Dreyfus, on the other hand, Sunderland are his crown jewel. In terms of the assets he himself actually owns, Sunderland will be among the most valuable, especially if they stay in the Premier League for a few seasons.”
Simple question, has Eddie Howe taken Newcastle United as far as he can? 👀
Will Sunderland ever overtake Newcastle United?
So, can Sunderland ever catch up to Newcastle? The simple answer is no. As fascinating as the Black Cats project is, it’s nowhere near what PIF are doing on Tyneside.
Williams concluded: “They’re not going to be worth anywhere near the same as Newcastle any time soon, but as a p