The date for Premier League clubs to have their financial situations sorted in relation to profitability and sustainability regulations (PSR) has now passed.
June 30 has become an early “deadline day” in the summer transfer window as clubs scramble to avoid being in breach of PSR and at risk of point deductions.
Everton and Nottingham Forest were both punished with deductions last season and so clubs appear more aware of the risks. It was no surprise to see a rush of deals done in the final days of June, including mutually beneficial moves between clubs.
So what business was done by those clubs at risk of PSR breaches, have they managed to ease concerns and how will it affect them for the rest of the summer?
The Athletic’s experts break down the situation for their sides.
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Everton
What was the club’s state of play going into June 30?
This was not Everton’s first rodeo. PSR had been breached in back-to-back seasons, first resulting in a six-point deduction on appeal before a further two-point penalty made life even more challenging last term.
The hole that Everton found themselves in was not nearly as deep this time around after 12 months of cost-cutting. That was reflected in their unyielding stance over the interest shown in Jarrad Branthwaite and Amadou Onana. A need to sell was never as grave this summer.
A shortfall remained in PSR calculations ahead of the end of the financial year but the belief was always that a relatively small deal — or two — would be enough to right the ship in time.
How did they resolve any lingering PSR issues?
The sale of academy graduate Lewis Dobbin was the key step. Although Everton committed to signing Tim Iroegbunam in what effectively stood as a swap deal, the £9million ($11.3m) raised from Dobbin’s departure represented pure profit on the books.
That immediately helped plug much of the gap and ensured any thought of selling a far more valued asset, such as Branthwaite or Onana, at lowball prices could be forgotten.
There was also the departure of defender Ben Godfrey over the weekend to further strengthen Everton’s PSR position. The 26-year-old joined Italian side Atalanta for a sum in the region of £11million. Godfrey’s book value was between £4m and £5m after initially joining from Norwich City for £25m four years ago but every little helped ahead of June 30.
Ben Godfrey joined Atalanta (Emma Simpson/Everton FC via Getty Images)
There is, though, still the lingering unknown of Everton’s dispute with the Premier League over the club’s 2022-23 accounts and the capitalisation of interest payments. That is best explained at length here.
What is their situation now for the rest of the window?
One loss-making season (2021-22) can be forgotten by Everton now in a new three-year rolling cycle to the end of 2024-25 but, even with the promise of new owners and a fresh start, there will still be a need for prudence.
There is no quick fix to Everton’s financial issues and, especially with the construction of a new stadium nearing its completion, do not expect lavish spending to come in the remainder of the summer.
Everton have worked hard to get back towards compliance and the mistakes of the Farhad Moshiri era are not easily rectified. US businessman Dan Friedkin will have his own plans for Everton’s future and there will be additions required to back Sean Dyche ahead of the new season after last season’s escape from relegation. There is a willingness — and need — to remain sensible.
Philip Buckingham
What was the club’s state of play going into June 30?
Leicester City were already facing a charge by the Premier League for an alleged breach of profit and sustainability rules for the 2022-23 season, in which they were relegated.
The English Football League also made numerous attempts to punish them last season for what they suspected was another breach in the Championship.
How did they resolve any lingering PSR issues?
The sale of Kiernan Dewsbury-Hall to Chelsea should ease some of Leicester City’s concerns over another charge for breaching PSR, but they still face an anxious wait to find out for sure.
After changing their accountancy year to end on June 30, Leicester can now include the £30million Dewsbury-Hall deal along with the sales of Harvey Barnes for another £30m to Newcastle United and Timothy Castagne to Fulham for £15m last summer following the club’s relegation to the Championship.
Dewsbury-Hall has moved to Chelsea (Michael Regan/Getty Images)
The club has also jettisoned many high earners who left as free agents last summer, such as Youri Tielemans, Jonny Evans, Ayoze Perez and Caglar Soyuncu, but they also spent over £30million on replacing them with Mads Hermansen, Harry Winks, Conor Coady and Tom Cannon.
Leicester also received £10million in compensation from Chelsea for taking manager Enzo Maresca and his staff.
There are so many unknown variables about the process of PSR and Leicester’s situation is unique. They are the first side to face a modern PSR charge and be relegated while still in breach. They also had to adjust their budget from the seventh-highest in the Premier League to trying to adhere to the lower loss threshold of the Football League.
What is their situation for the rest of the window?
Leicester now face an anxious wait to find out whether selling Dewsbury-Hall was worth it, although they have previously stated the need to return to their previous model of selling one asset every summer and recruiting young talent they can develop.
The cost-cutting of the past year since relegation should mean that, moving forward, they don’t have any other PSR concerns — as long as they remain in the Premier League.
Rob Tanner
Chelsea
What was the club’s state of play going into June 30?
Chelsea have been relaxed about their position for several months. The message coming out of Stamford Bridge remained consistent in that they always believed there would be no issues with PSR compliance. The plan was to conduct some business early with ins and outs. Rather than being PSR-related, Chelsea wanted to get as much done as quickly as possible so new head coach Enzo Maresca can have limited disruption during pre-season and be able to prepare knowing his squad is in place.
A sign of their confidence is that there was no last-minute big selling spree, despite having several players available for transfer.
How did they resolve any lingering PSR issues?
Firstly, Chelsea had the benefit of a lot of business done last summer (after June 30) to help minimise the damage done to the books. For example, the sale of Mason Mount for an initial £55million counted as pure profit. Senior players on big wages like Cesar Azpilicueta, Christian Pulisic, Hakim Ziyech and Pierre-Emerick Aubameyang all left too.
Mount’s sum has been added to with the departures of more academy talent in the past week. Ian Maatsen generated £37.5million by going to Aston Villa and Omari Hutchinson’s sale to Ipswich Town has brought in an initial £20m, although Arsenal will get around £3m of that due to a sell-on clause put in when the winger switched London clubs in 2022. Chelsea also earned another £28m from Newcastle triggering an obligation-to-buy option in the agreement put in place last year for Lewis Hall, who initially joined on a season-long loan. Despite the official announcement coming on July 1, it was completed on Chelsea’s side to be counted for 2023-24.
Ian Maatsen has joined Aston Villa (Dean Mouhtaropoulos/Getty Images)
Chelsea registered four permanent signings before the cut-off point. The first was a free agent (Tosin Adarabioyo joined as a free agent from Fulham) so was not an issue anyway.
Omari Kellyman (£19m from Aston Villa), Dewsbury-Hall (£30m from Leicester) and Marc Guiu (€6million;£5.1m from Barcelona) were the others. Guiu may have been announced on July 1 and Dewsbury-Hall should follow any moment, but the timing of a statement does not reflect when Chelsea have actually added a player to their database.
As with all signings, Chelsea will amortise the transfer fee for the maximum of five years allowed in each player’s contract by the Premier League (the club continue to offer players longer than five years despite the change in Premier League rules made last year). However, because Dewsbury-Hall and Guiu were bought in the final days of the 2023-24 financial year, the amortisation cost due for 2023-24 will actually be in the low thousands rather than the millions. For example, Chelsea agreed the deal for Dewsbury-Hall on June 30, but he does not count as a full amortisation year at £6m. Instead, his first amortisation cost is just the price for one day.
What is their situation for the rest of the window?
Chelsea are already working on being fine in 2024-25, the last year of PSR. Another academy player, Michael Golding, is about to join Leicester for around £5million.
Chelsea plan to make many more sales before the deadline. These will be worth well over £100million. Conor Gallagher, Armando Broja, Romelu Lukaku, Kepa Arrizabalaga, Cesare Casadei, David Datro Fofana, Malang Sarr and Trevoh Chalobah are all candidates for departure. Another sign of their strong position is that the club plan to use a lot of the revenue to reinvest in the squad should targets meet their valuations.
Simon Johnson
Newcastle United
What was the club’s state of play going into June 30?
Critical, although nobody was quite aware of just how fraught their circumstances had become.
As of Saturday morning, less than 48 hours before the deadline, Newcastle faced a shortfall in excess of £50million — and a potential double-digits points deduction.
How did they resolve any lingering PSR issues?
In frantic and rather dramatic 11th-hour fashion. Sensing Newcastle’s vulnerability and their increasing desperation, rivals attempted to pick off their players. Chelsea asked about Alexander Isak’s potential availability, conversations were held with Liverpool regarding Anthony Gordon and more than half a dozen Newcastle players were floated for potential exits.
Eventually, Elliot Anderson and Yankuba Minteh — both of whom had been discussed in potential deals with several clubs — moved to Nottingham Forest and Brighton respectively for fees north of £30million.
Yankuba Minteh has moved to Brighton (ANDY BUCHANAN/AFP via Getty Images)
If compliance was still potentially in doubt, Newcastle agreed compensation with Manchester United to release Dan Ashworth from his contract following four months of gardening leave. The money received for the sporting director should, Newcastle believe, take them back into the black.
But that is merely the short version. The tale is far too complicated to outline in full within this answer. Thankfully, here is a long read for you.
What is their situation now for the rest of the window?
Theoretically, Newcastle now have a decent capacity to spend as Howe looks to strengthen his squad, with a right winger, forward and centre-back the priorities.
Further sales of senior players are still expected — with Kieran Trippier, Miguel Almiron and Callum Wilson among those who could leave — but Newcastle do not need to offload anyone with such immediacy anymore.
Instead, having already recouped more than £60million from player sales, they have a greater capacity to invest. With 2021-22, the first season post-takeover, dropping off the books, that means a loss of £70.7m is removed from their three-year rolling calculation.
What’s more, revenues have increased substantially over the past two seasons and, with the first year of the lucrative Adidas deal — believed to be worth between £25million and £40m annually — also being added, Newcastle should be able to materially bolster their squad.
Further incomings will follow Lewis Hall (loan turned permanent), Lloyd Kelly (free transfer), John Ruddy (free transfer) and Odysseas Vlachodimos (signed from Forest) to Tyneside.
There remain PSR limitations, but Newcastle are no longer shackled and unable to sign players for a fee as they were in January.
Chris Waugh
Nottingham Forest
What was the club’s state of play going into June 30?
Forest were undoubtedly on a sticky wicket. Already carrying the scars of last season’s four-point deduction for a PSR breach of £34.5million, the threat was very real that they would again find themselves on the wrong side of the spending threshold.
That it was Forest’s second season in the Premier League meant the loss limit had climbed to £83million, but another ambitious season in the transfer market ensured sitting on their hands ahead of June 30 was not an option. Money needed to be raised before the accounts were signed off and the worry was that it could lead to the sale of key personnel, such as Brazilian defender Murillo.
There was relief, in the end, that it did not need to come to that.
How did they resolve any lingering PSR issues?
Forest are confident their late business will be enough to make sure they are compliant when the 2023-24 accounts are scrutinised. The sale of Orel Mangala, who turned a loan permanent with Lyon, had long been considered a welcome boost but it was the exit of Moussa Niakhate that made the difference.
The 28-year-old Senegal international was another sold to Lyon for a sum thought to be in the region of £20million, plus add-ons. That represents a significant climb on the £8.5million deal that brought Niakhate in from Mainz in 2022 and allows Forest the chance to book a large portion of his sale as profit in their accounts.
Forest believed that Niakhate’s sale would see them comply and there was also the departure of goalkeeper Odysseas Vlachodimos to further strengthen their cause. The Greece international, who has struggled for opportunities with Forest, was sold to Newcastle United for an undisclosed sum.
What is their situation now for the rest of the window?
Forest’s £35million capture of Elliot Anderson would suggest there is still a willingness to spend this summer and, for the first time since promotion, there is the chance to have the same losses — £105million — as others in the division.
That provides Forest with greater headroom but the heavy deficit posted in a first campaign back in the top flight means the spending power still has to have its limits in a three-year assessment period.
Forest signed Elliot Anderson from Newcastle (George Wood/Getty Images)
The expectation is that Forest will go with a streamlined squad, with several high-earners already cut from the books this summer. That provides the capability to bring in a signing of Anderson’s ilk, but there is still a prospect that Forest may choose to cash in on an asset to aid a summer rebuild.
Murillo or Morgan Gibbs-White would be the most likely candidates on that front but, most importantly, the passing of the June 30 deadline ensures there will not be pressure for any players to be sold off cheaply and against the club’s interests.
Philip Buckingham
Aston Villa
What was the club’s state of play going into June 30?
Villa had long been braced for this summer to be a significant one. The heavy losses posted in 2022-23, with wages taking up an uncomfortably high portion of turnover, demanded that funds were clawed back ahead of their financial year ending.
That the club’s original accounting cut-off point of May 31 was extended to June 30, allowing additional time for sales, entrenched the belief that a significant exit was needed to redress the balance.
Villa had rolled the dice in their pursuit of the Champions League under Unai Emery last season and something effectively had to give if there was not to be a PSR breach coming. It called for sacrifices and creative trading. Villa would eventually find the means to deliver both.
How did they resolve any lingering PSR issues?
Douglas Luiz ended up being the winning ticket for Villa, solving most of the PSR problems in a flash. The 26-year-old Brazilian joined Juventus in a deal worth £42.3million and, given his lengthy service at Villa Park, was able to be booked largely as profit. It was a reluctant sale given Luiz’s influence, but the money recouped was as timely as it was abundant.
Douglas Luiz joined Juventus (James Baylis – AMA/Getty Images)
Villa also did other bits of business to ensure there would be no anticipated PSR problems. The sale of Tim Iroegbunam to Everton for £9million, with Lewis Dobbin moving in the opposite direction for the same amount, added further profit to the 2023-24 books, as did the exit of Omari Kellyman.
Although previous club Derby County stand to make a cut of that £19million as a sell-on fee, Kellyman’s move to Chelsea represented another useful sale. Emery was known to be an admirer of the 18-year-old but that sum was much too good to turn down for a largely unproven youngster.
All told, Villa were able to recoup in the region of £70million through player sales in a week.
What is their situation now for the rest of the window?
Next season will almost certainly see Villa set new turnover records as one of four English clubs competing in an expanded Champions League and that forecast revenue lift will help them remain competitive in the transfer market this summer.
Villa have already spent £37.5million on Chelsea left-back Ian Maatsen, as well as signing the Juventus pair Samuel Iling-Junior and Enzo Barrenechea. The additional business that has landed Dobbin and Ross Barkley means Villa have already spent north of £70million, but those buys can all have their fees amortised over the length of their contracts to bring breathing space.
Champions League qualification is not a silver bullet to financial issues, as Newcastle showed last season, but there will now be hope an improving squad can be kept together and improved with pragmatic investment.
Philip Buckingham
(Top photos: Getty Images)
