Newcastle United may not be in European competition for 2026-27, yet UEFA rules are very much governing what they can do in the transfer market.Last month, UEFA confirmed that Newcastle have been fined a combined €6million (£5.1m, $6.9m) for overspending during the three years ending June 2025, and for exceeding their 70 per cent squad-cost ratio (SCR) in 2025.Alongside their financial punishment, Newcastle entered into a stringent future-compliance agreement following their breach of UEFA’s financial sustainability regulations (FSR).Details of that settlement have been released and here, The Athletic outlines how it will affect Newcastle, particularly their transfers.What are UEFA’s FSR rules?The European governing body employs two rules, each of which Newcastle breached.The more commonly cited SCR limits clubs to spending 70 per cent of relevant turnover in a calendar year on wages and amortised transfer and agent fees. Newcastle’s expenditure is believed to have reached around 75 per cent across 2025, accounting for €3m of their fine. The Premier League has introduced its own SCR limit — set at a higher 85 per cent — for the upcoming 2026-27 season.Domestic profit and sustainability rules (PSR) have been replaced, but UEFA’s football earnings rule employs the same principles around limiting overall losses, and the other €3m fine was due to exceeding those.In fact, it is stricter than the version employed by the Premier League since the mid-2010s. Domestically, clubs were limited to £105m (€120m) in adjusted losses over three years. UEFA allows only €60m in rolling three-year losses, and several English clubs have fallen foul of that. UEFA allows clubs to increase their limit by €10m per season if they meet certain financial health criteria — but English clubs generally don’t.What does the agreement actually set out?Newcastle wanted to stress to UEFA that they are adamant they will not breach these rules again and that they will be within the restrictions laid out.The settlement concerns the next three ‘reporting periods’ — 2026, 2027 and 2028 — as well as the next three seasons, from 2026-27 to 2028-29, and outlines the financial position Newcastle must find themselves in at each of those junctures.For the previous campaign, Newcastle’s football earnings “2026 target” was to have a maximum deficit of €5m in 2025-26, although that could be extended to €60m if Newcastle’s owners injected equity last season, which they did. The “2027 target” (which applies for 2026-27) is to not have any deficit at all, though that can again be extended to a maximum €60m, but this time only by whatever headroom they had under the 2025-26 €60m limit. For the “final target”, relating to 2027-28, Newcastle can only lose a maximum of €60m over three seasons, again able to be increased by €10m a season if certain conditions are met, which is UEFA’s ‘normal’ permitted deficit.Theoretically, Newcastle’s three-year rolling losses could be permitted to rise to €80m for each season, but part of the suspended element of their punishment would then become active (on a proportional basis, relative to how much beyond €60m they have actually overspent). Newcastle were actually fined €10m by UEFA for breaching football earnings, though €7m of that is conditional — with up to €2m due if the club exceeds the 2026 target, then up to €2.5m due if they breach either of the 2027 or final targets.Should Newcastle “demonstrate to the satisfaction” of UEFA that it has been compliant on a rolling basis by 2027, then an ‘early exit’ from the settlement regime will be granted.To demonstrate ongoing compliance, Newcastle must submit six-monthly progress reports to UEFA’s Club Financial Control Body (CFCB), outlining their transfer balance and adherence to the settlement. Should anything that “is likely to have a significant impact” on their potential compliance arise, then Newcastle must “proactively submit without delay any information” to the CFCB “irrespective of any periods of deadlines”.Should Newcastle fail to prove they are compliant, then further financial and sporting sanctions are possible.Could Newcastle really be banned from European competition if they don’t adhere to these restrictions?Yes.If Newcastle exceed their agreed ‘targets’ by more than €20m in any of the three seasons from 2025-26 to 2027-28, their settlement will be terminated and, more damagingly, they would be expelled from UEFA competition for a full campaign.