Pardew has been frustrated this summer over their lack of signings.
But he remarked: "City are backed by the revenue of a state. It's very difficult. I don't begrudge them it. They have a business model and if they can make it work for them, then hats off to them.
"Our business model is such that we can't generate the money they can, therefore the gap widens.
"A couple of players have moved to other clubs that we were interested in. We can't compete with them. The bottom line is we try to maximise the revenue we have."
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