Newcastle are playing ‘poker game’ in January with £35m PSR wiggle room ...Middle East

Back in November, Eddie Howe warned of a “complex” January for the club, with incomings dictated by player trading. By mid-December it had been downgraded to almost certainly a quiet one.

Newcastle's defeat to Bournemouth sent a clear message to Paul Mitchell

Things can change in football – and Newcastle famously left it late with Anthony Gordon two years ago – but even the most optimistic forecast from the club’s recruitment department isn’t allowing for one of their key targets to suddenly become available for the right price in little over a week.

Mitchell told colleagues in the autumn that the club’s assessment of their position in relation to Profitability and Sustainability Rules (PSR) would be the major driver of January transfer plans.

“We absolutely still have ambition but whether we like it or not, it’s a continuing factor in everything we do,” one insider said.

“You can tell the clubs that others think might have a more pressing PSR need by the sort of bids that are starting to go in now,” one recruitment source – not employed by Newcastle – said.

“The message seems to have got out there about Newcastle’s stance. The fans might not like it right now but it’s of paramount importance they don’t do something that puts the pressure on to sell an [Alexander] Isak, an [Anthony] Gordon or a [Bruno] Guimaraes.”

Newcastle have not received any bids for Alexander Isak (Photo: Getty)

PSR has been the dominant narrative at Newcastle for more than a year now and fans are weary of it.

It also puts pressure on Howe and the players to maintain the overachievement of the last six weeks.

While Howe is understood to be aligned with the club’s thinking on recruitment – and has spoken publicly about “business needs” trumping football demands – he was right to fret about his squad becoming “stale” the longer it goes without an emphatic statement of intent in the transfer market.

The mantra from inside St James’ Park, repeated this week, remains the same – Newcastle are committed to spending the maximum they can under the current rules.

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Even last summer – perceived as a failed window – Newcastle invested 28m converting the loan of left-back Lewis Hall into a permanent deal.

Their current PSR stance is cute but not a smokescreen.

“There is wiggle room for them in January but I think that the club saying they are guided by PSR and it is a limiting factor on their spending is a fair assessment.

According to his calculations – which he admits are estimates – Newcastle’s PSR wiggle room for the next reporting cycle is “somewhere between £30m and £40m”. In theory that sum could be committed to new signings.

Lewis Hall looks like a real bargain having signed from Chelsea for £35m (Photo: Getty)

Football finance expert Kieran Maguire believes it is partly a message to ensure no “Newcastle tax” is applied to incoming deals while the influential Swiss Ramble blog believes the club have capacity to lose a shade more than £80m the next accounting cycle and still stay within the PSR limit.

“It’s sensible for them to send the market the message that they’re worried about PSR and have to be cautious about what they’re doing.

A clearer picture will emerge next month when Newcastle announce their latest set of financial results, which will give a deeper insight into their true PSR state of play.

The latest profit has been driven by player trading – namely the sales of Elliot Anderson and Yankuba Minteh.

But there will be no back-slapping at St James’ Park at that fact.

Newcastle are perhaps not helped by the fact that they committed significantly to “front-load” the squad with quality players who are on long-term deals in the first two years post-takeover.

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Having a lot of expensive players on big contracts means it is harder to sell for profit, which is why Gordon and Bruno Guimaraes would now need to go for mega money to make it even worth thinking about including them in any player trading model.

“It’s a complex picture,” Wilson says.

“So for Paul Mitchell, Eddie and Steve [Nickson] there’s a lot of work to be done around which players do they really want to keep – and extend their contracts by a number of years to amortise their values over a number of years – versus the limitations that places on them in terms of moving that player on.”

“The reality is that the more windows go past without them spending, the more flexibility they will have in the next window,” Wilson says.

But had that gone through, the pressure would have been right on to sell – either this month or before the “soft” PSR deadline of 30 June, when the accounting period ends.

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It is not that targets haven’t been identified heading into this month.

Clearly that experience spooked executives at St James’ Park.

It was a stressful, fractious period that strained relationships and led to the sale of two outstanding young players.

The i Paper also understands that there have been offers from Al-Shabab and clubs in Germany, Greece and Portugal for Odysseas Vlachodimos.

The club’s Saudi owners remain committed to the Magpies (Photo: Getty)
In Riyadh the message is consistent: this is a long-term plan for sustainable growth into a club that is consistently challenging for honours.
Mitchell is there to shape football strategy but improvements in data, scouting, systems and workflows won’t be an overnight formula for success.
This year they sit in 15th place, with revenue having grown by 29 per cent to £314m over the last 12 months.

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The Stack fan zone has been a big success, and The i Paper understands that has encouraged the owners to look at other “exciting” projects.

Then there is the potential “big bang” moment for the club – a decision on the stadium that is due “within weeks”.

“I think 50 per cent of the clubs in the top 20 of the DFML are in the process of renovating or upgrading their stadiums.

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A return to the Champions League this season would be a potential game-changer, too.

“I think that also gives them an ability to take their brand onto a global profile and say ‘Okay, well, this is what we can leverage as a brand, whether that’s on a sponsorship stream or merchandising stream’.

Could the owners do more? While Chelsea have pushed the envelope of the rules, selling land and a stake in their women’s team to give them more access to funds, Newcastle’s position is that they will comply with Financial Fair Play (FFP).

PIF sources point out that newly appeared advertising hoardings bearing the fund’s name are a visible sign of their commitment.

PSR pressure should ease but ‘there’s no magic wand’

The good news for Newcastle fans is that the summer should be different.

It is a distinct possibility.

Few inside Newcastle expect them to sit on their hands in the close season.

Mitchell was notably prominent as Newcastle gave a guided tour to Georgian prospect Vakhtang Salia, who will join the club in the summer after signing last season.

Eye-watering revenue growth, smart recruitment and a brilliant manager are the club’s formula for cracking the FFP code.

Time will tell whether January’s caution proves to be a canny strategy.

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