How Newcastle’s big January gamble points to a £100m summer ...Middle East

Newcastle United have added the potential to invest an extra £100million in the summer transfer window with their late flurry of player exits as Paul Mitchell’s “long-term” strategy to deal with financial fair play emerges.

The departure of Lloyd Kelly to Juventus in a loan deal that contains what sources believe are “easy to meet” obligations to turn it into a £20million permanent transfer follows Miguel Almiron re-joining Atlanta United for around £9million.

Those two transfers will represent Newcastle’s only business – and the truth is little has been worked on behind-the-scenes in terms of senior additions. While the club have made significant progress on a number of “project players” – with announcements expected in the coming days and weeks – they have not altered plans, even with the Champions League now in view.

The club coalesced around a decision not to pursue incomings weeks before their inactivity on deadline day, opting not to utilise Profitability and Sustainability Rules (PSR) headroom in a transfer window when there’s little value to be had or realistic chance of taking one of their top, long-term targets for a reasonable price.

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The likes of PSV Eindhoven winger Johan Bakayoko, Southampton prospect Tyler Dibling and Bournemouth‘s impressive Ilya Zabarnyi – all discussed as potential future targets as Newcastle prioritise the positions of centre-back, right-wing and striker for the next stage of their rebuild – were never available in the winter. And with Newcastle now in the hunt for the top five and a potential Champions League place, a plan A and B are being assembled depending on whether the squad will need to be supplemented with a raft of younger players with potential to support the demands of a fixture list supplemented by European football.

Internally, two substantial sales that won’t weaken the starting XI are being regarded as a success given that both Alimron and Kelly have virtually no “book value” in PSR terms. That means the deals negotiated for both will go on Newcastle’s books as “pure profit” and give them room to maneouvre on incomings, mitigate the need for a big sale before June 30 and also aid potential close season contract negotiations with Alexander Isak, who has 17 goals already this term.

It has been a window in which Newcastle have had to be “strategic”, which is something Mitchell returned to time and again when he gave his big sit-down interview in September. He will certainly face the brunt of the criticism if Newcastle’s season falls away – and a defeat to Fulham on Saturday was certainly uncomfortable as momentum built during December threatens to ebb away – but he is gambling on the club being able to undertake a much more precise and substantial rebuild in the summer.

If there is a criticism of Newcastle it’s that they haven’t been especially creative in their use of either the loan market or bringing in overseas players of potential, an area Mitchell is trying to improve by bolstering scouting networks and adding to the recruitment infrastructure.

Extensive negotiations with Lens and Abdukodir Khusanov’s representatives – first revealed by The i Paper in December – came to nothing as Manchester City were able to broker a deal for £33million. Newcastle’s decision not to enter the bidding, sources suggest, was informed by their PSR position and the potential knock-on impact for the summer.

Three successive transfer windows without big money incomings will also eliminate the prospect of a repeat of last summer’s desperate attempts to raise funds to avoid a breach of PSR limits – and protect Newcastle against “predatory” bids for Isak, Anthony Gordon or Sven Botman, who have all attracted covetous glances from Premier League rivals and overseas teams. If there are any sales, they will now be on Newcastle’s terms.

Whispers around Aston Villa‘s PSR situation – and that of a few others flitting between the amber and red zone – mean there’s likely to be more wheeling and dealing before June 30 that Newcastle might be in a position to exploit this year.

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None of this is what supporters want to hear when the club have needed to strengthen at right wing for almost two years and it does not make Eddie Howe‘s life any easier. But these compromises are the way of the world with PSR and financial fair play. If there is a silver lining, it comes in the lack of friction between Howe and Mitchell over this month’s strategy. Both seem to understand the remit and are realistic about what needs to be done and how it can help Newcastle in the longer term.

“Newcastle’s strategy is to free up some PSR space so that they’ve got a bigger warchest by selling players who are fringe players and from that perspective it represents smart business,” professor Rob Wilson, a football finance expert and programme director at the University Campus of Football Business, said.

“Take Lloyd Kelly – they signed him for next to nothing and are pushing him out for £18-20million and after you take out agents’ fees and other things they’ll probably bank the thick end of £15million PSR profit on that deal.

“You amortise player contracts on incoming transfers so that’s potentially a £70million player you can sign if you spread the deal over a five-year contract. So it’s a relatively modest sale that goes into the books as profit and frees up a whole load more cash that you can invest better because of the amortisation charges.

“Miguel Almiron, again, is almost total profit at £9-11million so it does create significant leeway.

“They’re creating more PSR headroom so they can go onto the next phase of their plan, which is to bring in some bigger players, I’d expect.”

As professor Wilson points out, a more complete picture of the club’s ability to trade will be provided when they reveal their latest set of accounts later this month. An insider told The i Paper they will be “revealing” and set out clearly the challenges the club still face in terms of financial fair play.

Their revenue is increasing but still lags significantly behind the Manchester clubs and others, like Chelsea and Arsenal, who have a long history of competing in the Champions League. Without that, Newcastle need to trade.

“By creating a good, positive transfer balance for players sold you are creating a whole new wave of opportunity for yourself in the summer,” Wilson says.

Football finance expert Kieran Maguire believes Newcastle are looking for “revenge” in June this year, with the club more likely to be taking advantage of clubs with PSR issues than being one of those required to sell this year.

“This is forward planning,” he says.

“They don’t want to be in the position they were in the last week of June 2024, so perhaps the thinking is getting a couple of deals through now, which gives them more flexibility in June in terms of buying. Fans forget that if you sell now it will improve the situation.

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“They got through to the end of last season by the skin of their teeth, it wasn’t pleasant for the club and they don’t have the benefit of the European money coming in this year so it’s a different budget.”

There is a theory that Amanda Staveley and the previous leadership of the club were more inclined to gamble in transfer windows and that the club had more dynamism because of it. Newcastle could certainly do with someone with her communications nous explaining their direction clearly in the next days or weeks but there is logic underpinning it.

Now the challenge is to make the right calls during a potentially transformative summer, when January’s inaction will be long forgotten.

“There’s no point in buying players just to placate people on the internet,” Maguire says.

“There’s a consensus – and it’s a wrong consensus – that spending a lot of money is the solution to every football club’s problems.

“Manchester United have spent a quarter of a billion pounds on recruitment and are oscillating in lower mid-table. Sometimes it is better to have a more strategic approach.”

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