Newcastle’s brush with a profitability and sustainability rules (PSR) breach appears to be over after a mad weekend scramble to complete outgoing transfer business.
But it is a period that leaves as many questions as answers. Here’s what we know.
What happened in the past week?
With the timing of Jude Bellingham arriving in the Slovakia penalty box, Newcastle are confident that two significant pieces of outgoing business – selling Yankuba Minteh to Brighton for a package worth £33m and Elliot Anderson to Nottingham Forest for nearly £35m – will be enough to prevent them from breaching the Premier League’s financial rules.
Both deals were confirmed by Newcastle just after midnight, which means they will be able to include them in the accounts submitted to the Premier League for 2023-24.
The transfers were reluctant, PSR-driven sales. i revealed the Brighton move for Minteh on Friday night along with the fact no buy-back has been inserted into the transfer. We also revealed that the Seagulls’ transfer metrics identify him as a huge prospect, which is ultimately why they have paid such a high price for a player of limited experience.
Indeed i understands Brighton’s hugely respected football data analysis department rated him as in the top five performers in his position across the whole of Europe last season. So losing him is a sizeable blow for Newcastle, who – ironically – need an upgrade to Miguel Almiron on the right-wing. Similarly they had no appetite to lose Anderson, who is 21, homegrown and highly-rated by Howe. But simply they had no choice.
Dan Ashworth’s controversial exit to Manchester United was finally agreed at the weekend, and it is understood the compensation from that deal will add towards Newcastle’s PSR balance.
Have Newcastle solved their PSR issues?
There still remains plenty of water to pass under the bridge – we won’t know whether they are charged with a breach until the Premier League makes a call in January – but i has been told the club is now “confident” they will avoid that nightmare scenario even though it is acknowledged the club’s PSR situation will be tight.
It wasn’t always that way last week, with Newcastle’s increasing desperation to do business alerting rivals to potential vulnerability around their crown jewels Alexander Isak and Anthony Gordon. That they would have sold either felt unthinkable – and it is worth pointing out neither got particularly close to leaving – but it also reveals the scale of the potential breach Newcastle were facing.
Newcastle will bank in excess of £60m from the sales of Minteh and Anderson to plug their PSR gap. If that was the size of their possible breach it could have led to a big points penalty. Everton were hit with an initial 10 point deduction (later reduced to six on appeal) last season for a breach of £19.5m which was described by an independent commission as a “serious breach that requires a significant penalty”. So the stakes were absolutely huge, especially as Newcastle’s internal target for next season is to finish inside the top six.
Had those two deals not been concluded serious questions would have been asked about how the club – which effectively hasn’t had a director of football since the turn of the year – was being run.
Did they really contemplate selling Anthony Gordon?
It depends who you ask. Insiders say the communication with Liverpool over Gordon last week was more “testing the market” for their player of the year, assessing the sort of price he could command, than coming up with a formal proposal or forcing him out of the door.
They have been honest about the need for player trading and the fact that everyone in their squad has a price so doing due diligence around one of their most saleable assets when they had a pressing PSR issue was responsible.
But it is also alarming that Gordon’s name was being floated a week before a deadline they had known about for months given his huge importance to the way Newcastle play at their best. Liverpool certainly believed there was a deal to be done – indeed sources on Merseyside confirmed the offer over the weekend, indicating it was “not for us” because they had too many wingers.
What will the fall-out of that be? Does it unsettle Gordon? Does it make Eddie Howe a little less certain of the project he is leading? Does it undermine the stated aim of the Saudi PIF to be number one?
It is clear some seriously unedifying scenarios were being mulled over the last week. It has chipped away at faith in the club’s hierarchy.
Does the nature of the last week raise questions for the Newcastle hierarchy?
The flaws in PSR are surely now clear to everyone, the arbitrary 30 June deadline just the latest inconsistency to add to a system that creates a glass ceiling for aspirational clubs along with ridiculous incentives to sell homegrown players.
But as illogical as the rules may appear, they are no surprise to Newcastle. That they appear to have scraped under the limit represents mission accomplished but the speculation around Isak and Gordon has alarmed many. It all felt a bit slapdash and dangerous.
It’s understood CEO Darren Eales may address these issues soon and he has to. Newcastle fans need to know what the plan is, whether ambition remains undimmed and just what the club’s PSR situation is moving forward.
The remain in limbo over Dan Ashworth – although a resolution may arrive sooner rather than later – have no director of football and there is tumbleweed when it comes to St James’ Park expansion and a new training ground. Clarity (and investment) is required.
Why have Newcastle signed Odysseas Vlachodimos?
Intriguingly Newcastle also signed Vlachodimos from Nottingham Forest for a “small fee” in a deal that will be considered seperate from the Anderson sale. Sources close to the player suggest he is coming in to challenge Nick Pope, so could be considered a Martin Dubravka replacement. The Slovakia international is widely expected to leave, with Saudi Pro League interest.
Newcastle have been keen on James Trafford but have not been able to match Burnley’s asking price yet. It may be that funds are re-assigned to more pressing areas, such as centre-back, right winger and a forward to compete with Callum Wilson.
What comes next?
A new accounting year means new possibilities and one of the ironies of Newcastle’s situation is that they are no paupers. They have no debt and the backing of one of the world’s richest sovereign wealth funds, who have invested hundreds of millions in the club since the takeover in 2021. It is just the Premier League’s definition of “sustainability” they are striving to satisfy.
Incoming business is expected – their interest in Chelsea’s Noni Madueke was revealed by i last month – while they are looking for a centre-back and are also keen on Forest’s Morgan Gibbs-White.
The nature of PSR means a limitless splurge isn’t possible. For at least one more season until PSR reforms kick in, they have to stick to rolling losses of £105m. And Uefa’s rules are even stricter, so responsible husbandry is still required.
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