When Newcastle United officials awoke early on Saturday, with less than 48 hours of June remaining, they still faced the daunting prospect of trying to plug a financial black hole that exceeded £50million ($63.2m). Otherwise, the double-digit points deduction they had feared for weeks, and were desperate to avoid, risked becoming a reality.
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The club’s frantic late attempts to comply with the Premier League’s profit and sustainability rules (PSR) by their annual accounting deadline led to a fraught, frenzied and largely unedifying week of discussions about the potential sale of more than half-a-dozen members of the first-team squad. “Scrambling like mad,” was a phrase repeated again and again about Newcastle within recruitment circles.
Such was the vulnerability that Premier League rivals sensed, even Alexander Isak and Anthony Gordon’s names were raised in talks but, although the club wanted to retain the former at any cost, the latter being floated to Liverpool — however fleetingly — only underscored the scale of Newcastle’s impending crisis.
Multiple senior figures have described this past week as the most difficult of their careers and the intense stress was felt from the boardroom to the head coach, through to the squad.
In the end, if Newcastle have indeed pacified PSR through two sales worth more than £60m collectively and an agreement to allow sporting director Dan Ashworth to join Manchester United, then they have somehow done so without losing their crown jewels or without significantly weakening their first-team squad.
Yankuba Minteh is an exciting prospect and Elliot Anderson is an electrifying academy product, but the former has never made an appearance for the club and the latter may have struggled for significant minutes following Sandro Tonali’s return from suspension.
They were necessary, if reluctant, sales to Brighton & Hove Albion and Nottingham Forest respectively — and go down as two of the three most lucrative in Newcastle’s history.
Sources inside Newcastle — who, like all within this article, spoke anonymously to protect relationships — believe they did what they had to in the most pressurised of circumstances and managed to secure decent prices, even if nobody wanted to lose Anderson. Amid all this they signed a new goalkeeper, with Odysseas Vlachodimos joining from Forest.
But the problem has been the means by which they have reached what may prove to be their PSR salvation. As The Athletic has learned:
- A fortnight ago, there were fears inside the club that a double-digit points deduction was possible given the scale of their deficit
- Premier League clubs speculated that Newcastle’s black hole was anywhere between £30m and £100m and, by Saturday morning, Newcastle still needed to recoup in excess of £50m
- Whether Newcastle have satisfied PSR remains unclear given the opaque nature of the system, although some insiders believe they have done enough to avoid a points deduction, even if the calculation is believed to be tight
- Minteh was seen as part of the solution for weeks, but Lyon’s £40m offer led to Newcastle holding out for that valuation, despite the player being reluctant to move and the club aggressively attempting to convince him to
- Rival clubs tried to capitalise on perceived vulnerability, with Chelsea making enquiries about Isak, though Newcastle explored every alternative avenue to keep the striker
- Conversations with Liverpool over Gordon came out of desperation, despite Newcastle wanting to retain the winger, but there are lingering fears internally that his head may have been turned
- Newcastle did explore the Saudi Pro League avenue but could not conclude any deals
- Several transfer meetings were held across the week, including a final one on Sunday afternoon, when a third sale was contemplated, with Kieran Trippier’s name floated just hours before he started for England against Slovakia at Euro 2024
- Miguel Almiron, Sean Longstaff and Callum Wilson are other players believed to have been floated as possible exits
- Newcastle had reluctantly identified Anderson as a candidate for sale in January given he generates “pure profit” as an academy graduate, but he was injured
- Everton’s Dominic Calvert-Lewin, Liverpool’s Jarell Quansah, Forest’s Anthony Elanga and Wolverhampton Wanderers’ Max Kilman were among the players Newcastle discussed signing as part of potential deals
- Newcastle actually now have decent capacity to spend given the 2021-22 accounts have dropped off the PSR cycle and income from their Adidas deal can be booked
Eddie Howe described the January transfer window as “unsettling”, but June was on another scale entirely and there could yet be further fallout. The optics have been alarming.
Serious questions must also be asked about how Newcastle found themselves in such a troublesome position. The PSR system has understandably faced criticism, but Newcastle knew the rules and Darren Eales, the CEO, insisted in January their “plan” was to always comply.
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Yet decisions taken over a three-year period — both with and without Ashworth, who had been on gardening leave since February but is now expected to take up his new role at Manchester United with immediate effect — and a distinct inability to sell well (until the weekend) led to this regrettable episode. Fans deserve an explanation from the hierarchy about what has unfolded and what comes next.
This is the story of a week like no other at St James’ Park.
One prominent agent quipped that if January 2022 was Newcastle’s mad trolley dash, this became their open-house auction.
After the January window closed without any income being brought in, there were debates internally about how best to tackle PSR.
Ageing players being sold was the most palatable from a footballing perspective but difficult to achieve in time.
Selling Isak or Bruno Guimaraes, their star players, meanwhile, was undesirable to Howe. In early spring, however, there had been an expectation that someone may exercise the latter’s £100m release clause before it expired last month, which, although unwelcome, would have significantly aided Newcastle’s PSR position.
Despite their predicament, Newcastle did not manage to get sales lined up early and, as time ticked on, Minteh became viewed as an increasingly pragmatic option.
Following his impressive loan at Feyenoord, there was significant interest and, with first-team opportunities likely to be limited given Howe’s desire to sign a right-winger this summer, a substantial profit on the £6.5m Newcastle paid Odense a year ago looked achievable.
At one stage, Minteh appeared Everton-bound.
A fee in excess of £30m was proposed but, given their own well-documented past PSR issues, Everton needed Newcastle to buy someone in return. Advanced discussions were held regarding Calvert-Lewin, a Newcastle target since 2022, and a price agreed. When talks collapsed over a failure to reach personal terms, as Newcastle tried to stay within their strict wage structure, both deals fell through.
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Although Everton maintained a keen watching brief, they could not afford Minteh — especially not once a £40m package was agreed with Lyon, which became Newcastle’s benchmark valuation. John Textor, Lyon’s majority owner, was directly involved in negotiations and the Ligue 1 club wanted to conclude a deal despite bemusement as to how they could afford it.
Heading into the final 10 days of June, some inside Newcastle believed they had a first sale sorted.
Minteh, however, was not keen.
The 19-year-old knew Newcastle had Premier League interest — and he had agreed personal terms with an unidentified club — and wanted to stay on Tyneside or head elsewhere in England. For around a week, Newcastle aggressively attempted to convince Minteh to move to Lyon. It was suggested to him he could find himself training with Newcastle’s Under-21s if he did not leave, though the club have denied that this was a threat to make him move, more an outlining of the reality.
On holiday in Gambia, Minteh was happy to wait rather than feel forced into the transfer.
By now, Newcastle’s quandary was an open secret, with wild speculation about the size of their shortfall being anywhere between £30m and £100m. That led Chelsea to test their desperation by enquiring about Isak.
Howe simply would not stomach losing the striker and Newcastle would not have even countenanced an offer unless it was well above £100m. Remaining amortisation costs and the 10 per cent sell-on clause owed to Real Sociedad mean any deal would have to be astronomical, but the club did everything in their power to avoid losing Isak regardless.
Chelsea even offered players in return, but Newcastle scrambled to find an alternative.
That Gordon was even considered as a prospective sale, however momentarily, highlights how seriously Newcastle were taking their situation.
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Liverpool had made a previous, tentative enquiry and Newcastle — who are seeking a right-sided centre-half — proposed a deal that would have seen Quansah, the 21-year-old defender, move to Tyneside. That was dismissed as a non-starter at Anfield and the transfer did not progress.
Despite Gordon’s involvement with England, his future remained uncertain heading into the weekend and some inside Newcastle hold fears his head may already have been turned by a prospective return to Merseyside. Howe will hope that is not the case given he was Newcastle’s talisman throughout 2023-24.
Unsavoury decisions had to be contemplated for financial, not footballing, reasons.
Throughout the week, a series of transfer meetings were held and other ideas were proposed.
Beyond a star leaving, a solitary sale was never going to generate enough — and the most PSR-friendly transfers involve academy products because they represent pure profit for accounting purposes.
Although Longstaff is into the final year of his deal, Anderson was more attractive to potential suitors. An exit for the 21-year-old may have been more seriously explored in January but for injury, despite how highly he is rated internally.
Ironically, although Howe sought a midfielder in January during an injury crisis, it is an area in which he is now well stocked. Joelinton has subsequently signed an extension, there is optimism Guimaraes may stay, and Tonali can return from August 29.
Just as Almiron’s potential exit was viewed as the lesser of several evils in January, Anderson’s was this time.
While Newcastle had a player-plus-cash offer involving Anderson for Kilman rejected by Wolves earlier in June, Brighton and Forest both asked about Anderson’s availability when they were approached by the Tyneside club.
During discussions with Forest, the possibility of Elanga swapping clubs with Anderson — and, initially, Minteh as well — featured prominently. The Sweden international has long been scouted by Newcastle and they are seeking a right-winger, with Elanga able to play on both flanks.
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Talks went on throughout Saturday and, although Anderson was reluctant to leave his boyhood club, he realised the severity of the situation and travelled to the Midlands even before a deal was struck late that evening. Forest are paying more than £30m for Anderson, but they view it as a strong deal for a player they have long admired.
While concluding a deal over the weekend for Elanga proved too complicated, Forest are believed to have proposed several players in return. Vlachodimos, the 30-year-old Greece goalkeeper, was the one Newcastle chose.
And the Anderson deal was struck only hours after Newcastle finally reached a breakthrough with Minteh.
Everton had feared Minteh would end up at Brighton and, although discussions were held with Forest and Chelsea also expressed a willingness to explore a deal, it was the south-coast club who prised the Gambian from Tyneside. Newcastle belatedly accepted a fee north of £30m, having been forced to reduce their demands and having already rejected an approach for both Minteh and Anderson collectively.
Minteh flew back to the UK on Saturday evening for a medical on Sunday, leading Brighton to recruit a winger who scores well on their metrics and who they also tracked at Odense. Ashworth may not have brought in substantial sums from sales during his (active) tenure as Newcastle’s sporting director, but the profit made on the teenager he pushed to sign has greatly aided the club from whom he is estranged.
If those two transfers brought much-needed relief for Newcastle — and more than £60m — the club’s transfer committee explored on Sunday afternoon whether a third, 11th-hour sale was possible to dispel any lingering concerns about PSR compliance.
Wilson, Almiron and Trippier may all leave later this summer and the last two were at least mentioned as possible last-minute exits. With Trippier in action for England against Slovakia, a transfer appeared highly unlikely, but it was at least briefly floated.
Even when their wild rush to satisfy PSR seemed to have been successful, Newcastle were still not conclusively closed for business.
The borderline-crisis situation Newcastle found themselves in this June was nearly three years in the making.
From almost the moment the takeover was completed in October 2021, the level of expenditure required to survive in the Premier League and then realise the owners’ ambitions always felt incongruous in an environment governed by PSR.
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Saudi Arabia’s Public Investment Fund (PIF) may have untold theoretical wealth, but Newcastle’s 80 per cent owners cannot merely funnel in unlimited resources. As a senior staff member commented in January, “The ‘richest club in the world’ stuff has always been b***ocks”.
Under Mike Ashley, the Premier League’s financial fair play (FFP) regulations — which permit losses of up to £105m over a rolling three-year period — were never an issue given his parsimonious nature.
While that frugality, ironically, permitted the consortium significant headroom to invest, a gross outlay of around £415m during their first four windows was still beyond the (permitted) means of a club whose commercial revenue had flatlined for 14 years.
Compliance with PSR was achieved in 2022 and 2023, but those three-year rolling figures included seasons featuring Ashley-owned Newcastle accounts, with pre-tax losses of £22.5m (2019-20) and £13.7m (2020-21).
This June, for the first time, all three years feature post-takeover spending. Losses of £70.7m in 2021-22 and £73.4m in 2022-23, both club records, always pointed towards a potential issue this summer, even if a portion of that cumulative £144.1m does not count towards PSR.
If the financial shackles under which Newcastle have been constrained throughout 2024 have surprised some supporters, that is because the messaging that the club’s transfer business has been governed by PSR limitations had not appeared to play out in practice until January.
Every time a senior figure gave warnings about the effects of FFP — dating back to the 2022 summer window — another significant purchase seemed to follow. Isak arrived for a club-record £60m in August 2022, Gordon for £40m in January 2023 and Tonali for £55m last July.
Some supporters surmised that cautioning about PSR was merely a club ploy to plead poverty and reduce asking prices, but the reality was Newcastle kept stretching themselves. Eventually, it caught up with them.
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They have faced two primary problems, the first of which has been starting from such a low revenue base.
The club’s income increased 39 per cent year on year from 2022 to 2023, from £180m to £250.3m, but that is still dwarfed by the so-called “Big Six”. The growth has largely been generated by substantial commercial expansion, but sponsorship deals alone have not been enough to bridge the gap to expenditure.
Another issue has been a distinct lack of cash from player sales.
Aside from selling Allan Saint-Maximin and Chris Wood, Newcastle had failed to bring in money by moving players on. They recouped less than £50m, an eighth of what they spent on signings.
They have been hampered by a squad which features a hotchpotch of Ashley survivors with little-to-no value and key players whose departures would significantly harm the first XI. There have been few “saleable assets” able to command consequential fees who Newcastle could move on and, rather than countenance selling a prized player, they deferred the issue.
PSR has actually been a determining factor in Newcastle’s post-takeover transfer policy, but it became particularly restrictive by January — to the point of forcing inertia.
Determined since day one to avoid the scattergun splurges and disastrous consequences of Farhad Moshiri’s Everton, the initial 10-point deduction they received in November focused minds on Tyneside. They did not want to be hit with a sporting penalty of their own.
PSR became a paranoia inside St James’ Park. “It made everyone go, ‘Jesus Christ’,” that senior figure said in January. “That was a line-in-the-sand moment.”
Howe was desperate to sign a midfielder to augment his injury-ravaged squad and even loans were difficult, with Newcastle attempting to negotiate loans with obligations to buy so that they did not have to pay a fee that would count towards their 2023-24 accounts. That is how the Lewis Hall signing from Chelsea was structured in August, as Newcastle were already close to their threshold.
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The prevailing perception was Newcastle merely needed to sell to buy. Yet the reality was they needed to sell regardless.
Eales’ pronouncement that every player has a price in a PSR world led to a frenzy of players being linked with moves away, Wilson chief among them. Bayern Munich did make two bids for Trippier, but Howe did not want to lose his on-field captain despite having his successor in place in Tino Livramento.
Given the volume of injuries, Howe could not afford to allow fringe players to depart. But, in an attempt to secure funds, Almiron was the player Newcastle felt they could sacrifice and potentially receive decent value for.
Newcastle saw the Saudi Pro League as a market for sales. Discussions were held with Al Shabab for Almiron, but no concrete offer arrived.
Doubts were emerging over Ashworth’s future, as interest from Manchester United grew, but the sporting director was involved in the decision-making around PSR, the squad and Trippier.
The calls that were made in January, and Newcastle’s inability to raise funds, placed direct pressure on this summer when it came to ensuring compliance by June 30.
Somehow, some way, Newcastle hope they have averted a crisis.
Confirmation of whether Newcastle have avoided a sanction may not arrive until January, but surely a senior figure must outline what the exact situation is before then.
Although further exits will follow, for now, at least, the focus turns to incomings and Howe’s desire to sign a centre-back, right-winger, forward and another goalkeeper. With the 2021-22 accounts dropping off the three-year PSR period and lucrative sponsorships like the shirt agreement with Adidas bolstering Newcastle’s income, they should now have decent capacity to invest in their squad again.
Signings will help soothe supporters, but the shockwaves generated by Newcastle’s mad dash to satisfy PSR could reverberate for some time to come.
(Top photo: Alex Dodd – CameraSport via Getty Images)