Newcastle are planning “one or two” moves in January

Two words dominate NewcastleHis transfer thinking turns into a schemer January transfer window: ambition and realism.

Insiders anticipate that “one or two” receipts – at most – are up for grabs the club’s ambitions in a New Year that will again be affected by the looming threat of balancing the books in the era of profit and sustainability rules (PSR).

Newcastle fans might not like to hear his mantra repeated last 18 months but the reality is that the club expect to have to make additional sales to generate PSR cap space in 2025.

There will be some benefits failing to sign Marc Guehi in the summer, a deal that would have maximized Newcastle’s spending power and made departures inevitable in the next two transfer windows.

Guehi was seen as an exceptional prospect who was keen on a move to St James’ Park, hence the pursuit throughout the summer. But ultimately, it was a transfer deal that precipitated a rethink toward a more strategic, long-term approach that may take time to bear fruit.

If that’s the realism part, here’s the part that should please Newcastle supporters looking for proof that the club still has hope of a top-four finish.

Their mission in the next two transfer windows is players who can “move the dial” in the words of one recruitment director.

If the summer was more about replenishing the team (Lloyd Kelly, Will Osula and Odysseus Vlachodimos arrived to raise the level of extras), the club aims to transform itself into adding players who can immediately challenge the starting XI, while taking advantage of the untapped potential in emerging markets such as France’s Ligue 2.

That and reported back in OctoberBrentford’s Bryan Mbeumo is one of those dream targets, a right winger with serious credentials to improve. But it feels like it will be a tough, almost impossible task to remove him in January.

The boxes Newcastle intend to tick next are: ambitious targets – possibly full internationals already – who are of the right age with potential for improvement.

And then the big one: alignment from director of football Paul Mitchellwho wants to move to targeting more overseas talent with manager Eddie Howe, whose the stock has increased with majority owners PIF both for the way it managed summer tension in the hierarchy and the recent revival in the field.

Mitchell told a fan event in Newcastle this week that his relationship with Howe was good and that backs up what insiders are saying about a developing “professional” partnership that has put any initial tensions behind them.

Little tangible progress has yet been made and Howe says January is “unpredictable” for the club.

“I know nobody wants to hear it, but January is always a difficult window, so I don’t think we should necessarily go into it expecting anything different than any previous January,” he said.

Newcastle have held early initial meetings – the data and prospects team have been engaged in identifying players, both first team and development prospects – but Newcastle’s direction for the month does not yet appear fully formed. That should change in the next few weeks.

So do Newcastle have the ability to spend in January?

First, the good news: there’s no PSR iceberg waiting for Newcastle this summer. This dire prospect – coupled with a general market slowdown – has left the Magpies unable to consolidate in January 2024.

Despite deep-pocketed owners appreciating the need for reinforcements amid an injury crisis, even a loan deal for Manchester City’s Kalvin Phillips has proved beyond Newcastle.

It’s different this year. They are not starting the month on the back foot, but there is an acknowledgment that any major investment in January would likely bring the need for sales to balance the PSR book in the summer.

So the calculation they will have to make in the New Year is whether the player is worth it, to the extent that further sales are needed to offset the threat of breaking the rules.

Club insiders feel those opportunities may present themselves. Cash-strapped Lyon’s Rayan Cherki has been tracked by Newcastle, while Lilla striker Jonathan David is another close to expiring contract who is prized by the Magpies, who have not been particularly impressive of late agile or reactive in the market.

Had Newcastle signed Guehi for Crystal Palace’s asking price, they would have been in a much more difficult position. That’s why they left then, even if that decision caused consternation in the fan base.

The hope is that it will benefit them in the long term from a PSR perspective, by also putting the selling clubs on notice that they will not be paying the ‘Newcastle tax’.

Newcastle need to sell?

Yes and no. Insiders are assured that there is no PSR violation to contend with, so the pressure is off.

But if they want to make serious progress in the coming seasons, they will have to improve at trading players. That, quite simply, is a big part of why Mitchell was named director of football with a mission to turn things around from a recruiting perspective.

But it’s complicated. While last summer Bruno Guimaraes felt the most likely to leave with a £100m release clause setting the terms for potential suitors, and now understands that selling the Brazil international would make little sense from PSR’s perspective if the price was around £70m. Agent fees and associated costs would affect profit margins.

The club also does not want to sell Alexander Isak, even if there are initial discussions over a new contract were put on the shelf. Other options may be considered.

What is the PSR situation?

Still tight, but with possible wiggle room.

Football financial expert Kieran Maguire said and last month Newcastle could have the ability to spend up to £100m between now and June 2025. These figures are based on the depreciation of player contracts: a £50m signing on a five-year contract counts as £10m for PSR calculations.

“Sales of Minteh and Anderson go into the pot and they are both very profitable from a PSR perspective, so it gives the club some space,” he said.

Newcastle have always advised that it is less than that. Another point to consider: The Magpies are one of the few clubs keeping an eye on the machinations around Related Party Transactions (APT).

Although few believe it will be a huge game changer, if the rules are relaxed it paves the way for significantly improved commercial dealings with PIF-related entities which would ease Newcastle’s PSR position considerably.