Newcastle United transfer window and FFP – Being realistic, there is money to burn and still be prudent | OneFootball

One of many views on this Newcastle United transfer window.

The rumour mill is in full tilt. Some signings have been announced, some yet to be. Speculation is rife as the journos would have us with a squad of 50+ players. What is really likely?

As Eddie Howe has highlighted in several interviews, FFP, or the current system of profitability and sustainability, could be a huge constraint, so let’s try to make the accounting simple.

As with all Premier League clubs, a club can make a loss over three seasons of £105 million. Although last season’s accounts are yet to be published, NUFC accounts show an operating loss of £71.7 million, the previous season £13.7 million. Ostensibly there was only scope to make a loss of £20 million or so.

There are some mitigating factors that may give more flexibility than perceived.

Behind the scenes, allowances are made for the impact of Covid on club revenues, noting that during the pandemic, turnstile income was badly hit, as was catering. With the club having been taken over, some of the costs may be written off. In any event, infrastructure (stadium and training ground) costs increase the allowable loss, as does expenditure on women’s football and the academy. It would be foolish to speculate on accurate figures at this stage.

So what can we expect from the next accounts, looking at revenue and costs?

On the one hand, it has been widely noted that commercial income had not progressed under Ashley whilst his retail chains derived the benefit from free advertising. New commercial deals have come into place, reputedly worth several tens on millions so far. As for the costs, the new owners have invested significantly in the squad.

Given the various models of FFP or P&S from the Premier League and UEFA, it might help to think of increases in commercial income as the opportunity to pay higher wages. If front of shirt sponsorship deals are as reported, the wage bill can increase by £25 million plus, arguably more than enough to pay for at least four quality signings.

Instead of looking at the transfer fees to be paid, it can be helpful to break those down over the length of the contract. If the Tonali rumours are true, we should be accounting for him as costing £10 million per season.

Picking another example of Joelinton who cost around £40 million, or £10 million per season. Were he to extend his contract, his accounting cost per season will effectively halve over the duration of his new contract, affording extra expenditure on arrivals.

On the revenue side, Champions League qualification adds a huge bonus, reportedly at least £80 million in a year, more if either qualifying from the group stages or slipping into the Europa League.

It might seem outrageous but if all new signings were to be on a six year contract, that £80 million times six could conceivably allow signings worth £480 million, an average of a four year contract being £320 million.

The words of caution about getting over excited is that failure to qualify for the Champions League next season would mean that remedial action may have to be taken. We have witnessed the Everton mint being sucked dry. Spending should probably be tempered.

The next financial consideration concerns players on our books. We already have Chris Wood sold, showing an accounting profit, probably of £10 million. We may pick up some extra cash from the likes of Darlow, Lewis, Manquillo and Hayden, with a low book value and high profit margin. In order to make space in the squad, other may be sold, probably at an accounting profit.

So here is how the squad looks, accepting that there will be discussion over definitions of position:

Goalkeeper

Pope, Dubravka, ANOther

Right Back

Trippier, Ashby, Krafth, Manquillo

Left Back

Targett, Lewis, Dummett

Central Defence

Schar, Botman, Lascelles, Burn

Midfield

Bruno, Joelinton, Tonali, Longstaff, Willock

Wide Forwards

Almiron, Murphy, Gordon, ASM, Ritchie

Strikers

Wilson, Isak

That would give us a senior squad of 26, one over the maximum for the 25 man Premier League senior squad. For each incoming, we have to let someone go. Of course, those still classed as under 21s, such as Elliot Anderson, provide us with something of a bonus. Fortunately, we have plenty of “home grown” players in contention for a start.

ASM has been touted as one who could provide extra profit. Some other hard decisions relate to the likes of Almiron who might be argued to be close to his peak of speed and fitness, however, Linford Christie’s domestic 100 metres record, set when he was a 33 year old, has only now been broken 30 years later. Eddie Howe’s ruthless streak has yet to be revealed.

What about Krafth who was brilliant before his injury?

Although some domestic transfers have been formally registered, the window only really opens for international signings on 1st July when they can be officially registered. Ideally, domestic sales should be before then so that they can be included to reduce loss or increase profit in the current financial year.

There are some obvious areas to strength in what promises to be a long season.

Schar and Botman could perhaps do with more quality competition, allowing for Dan Burn who complicates the LB position, which looks weak without him. An extra midfielder would not go amiss, whether the Premier League experienced Maddison or the phenomenal Hungarian prospect, Szoboszlai. A personal preference is the latter, although it might challenge the Toon Army to come up with an appropriate song.

Even though Wilson and Isak had fantastic strike rates last season, the injury record suggests extra cover might be wise, whether it be a Bosman, Thuram, or another young prospect.

So, in summary, what can we expect?

The mainstream football media probably have it right over LB and midfield. Being realistic, there is money to burn and still be prudent. There will be difficult decisions, some sales may not be popular. However, it does not take much imagination to see an improvement both in quality and depth of the squad in this Newcastle United transfer window.

For now, let’s just trust the powers that be to surprise us with the ability to improve on what was a fantastic season last time around, with, as it stands any of 5five trophies possible; Premier League, FA Cup, League Cup, Champions League and/or even Europa League.