Newcastle United will be more “flexible” in January although recent cash injection not linked to transfers

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Football Finance Expert Kieran Maguire outlines what the recent injection of £35 million into Newcastle United from its owners is for, and discusses their potential January spending ability. Daniel Wales reports.

Transcript

00:00The finances of Newcastle United has become a regular topic revolving the

00:04club, with the recent cash injection the latest to create discussion amongst

00:09supporters. The sum of £35m in the modern transfer market is

00:14not a huge amount of money to spend, therefore is it more likely that the

00:18injection of cash is actually for another purpose at Newcastle United in

00:22terms of the general day-to-day running of the club on matters such as player

00:26wages and maintenance. This was certainly the view of football finance

00:32expert Kieran Maguire, who detailed the specifics as to what the money could be

00:37used for. I think it's almost certainly to assist Newcastle United in the

00:43day-to-day operations of the club. The club does have a significant wage bill,

00:48there will be some anniversary payments coming up in January in respect of

00:54players that were bought in previous winter windows, which have to be

00:59paid because most transfer payments are now an instalment. So I think those fans

01:03who are getting excited about a big money signing coming in January, that's

01:06probably misplaced. The biggest cost for any club tends to be payroll, and

01:11if you take a look at what's happened at Newcastle United, not only have they

01:16recruited some very expensive players in order to try to progress the club, and

01:21we saw that last season of course with being in the Champions League, Anthony

01:26Gordon signed a new contract, they're trying to keep their best players and

01:30they therefore have to pay market rates, so that will be the biggest cost. And

01:34then you've got your general day-to-day overheads in terms of running the back

01:38office, the maintenance of the stadium, the maintenance of the pitch and the

01:42training facilities. And so with the money likely not related to transfer

01:46activity, just how much money can Newcastle spend in January, and will PSR

01:52still be a factor that plagues them? Well under the current rules, a club is

01:57allowed to lose £105m over a rolling three-year period for PSR

02:03purposes. By all accounts, Newcastle were in a high risk of breaching that

02:10number by the end of last season, and the accounts are prepared for the 30th

02:15of June, so that's why we saw the sales of Minté and Anderson, both of which

02:19would have been on significant terms in terms of the profits. If you've got

02:25academy sales, that's pure profit for PSR, and then Minté had come in on a

02:29relatively low fee and then was sold to Brighton for I think slightly in

02:33excess of £30m. So that's actually given Newcastle more flexibility as

02:39far as the market was concerned, and remember even though those sales were at

02:42the end of summer 24, that's going to roll forward and assist the club over

02:47that three-year period. So they can spend money, but I think what the club is now

02:53moving towards is a scenario of spending smart rather than spending big.

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