Chelsea are reportedly wanting a sum of £80m to part with Senegalese striker Nicolas Jackson
Chelsea striker Nicolas Jackson
Nicolas Jackson could still leave Chelsea this summer(Image: AP Photo/Petr David Josek)
Nine days out from Newcastle United’s Premier League curtain-raiser for the 2025/26 campaign and the club finds itself unsure of who will be the leading man in attack.
Alexander Isak, the Magpies’ talismanic Swedish forward, has been the subject of interest from rivals Liverpool, with the club having rejected their initial £110m plus add-ons for the 25-year-old striker last week. The anticipation is that the Premier League champions will return.
Newcastle boss Eddie Howe has been candid about what Isak must do to reintegrate himself after reporting for training having been absent from the Asia pre-season tour and been training alone at former club Real Sociedad.
Isak and his representatives are still understood to be agitating for a move, but if Newcastle do not feel appropriately compensated for one of the world’s best strikers right now then they are under no obligation to just cut a deal at less than they think he is worth.
The move for RB Leipzig forward Benjamin Sesko ended up in frustrating failure for the Magpies, with Manchester United being the destination of choice for the in-demand 22-year-old Slovenian front man, one of the most prodigious young talents in Europe right now.
Newcastle know that the clock is ticking in order to try and get in an elite player with a high ceiling for growth so that they can not leave themselves short on quality when the season begins on August 16 away to Aston Villa. With Isak yet to be integrated into training again it remains to be seen whether he is the player entrusted with the task of leading the line against Villa.
After missing out on Sesko despite two bids to Leipzig and what was reported as encouragement from the player’s camp, Newcastle have now pivoted to other targets, with Chelsea forward Nicolas Jackson a reported target.
Chelsea are open to a sale, with the summer additions of Joao Pedro and Liam Delap for a £90m outlay creating some doubt over the long-term future of the Senegalese at Stamford Bridge. But Chelsea, who have no need to sell in order to meet any PSR restrictions, with the hefty profit in 2023/24 from selling the women’s team to themselves for near £200m effectively ending their PSR concerns, are in a position of strength.
Chelsea will know that Newcastle may already be approaching any Jackson deal with the mindset that they could be spending Isak money, although Liverpool’s stance has been one of the offer remaining on the table but not increased. That stance, privately, is likely to be open to some movement. Chelsea will also likely think they have a more desperate buyer that who would be willing to pay more to get a deal done.
Newcastle don’t have more in the queue for Isak. The reason being is that there are a handful of teams in European football that can afford to sign him, and with others such as Manchester City and Real Madrid not at the table for his services, the Magpies run the risk of losing value on him next summer, with Liverpool unlikely to return.
A project in Saudi Arabia has seemingly been rejected by the Isak camp from the outset, and with the player keen on the Liverpool move, Newcastle’s next moves for for a forward player, if it is to be Jackson, will have a knock-on effect for what happens for the Swedish international, who will want to be playing and performing during a World Cup year, especially given his compatriot Viktor Gyokeres has made his own big summer move with a higher profile.
But what would the situation around profit and sustainability rules (PSR) look like for Newcastle in the event of a Jackson signing and an Isak exit?
Reports have claimed Chelsea want as much as £80m for Jackson. That seems on the high side, but with the market having seen players unproven in England such as Hugo Ekitike arrive at Liverpool for a deal worth up to £80m, they will have some confidence in that stance.
A guaranteed fee of around £70m may make more sense. Assuming that guaranteed sum for Jackson, and £120m guaranteed for Isak, none of them including potential add-ons, then Newcastle would have plenty of headroom to address other areas in the squad for a campaign in the Champions League where quality squad depth is key to fight on both domestic and international fronts.
After signing winger Anthony Elanga from Nottingham Forest for a guaranteed £52m, a sum that could rise to £55m including add-ons, an outlay on Jackson at £70m would take summer spending to around £122m, with some £27m coming back into the club through the sale of Lloyd Kelly to Juventus for pure profit due to him having no book value after joining on a free transfer from Bournemouth last summer, and Sean Longstaff’s £12m exit to Leeds United, another pure profit move.
With amortisation capped at five years, a guaranteed outlay of £122m would come in at £24.4m per year in terms of how those fees would be accounted for.
Were Isak to move for a guaranteed £120m then that would represent a big profit, although the club do have to consider that his former club Real Sociedad will be entitled to 10% of profit on any sale over and above the €70m (£60m) he was signed for. So a £120m sale would see Sociedad receive £6m.
Isak was signed by Newcastle from Sociedad in 2022 for a £60m sum on a six-year deal. That was done before the Premier League and UEFA capped amortisation of fees at five years, regardless of contract length.
Amortisation is the accounting method used to put transfers through the books, with a guaranteed sum divided over the life of a player’s contract. So a £50m fee over five years would be £10m per year in amortisation costs. That figure decreases year on year, reducing what is known as the player’s book value. In order to reach a profit on a player, a club must sell them for over and above their remaining book value.
In the case of Isak, his annual amortisation costs are £10m per year, and of his initial cost, £30m has disappeared from his book value, meaning that he has a remaining £30m from now until 2028, when his Newcastle deal expires.
That means that any deal over £30m is when Newcastle start to see profit on the books that makes for meaningful headroom when it comes to PSR. Selling him for £120m would represent a £90m accounting profit on a player for three years of service given the already accounted for reduction in his book value.
That is money that can be accounted for as profit immediately, as opposed to when signing players the cost of acquisition from an accounting standpoint can be spread over five years. It also would provide Newcastle with an injection of cash that they will need to cashflow future deals to meet instalment payments. In today’s market, if a club can stump up more cash from the outset instead of kicking the can down the road, they have better leverage when it comes to negotiating a good deal.
The lack of urgency to player trade before June 30, the end of Newcastle’s financial year, should be instructive. They didn’t need to sell the women’s team or other club assets to themselves, and they head into the 2025/26 financial period in a much stronger position.
In 2021/22 the club lost £73m. That figure dropped off the assessment period for the latest PSR three-year cycle, which will take into account the £72m loss in 2022/23, the £11m loss in 2023/24 and whatever was posted in 2024/25. Estimates from football finance expert Swiss Ramble predict that the Magpies, assuming allowable deductions of £22m for 2024/25 against the £105m allowed losses over three years, would mean that the club could lose £84m and still be compliant.
They won’t lose that much, not even close, having had one eye on the coming 2025/26 campaign knowing a solid financial performance would set them up to be able to participate in the transfer market in a more meaningful way.
Now into 2025/26, the £72m will drop off the three-year assessment period for Newcastle, meaning the £11m loss from 2023/24, whatever is posted for 2024/25 and the results for 2025/26, a season where the club expects far higher revenues thanks to the Champions League and improved commercial activity, will form the three-year cycle. That provides the club with headroom that they have not had before under the ownership of the PIF.
For example, were the club to post the same losses as they did in 2023/24 for 2024/25, which was £11m, then the club’s PSR headroom, assuming the same allowable deductions applied for depreciation, infrastructure investment, the youth team, women’s team and community initiatives, which stood at £22m, then the club would be net PSR positive for the season to the tune of £11m.
Looking at the bigger picture, now in a three-year cycle with allowable deductions for 2025/26 assumed at the same level, that would give Newcastle an allowable loss for the current financial year of £149m and still being compliant. When you factor in adding £14m in amortisation from Jackson and making £90m accounting profit on Isak (if sold at £120m), minus deductions of the sell-on clause for Sociedad, then they would have huge room to manoeuvre for several windows.
The figures for 2024/25 are just for context, of course, and while a loss may be coming it won’t be much higher, if at all, from the one suffered in 2023/24 thanks to a stronger season on the pitch and improved commercial deals.
2025/26 is a financial year where, even conservatively, when factoring in additional matchdays Newcastle will earn £60m plus from the Champions League even without qualifying for the knockout phase. Aston Villa’s run to the quarter finals earned them over £90m last season.
Newcastle will earn more than the rise in amortisation costs, not to mention that the book value of some big additions such as Isak and Sandro Tonali will drop by a year. In the case of those two that sees £24m drop off amortised costs.
The wage bill will rise, that is par for the course when investing in new talent, and they want to extend Isak’s deal to head off interest from others. But Newcastle know that if they can find a way to achieve Arsenal’s route to a stronger financial position through repeated qualification for the Champions League then they can meet the costs and then some, and the headroom gets bigger each season, with bigger commercial deals as a result due to the fair market value being raised by virtue of being regular competitors on the biggest stage in European football.
Newcastle can do more this summer, and they likely will because it increases the chances of competitive success. But they will know that their chances of competitive success are lessened without Isak, meaning that getting in someone who can take the baton in a meaningful way is of paramount importance.