Magpies fans won’t want to hear it but they need to accept that in order to progress they have to become a trading club, says football finance expert
Selling Alexander Isak is a medium-term “silver bullet” for Newcastle United’s financial outlook, freeing them up to potentially spend up to £250m on new players in future transfer windows.
That is the view of finance experts who believe the club’s first big sale since their 2021 takeover opens up “huge possibilities” for the next three to four trading periods.
As the Magpies head into a four-day spell that feels defining for the owners, it feels as if a path is emerging where Newcastle, Isak and the striker’s suitors, Liverpool, can each emerge stronger from a saga that has hung over St James’ Park all summer.
For Liverpool – yet to offer a second bid and still mightily cagey about their intentions – the upside is obvious. Isak is an elite player. But for Newcastle it is about looking to the future.
What impact will Isak’s sale have on Newcastle’s PSR position?
Newcastle have agreed a £65m fee with Stuttgart for Nick Woltemade (Photo: Getty)
In a word, it is transformative, provided they are able to broker a deal anywhere near the £150m valuation that has been talked about.
“In the medium-term it is something of a silver bullet for Newcastle’s PSR issues,” Rob Wilson, a football finance expert and programme director at the University Campus of Football Business, tells The i Paper.
The i Paper understands that Newcastle’s business so far – including £65m record signing Nick Woltemade – is “net” of any issues concerning the Premier League’s profitability and sustainability rules (PSR).
Thanks to their parsimony last summer and in January, when they did not make a first-team signing, and they sold Miguel Almiron and Lloyd Kelly, they have been able to spend around £160m on new arrivals without the need to sell again.
Wilson explains that banking around £130m for Isak – minus the 10 per cent sell-on clause Real Sociedad have – would “top up” their PSR headroom by around £100m.
How many players could they sign if he is sold?
Head coach Eddie Howe desperately needs reinforcements in attack (Photo: Getty)
Due to the way the rules work – incoming signings are amortised over the length of their contracts – this gives Newcastle the capacity to make five £50m signings if they are penning five-year contracts.
“It would certainly be a game-changer,” Wilson says. “It gives them flexibility and headroom because any players they bring in are amortised over the length of their contracts.
“This isn’t a case of bringing in, say, £120m or £130m for Isak and then you can only spend the same amount. Your capacity to spend is increased over a number of years. We know because of their revenue levels it’s difficult to spend heavily at the moment but this does unlock that, to an extent.
“Newcastle fans won’t want to hear it but they need to accept that to progress they have to be a trading club for a few years – buy them cheap, sell them high.
“It might mean your prized assets go but the reality is you can buy three or four very good players for the value Isak brings in and it has a material impact on the future.”
What about potential Champions League implications?
Club chairman Yasir Al-Rumayyan has made no secret of his ambitions (Photo: Getty)
With Newcastle back in European competition they also have to adhere to Uefa rules which state your wages to revenue ratio is kept under 70 per cent.
That has been significant in some of their negotiations this summer, with Newcastle not able to match the sums being offered elsewhere.
It is another area where an Isak sale might make sense.
The i Paper can reveal that Woltemade’s contract at Stuttgart was €1.5m a year – which breaks down as just £27,000-a-week. Even allowing for what sources indicate is a four-fold rise now he is at Newcastle, it represents a huge saving on Isak if he leaves.
This stuff matters in a game now dominated by the bean counters. It will, for example, allow Newcastle to offer pay rises to Tino Livramento and even Sandro Tonali, both players that the Magpies are keen to keep.
Wilson says Newcastle now have to drive a hard bargain.
“They need to really hold firm on his price,” he adds.
“Whether it’s £150m or not, they need to get as close to that number as they possibly can.
“If they can secure £130m plus add ons, it feels like a good result for all parties and sets Newcastle up for quite some time, with the potential to spend in January and next summer.”
Does it make sense from a football perspective?
In Newcastle’s statement firing back at Isak’s Instagram missive last week they listed three conditions for his sale.
The first was price (and some at Liverpool still believe not signing attacking reinforcements is “likely” for this reason) but bringing in two replacements is just as important.
Woltemade feels like the Isak successor but there is a nagging feeling that they still need another striker to fulfil their ambitions.
Relying solely on a fairly inexperienced 23-year-old forward – albeit one with a potentially high ceiling – feels like a big risk.
“Nick has been outstanding, but only for the last half year,” says Carlos Ubina, Stuttgart correspondent for the Stuttgarter Zeitung.
“He had problems adapting to Stuttgart’s way of playing – they play dominant football, with a lot of possession.
“But in the end he got his chance and took it and he was absolutely superb from December and January onwards.”
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Newcastle are buying a project: a player who has worked tirelessly in the gym to make himself more powerful and adept at playing with his back to goal. Character checks have all been very positive, Woltemade is fluent in English and eager to learn.
And he has the raw materials. Nicknamed “Woltemessi” on account of his close control, he has also improved aerially and is viewed as hugely coachable.
“Is he ready right now? I can’t answer that but with his potential and his assets he will definitely be a success in the Premier League,” Ubina says.
Signing a second striker would enable Newcastle to construct an argument that they have navigated a very difficult situation skilfully. They retain a strong interest in Yoane Wissa but success there depends on Brentford bringing in their own replacement.
Jorgen Strand Larsen interest also endures but Wolverhampton Wanderers are adamant he is not for sale. The next few days could dictate the long-term future of the club.