This week on the Magpies' Nest Newcastle United Podcast, Daniel welcomes Chris Waugh of The Athletic to the podcast, to chat about Newcastle's PSR concerns that led to the selling of Yankuba Minteh and Elliot Anderson, and the subsequent appointment of Paul Mitchell as the club's new Sporting Director.
Plus! The pair discuss whether Anthony Gordon was really swayed by the Liverpool interest.
Plus! The pair discuss whether Anthony Gordon was really swayed by the Liverpool interest.
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00:00Hello and welcome back to the Magpies Nest Newcastle United podcast. We are back for
00:17a new season of following and chatting about Newcastle United and all their endeavours.
00:23In this episode, I've been chatting to Chris Woff of The Athletic about the PSR issues
00:29that Newcastle had a couple of weeks ago and then the appointment of Paul Mitchell
00:34as Sporting Director.
00:40So Chris, Newcastle United of course over the weekend had a bit of a situation, PSR
00:48in terms of their PSR situation. They had to sell Ian Kubiminta, they had to sell Elliot
00:53Anderson and at the very end they also did an agreement with Manchester United to get
00:58rid of Dan Ashworth. If we go back just a week or two before this, did they know they
01:03were in quite a bit of a hole for some time?
01:08Well internally they did, but I don't think that what they did actually well was to keep
01:12it away from maybe the public knowledge of just maybe how much of a hole they were in.
01:18I mean, it came to Saturday morning and they didn't actually have any deals agreed at that
01:24stage or less than 48 hours before the end of the window and Newcastle still needed to
01:28bridge somewhere between £50m and £60m in terms of a PSR black hole. I mean, they
01:32were close to an Ashworth agreement by that stage, but that was only a portion of it.
01:36So yes, internally they did recognise the situation they'd been in and it became a late
01:41scramble but that wasn't necessarily for a lack of trying. Decisions were made in terms
01:45of you could look back to January and Kieran Trippier wasn't sold when maybe he could have
01:49been and obviously Newcastle's expenditure over the previous three years, knowing that
01:54they were operating within the PSR structure that is there. But at the same time, when
01:59some fans may point towards other players who they wonder why Newcastle have not sold
02:04or did not try and sell, it wasn't for a lack of trying, but you also have to recognise
02:10that there's a reason why they would want to offload certain players and in a sporting
02:15world where more and more sporting directors of the clubs want the same players, ideally
02:20of 25 years and under and also for a reasonable fee, which would actually pacify Newcastle's
02:28PSR shortfall, they couldn't do any of the deals for maybe the senior players or the
02:33fringe players who also have amortisation costs in their contracts as well. Someone
02:39who may have signed two years ago would still have three or four years remaining in terms
02:43of amortisation costs and that would then lessen whatever value Newcastle would bring
02:47in. So that's a long way of saying that, yes, Newcastle did recognise the position
02:51they were in, but their determination not to lose one of the big players, even if at
02:57certain points, maybe that came fleetingly close to having to consider it, their determination
03:01not to do that meant that it came right down to the wire for them to be able to do the
03:05deals that they eventually did do, which in hindsight, I think actually looks like reasonable
03:09business, even if Ian Cooperman does a very exciting prospect and nobody really wanted
03:14to lose Elliot Anderson at the same time, it's a player who never made a first team
03:17appearance for Newcastle and somebody else who was probably going to be fifth or sixth
03:21choice to be in midfield next season.
03:24Now some fans, of course, when the news started to break of the situation in Castlereagh and
03:28were trying to get rid of players such as those, I think a lot of fans on Twitter at
03:33least or social media thought, you know, this is a club who's trying to be ambitious, trying
03:38to build themselves up. And so how have they let themselves get into this situation? You
03:42mentioned January there where Kieran Trippier could have perhaps been sorted by Munich,
03:46but was there some mismanagement, do you think, going on? And perhaps could it have been better
03:51handled in the weeks leading up to this?
03:54I think that Newcastle, the message coming out is that lessons do need to be learned.
03:59Now, as I say, nobody wanted this situation necessarily to unfold, but Newcastle haven't
04:03had an active sporting director until today, since mid-February, because Dan Ashworth has
04:10been on gardening leave. So that was far from ideal in that sense. Even if they've
04:14had a structure in place, which they are confident in, a sporting director is heavily involved
04:19in decisions like that. And the reality of the situation is that Newcastle have been
04:24very ambitious in their growth. And this was the first year where three post-takeover seasons
04:29were added into that three-year rolling calculation for PSR. And so Newcastle had the problem
04:33of in that first window, they spent heavily because they had to try and avoid relegation.
04:38But then some of those players weren't necessarily the next elite level that Newcastle then
04:42wanted to move on to when they survived. So then they had to spend again. And part of
04:47the problem has been they haven't sold well enough until the weekend. They'd only really
04:50recouped money for Chris Wood, who actually they lost money on the deal in terms of year
04:56on year, and also Alan Sat-Maximan, who the profit on wasn't huge. So Newcastle weren't
05:00bringing in enough money from player sales. Their commercial revenues have increased substantially,
05:05but they're still dwarfed in terms of overall income compared to the so-called big six.
05:10So they had a lot of barriers put in front of them, including Premier League regulations
05:14being tightened around associated party transactions, which meant that Newcastle, any sponsorship
05:18deal they had was going to be scrutinized more heavily than maybe it had been previously.
05:23So they have had a lot of factors work against them. But I also think that part of the problem
05:29has just been that, yes, they've deferred decisions until the very last minute. And
05:34in the end, the ends possibly justify what happened previously. But I think the optics
05:39of the situation, certainly last week, and maybe also the sort of lingering doubts as
05:43to what happens now, and particularly maybe the Anthony Gordon situation and the suggestions
05:47that fears that his head may be turned. That is certainly a situation that Newcastle would
05:52rather avoid it because they didn't actually want to lose Anthony Gordon. It was just at
05:55the very height of the crisis, maybe last week, when they had to possibly consider every
06:00single avenue as to how they could get themselves out of this hole, because they were staring
06:04at a potential double-digit points deduction.
06:08I think on that as well, on the deduction side, now, of course, you could argue if they'd
06:12perhaps recouped some of the money that they were in the hole with, would they perhaps
06:16have considered maybe just taking maybe a single digit, maybe like a four or five-point
06:22deduction, whereas if it was double figures, 10 points, you know, that can ruin a season
06:27essentially.
06:28Well, the thing with the suggested points deduction is that Newcastle wouldn't have
06:32known exactly what the points deduction may have been. It's just that they feared that
06:35sort of level. So I can't say for certain whether if it had been a smaller deficit that
06:39maybe would have accepted that, but that that desire to make sure that they were compliant
06:44as Darren Eales, the CEO had said in January, they always would be, I think trumped all
06:49of that.
06:50They didn't want to have any sort of points deduction because they know how much pressure
06:53that would have put on Eddie Howe and the players going into the new season when obviously
06:57European football is desired, if not champions league football, I might be ambitious, but
07:01that is sort of where they want to get back to.
07:03And so, no, I think that as much as some supporters may be like, oh, we should just spend more
07:09because then we could just take a points deduction, but at least we improve the first team.
07:12That wasn't the mindset inside Newcastle United and they left it to the very 11th hour before
07:19they actually got it sorted.
07:20But in the end, they did get it sorted, but there's a sort of resolution inside the club
07:26not to let themselves get into this sort of situation again, despite all the factors maybe
07:29working against them.
07:30They also recognise that it can't be allowed to be left this late again.
07:45You mentioned, of course, Anthony Gordon, and he's one of the, let's be honest, the
07:48big three at Newcastle at the moment alongside Alexander Isaac and Bruno Kimaraes.
07:53Now obviously the worst talks of perhaps him being swayed by Liverpool, no one perhaps
07:59is quite understanding of how the situation developed, whether it was Newcastle, whether
08:04it was Liverpool.
08:05I mean, obviously you might have a better understanding, but what is the situation there
08:08right now?
08:09Because that sort of seems, even though Newcastle got out of the situation they were in, that
08:13seems as if it was a bit of a nasty side to it that no one at the club really wanted.
08:18No, and that was to say it was at the height of the desperation that was even, and it was
08:22very, very fleetingly considered, and it was mainly because Liverpool have a sort of long-term
08:26admiration for Anthony Gordon.
08:28There'd been a sort of very tentative sort of arm's-length approach a few weeks ago,
08:34and Newcastle sort of almost re-engaged with them and sort of just to see if any of the
08:37numbers sort of might add up if they became in such a dire situation.
08:41The numbers were never going to add up.
08:42The players for Newcastle wanted Gerald Kwanzaa, Liverpool never wanted to swap him anyway,
08:46but the least short-term side effect of that has been that Anthony Gordon, his boyhood
08:52club is Liverpool.
08:53He may have played for Everton, obviously from Merseyside, and some people around him
08:57seem keen for that deal to happen and keep talking about it potentially being live.
09:01Newcastle don't see it that way now.
09:02Newcastle have no interest in selling Anthony Gordon now that the PSR window has passed.
09:08Liverpool didn't get anywhere close to matching what would have been the sort of high valuation
09:12of him or what would have made it worth their while PSR-wise, because again, Newcastle have
09:16amortisation costs and also there's a few clauses in the deal as well, but it's got
09:20to this stage now where Newcastle are adamant he will stay, and I'm sure Eddie Howe, who
09:25he has a very good relationship with, will put his arm around him when he returns from
09:29England, Judy, and Newcastle are confident that that can reassure him and get him back
09:33on track.
09:34But it has been at least partly unsettling over this short period of time, and that is
09:38far from ideal, but Newcastle don't want to lose any of those big three.
09:42Bruno Gameraes' release clause has now expired, and in theory that gives Newcastle greater
09:48control over his future, but at the same time, if someone makes a sizable offer and Bruno
09:54Gameraes, his head is turned, then that situation could change as well.
09:57But Newcastle don't believe that Bruno would push to leave at this stage, they had feared
10:02maybe a few months ago that someone might exercise his clause, that didn't happen, and
10:05so they're hopeful that they can keep him around.
10:07And Alexander Isak, despite Chelsea maybe making the sort of most tentative of inquiries
10:14during the fallout from the PSR situation, Newcastle had no intention of selling him,
10:19they have no desire to sell Alexander Isak, it would take an absolutely astronomical offer
10:23well in excess of double the £60m club record fee Newcastle paid for him in 2022 for Newcastle
10:30to even consider that.
10:31And so as far as they're concerned, it's now building from the squad that they have, senior
10:36players or ageing players or squad players, some more will leave during the remainder
10:40of the window, but Newcastle don't want to lose any of their big players.
10:54And that brings me neatly on to this question, because where do Newcastle go from here now?
10:57Because PSR is a thing of the past, at least for this summer, they can now look at spending
11:03and developing the squad ahead of the new season, given the sales they have just made
11:07as well, what sort of spending power will they have going into the actual transfer window
11:11and who are the targets?
11:14I mean, ironically, regardless of what had happened before July 1st, Newcastle would
11:20have had capacity to spend going into it, because this is the final year in theory
11:25of the current PSR regulations.
11:27And so this is the final three-year period, the 2021-22 season, when Newcastle made a
11:32substantial loss in excess of £70m, was always going to drop off.
11:37That was the first post-takeover season.
11:38So that is no longer considered, that's when Newcastle spent nearly £100m in the January
11:42window of 2022.
11:44And so Newcastle were going to have capacity to spend there anyway, but they've also managed
11:48to bring in funds, which helps with their calculation, the PSR calculation over the
11:53entire three years, not just over the three years that they've just had, the new rolling
11:57figures as well.
11:58They also have the Adidas shirt manufacturing deal coming onto their accounts this year.
12:04So that gives them greater capacity to spend.
12:06Their revenue is also greatly increased from the 2021-22 season as well, given their commercial
12:11deals and they hope to expand that going forward.
12:13So that's a long way of saying Newcastle do have, in theory, greater capacity to spend.
12:18Now, whatever they do spend, regardless of the PSR rules changing going forward, that
12:22still could have an effect longer term in terms of what Newcastle can do.
12:26So they still have to have and bear that in mind, but they do believe they have decent
12:31capacity to be able to materially strengthen their first-team squad and the first XI itself.
12:37They want a right winger that's been a target long-term, and they believe they can bring
12:42someone in who's going to improve that area, probably walk straight into the first team
12:46and that lifts the level of the squad, because then whoever drops out of the team comes in
12:49behind them.
12:50They need another centre-back, given the injuries they've got there, and they desire long-term
12:53to have that anyway, a long-term successor really to Fabian Scheer.
12:58Forwards-wise, if Callum Wilson goes, another forward may arrive.
13:01That's sort of up in the air as to what exactly will happen there.
13:05But other positions could be strengthened as well, and Newcastle have not really got
13:08anything off the table in terms of what they would consider if they see a deal which they
13:12think is worth their while financially and which can materially strengthen the squad,
13:15they will look to do it.
13:16So as fraught as the last couple of weeks have been, theoretically going forward, now
13:21that Newcastle have Paul Mitchell as a sporting director in place as well, hopefully they
13:25can have a positive final two months of the summer window.
13:27That brings me on to the last question, of course, a question I wasn't expecting to ask
13:32probably about half an hour ago this morning, Elisa, which was about Paul Mitchell, of course.
13:36A new sporting director appointed, a bit out of the blue I think for most people in the
13:41media circling Newcastle.
13:44Obviously he had turned them down a couple of months ago when Dan Ashworth had just been
13:47placed on gardening leave, but now Newcastle have managed to get what seemingly is one
13:52of their big targets for the replacement of Dan Ashworth.
13:55Yes, they'd had Dougie Freedman turn them down from Crystal Palace, but they've got
13:58Paul Mitchell, who was at Monaco, he's been at Southampton, Tottenham.
14:02And so seemingly, I mean, obviously as I say, we'll find out more as the weeks and months
14:06progress, but for now, at least on the surface, it seems like a pretty good appointment.
14:12Yeah, Newcastle are delighted with this deal, as you say, Paul Mitchell was under consideration
14:18early on and seemingly he seemed to distance himself a little bit from the early stages
14:22of the negotiations for whatever reason, I don't know exactly why, but Newcastle then
14:28went for Dougie Freedman, Johannes Spoors of 7-7-7 group has also reached the final
14:32two, but seemingly, for whatever reason, Newcastle didn't seem convinced by him and didn't bring
14:36him in.
14:37Before Dan Ashworth left last week, before that was confirmed, it seemed like a situation
14:43that was just dragging on, and this has taken us by surprise, I think it's taken just about
14:46everyone by surprise, but it is a positive appointment, Newcastle wanted, rather than
14:50Dan Ashworth, who is very much seen as someone who, I mean, he describes himself, it's always
14:55going to be cliché, as the sort of centre of the wheel and all the spokes coming off
14:58the wheel and that connects all the departments.
15:01What you have with Paul Mitchell is he will do some of that, but he is also a bit more
15:04of a recruitment specialist, that's where his focus has been, really, since he's retired
15:10from playing, he's worked at MK Don, Southampton, Spoors, very close to Mitchell Pochettino,
15:16he's then been at RB Leipzig, the Red Bull group and also Monaco, so he's very experienced
15:21across Europe, he's got a lot of very good contacts and Newcastle want someone who will
15:25help them even more in recruitment, I mean, the recruitment post-takeover, I'd say, for
15:28the most part has been very, very good, but Newcastle maybe are behind other clubs when
15:33it comes to sort of data recruitment and the like, and so I'm sure Paul Mitchell's
15:37remit will be to improve all of that, and now he's in place with still two months of
15:41the window remaining, that can only be a positive as long as he, Eddie Howe and Andy Howe, who's
15:47the Assistant Head of Recruitment, and Steve Nixon, the Head of Recruitment, are all largely
15:51aligned in terms of what Newcastle's plans will be going forward, that's something they
15:54need to quickly establish, I have no doubt that they will, and then, yeah, Newcastle
15:58will believe that they can have a positive remaining two months of the window.
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