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Transfers
Newcastle ‘could spend £100m’ on new signings amid Marc Guehi latest
Newcastle United’s pursuit of Crystal Palace defender Marc Guehi has been one of the defining sags of the transfer window so far – and it will not fizzle out any time soon.
Guehi’s stock is high after an excellent campaign in 2023-24, plus a series of standout performances for England during their run to the final of Euro 2024.
With less than two weeks to go until the transfer cut-off, Newcastle have seen several bids for Guehi rejected.
The last offer, which was reported to be worth around £60m, was still short of Palace‘s £65m-plus-£5m-in-add-ons appraisal of the 24-year-old.
Complicating matters, Chelsea are also believed to have included a chunky sell-on clause in the deal that took Guehi from Stamford Bridge to Selhurst Park in 2021.
What’s more, Liverpool are now also said to be pondering a late-window bid for Guehi.
All that is to say, the Magpies’ hopes of prising Guehi from an obstinate Palace side when they have one eye on their Profit and Sustainability Rules (PSR) situation are waning.
However, one expert has now given Newcastle some hope that there could in fact be a late flourish of spending in the remaining weeks of the window.
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Newcastle United can spend £100m this summer and not breach PSR, says expert
Newcastle only narrowly avoided a PSR breach in the monitoring period up until 30 June.
That was partly thanks to a creative, quasi-swap deal with Nottingham Forest involving Elliott Anderson and Odysseas Vlachodimos that saw Newcastle book a profit on the transaction.
CEO Darren Eales has, however, said Newcastle will always spend the maximum allowable under the Premier League’s £105m, three-year loss limit.
Without seeing Newcastle’s unreleased accounts for 2023-24 or knowing how they will fare in 2024-25, it is impossible to say exactly what that upper limit is for the current three-year period.
However, as quoted by recently, Liverpool University football finance lecturer Kieran Maguire has suggested Newcastle have plenty of wriggle room – in the immediate future at least.
“Newcastle can probably spend another £100m in the rest of this transfer window and remain compliant without the need for another fire sale,” he said.
Why? Because of the way paid fees are amortised by up to five years over the course of a player’s contract.
Essentially, if Newcastle spend £70m upfront on Guehi, their amortisation (and their PSR calculation) would only increase by £14m in 2024-25.
How would £70m Guehi signing affect Newcastle’s PSR position in the long-term?
Unfortunately for Newcastle, the £14m amortisation charge they would book on Guehi’s acquisition this year is not a free hit.
They would still need to cover the remainder of his cost in the subsequent four years, when they may well be just as close to the bone in terms of PSR as they are in 2024-25.
Newcastle’s amortisation in 2021-22, the last year for which financial data is available, was £87m.
That is almost three times as high as it was in 2021, and the figure will have risen again by the time their 2023-24 accounts are released.
The nature of the ownership regime at St James’ Park means they will always push the very limit of PSR, but a huge outlay in the short term could damage them when they zoom out on the graph.