The journalist explained that due to the way transfers are accounted for, there is far greater scope for them to spend in the transfer market.
What’s the latest transfer news involving Newcastle?
Following the club’s takeover by a Saudi-lead consortium earlier this month, Newcastle’s potential in the transfer market has become a major talking point.
In addition to links with some massive names, such as Napoli’s Kalidou Koulibaly and Juventus star Aaron Ramsey, it has been claimed that Newcastle could spend £190m in January without breaching Financial Fair Play regulations.
However, The Athletic’s Waugh believes that Newcastle would actually be able to spend well in excess of £200m on transfer fees because of the way spending is accounted for.
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What has Chris Waugh said about Newcastle’s spending?
Speaking to GIVEMESPORT, Waugh explained that a transfer fee is divided over the duration of the player’s contract, so depending on the specific agreements reached with each signing, the potential is there to spend far more than £200m.
The Athletic journalist told GMS: “That £200m is not just £200m net in terms of transfers. It doesn’t include the fact that if you sign a player for £40m on a five-year contract, in accounting terms that is essentially £8m a year and so this basically means they can spend well in excess of £200m in terms of set transfer fees – but really, the way it would be accounted for in FFP would be £200m. So they have a lot of room for growth.”
Who could Newcastle sign in the near future?
That’s incredibly tough to predict but with so many rumours doing the rounds, it’s important not to get carried away.
As things stand, Newcastle are locked in a relegation battle, so even with huge salaries potentially on offer, it’s unlikely any superstars will turn up at St. James’ Park in January.
At the same time, FFP will need to be a long-term consideration for the club, which ultimately means bearing in mind the resale value of any potential additions. Newcastle are unlikely to eventually recoup much of their initial investment on older players like Koulibaly or Ramsey, who are both 30.
Equally, the Toon need be wary of setting an unhealthy precedent. If they overspend on their first few signings, clubs will not only expect inflated fees from them going forward, but they could also skew the entire Premier League transfer market.