Selling Yoane Wissa for anything under £37.5million would represent a loss for Newcastle United on the PSR front.
Indeed, Wissa has proven to be an awful signing for Newcastle United, scoring just three goals in 24 games following a £50million+ move from Brentford back in September.
While the knee injury he suffered before even kicking a ball for Newcastle must be taken into account, Wissa has been largely overlooked by Eddie Howe even after returning to full fitness.
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According to The Athletic, Newcastle are open to selling Wissa at a loss this summer.
It certainly looks as if the club will have to take a financial hit here, so Geordie Boot Boys spoke to football finance expert Adam Williams about what it could mean.
Newcastle have to sell Wissa for £37.5m to avoid PSR loss
The website asked Williams what selling Wissa at a loss would do for the club’s accounts ahead of a summer where they reportedly need to sell players anyway.
In fact, Williams highlighted that a sale for under £37.5million would represent a PSR loss.
Williams said: “There are quite a few unknowns here, the most significant being we can’t know how the market rates Wissa.
“But let’s start with what we do know from the reliable reporting that’s in the public domain. Wissa signed for £50m, rising to £55m. Given how his time at Newcastle has transpired, I think we can safely assume that most of those add-ons haven’t been realised.
“It has also been claimed that Brentford have a 25 per cent sell-on. However, we don’t know whether that is 25 per cent of the profit on a deal or whether it’s 25 per cent of the gross sale price.
“Without seeing the terms of the agreement between the two clubs we can’t say for certain. But given how we know Newcastle have operated in the past, I’d be fairly confident in saying that it’s a profit-based deal – and because Newcastle wouldn’t make a profit on the player, that won’t affect the money they recoup.”
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He added: “The dream scenario, one might initially think, is the Saudi Pro League come calling. Newcastle fans might be asking PIF to make some calls, but they haven’t operated like that in the transfer market so far. Even if they did, the value of any deal would be revised down under UEFA’s financial rules, while the Premier League would also assess it for fair market value.
“Wherever he goes, let’s say he’s sold for £30m and use that as our starting point. To work out the loss on the deal for PSR, SCR or FFP purposes, you have to subtract his unamortised book value from that sum. He signed for £50m on a four-year deal, so he’s got a value of £37.5m in Newcastle’s books. So if the sale price is £30m, Newcastle register a £7.5m loss on the deal for the purposes of their bottom line and the Premier League’s financial rules.
Though certainly painful, Williams also adds that selling this summer might not be all bad for Newcastle.
He goes on to say: “That said, Newcastle should have plenty of short-term headroom under the Premier League’s new SCR system, thanks primarily to the Alexander Isak sale. UEFA’s rules meanwhile aren’t going to be an issue next season because they won’t be in Europe.
“So I think if they really have no faith in Wissa working out, you may as well cut your losses, take the small FFP hit and save yourself probably the best part of £10million in wages. There’s an element of sunk cost fallacy in transfers: there’s no use in throwing good money after bad.”
Clearly, an awful lot depends on the fee. Getting £30million for a player who is almost 30 and has hardly performed for what feels like an age now may be a touch ambitious.
Of that potential outcome, Williams added: “If the sale is less than that – as looks likely – then the loss widens. If he’s sold for, say, £20m, the loss is £17.5m and so on.”
Wissa’s stance on leaving Newcastle
Interestingly, the report from The Athletic adds that Wissa wants to stay at Newcastle.
He will be less than one year into a four-year contract by the time the January transfer window opens, which is a concern for the club.
While it would be reasonable to expect an improvement next season should the striker stay, it’s difficult to imagine a scenario in which he will ever raise his value to close to what Newcastle paid for him given his age.
Finding a suitable buyer could be difficult, even if one bad season hardly outdoes the fine work he did while a Brentford player.
Wissa desperately wanted to join Newcastle, and it’s a shame that things have not worked out.
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