Given how much he has developed at Nottingham Forest, Newcastle may well regret letting Elliot Anderson go, but their hopes of signing him again may be unrealistic.
Just last summer, Newcastle sold Anderson to Forest for around £35m in an attempt to appease PSR troubles at the club.
Since then, he’s become one of the most technically-adept, exciting young midfielders in the Premier League and has now broken into the England setup.
Manchester United want Anderson now, and may well beat Newcastle to his signature. But, if the Magpies did win that particular transfer race, it would hit them very hard financially anyway.
- READ MORE: Anthony Elanga’s Elliot Anderson admission will fascinate Newcastle as return rumours swirl
Why Newcastle United sold Elliot Anderson in the first place
In a Geordie Boot Boys exclusive, we spoke to our resident finance expert Adam Williams about why Anderson was sold in the first place and how that deal helped both Newcastle and Nottingham Forest survive PSR punishments.
He said: “Anderson joined Forest for £35m, with Odysseas Vlachodimos going the other way for around £20m. Because both of those deals went through before 30 June 2024, when the PSR window rolls over to the next year, those two deals were accounted for in 2023-24.
“Anderson was an academy graduate. Anderson was a ‘pure profit’ sale. So minus amortised agents’ fees, which will have been very minimal, all of that £35m went to Newcastle’s bottom line in 2023-24. By contrast, incoming transfers are accounted for over the course of their contract. Vlachodimos signed for £20m and signed a four-year deal, so only £5m hit the bottom line in 2023-24. That’s amortisation.”
The Anderson deal was essential then, in many ways, but it’s certainly one they’ll wish they didn’t have to make. Obviously, it’s worked out well for Anderson, who has seen his career soar since leaving, but financially, it was a naive move for the Magpies.
Williams added: “It meant that the Vlachodimos-Anderson quasi-swap deal helped Newcastle and Forest both boost their bottom lines that season. It’s a short-term workaround for PSR.
“It’s not a free hit, however. You still need to cover the remaining amortisation of both players over their contract lengths. So whichever way you look at it, Newcastle have effectively sold Anderson for £15m, because they have got nothing out of Vlachodimos. They’ve had to pay his wages, remember.”
Elliot Anderson return does not make financial sense for Newcastle United
It’s thought Elliot Anderson could now cost up to £100m as Forest try to cling onto their top player. While Man Utd look like favourites, it’s also suspected Anderson would like to go back to Newcastle. But, does a deal even make sense?
Williams said: “In terms of coming back to the club, if Forest stand firm on their reported valuation of Anderson, he’ll cost Newcastle – or anyone else who comes after him – around £100m. Instinctively, I think they’d probably come down. Let’s say £80m.
“If Newcastle pay £80m for him and sign him to a five year deal, that’s £16m of amortisation per year. Plus, whatever his wage is. You’d anticipate £100,000-a-week at the very least if he’s going for £80-100m. So that’s about £6m extra in annual costs when you add in National Insurance and whatnot. So in total, it’s £22m.”
There’s no denying Anderson is now an elite midfielder, and someone any club would be desperate to sign. But, due to the nature of his initial departure from Newcastle, any attempt to bring him back would set the Magpies back significantly in terms of PSR.
Williams explains this, adding: “At the moment, the £35m profit that they made on the Anderson deal is still relevant to PSR because the three-year PSR assessment window is currently 2023-24, 2024-25 and 2025-26. But that’s not the case after the end of this season.
“If they signed him in January, his impact to the bottom line would be £11m. So there’s just no way of looking at this from a positive angle. Ultimately, if they think he’s the best-value-for-money signing they can make, then there’s no point in not doing the deal out of a sense of pride or anxiety about how it will be perceived through a PSR lens. But it would be a pretty bizarre situation.
“They’re going to be okay for this PSR cycle regardless. They only lost £11m in 2023-24, partly because of the Anderson deal, and they have Champions League money and the profit on the Isak sale this season. They’ll be fine next season too, probably. But it’s maybe not the best look.
“If not selling Anderson had seem them breach PSR in the three-year window up to the end of 2023-24, would the punishment have been worse than losing £50-70m on the best academy player to come through the ranks in recent years? Almost certainly not. If they had their time again, they might simply choose to take the hit.”
- READ MORE: The secret reason Anthony Gordon will be desperate for Elliot Anderson to rejoin Newcastle United
Eddie Howe discusses Elliot Anderson sale
Fans may be dreaming of Elliot Anderson’s return to Tyneside, but Eddie Howe has a realistic stance on the matter, admitting Newcastle are unlikely to splash the cash in January at least.
Indeed, from his past comments on the matter, it would seem he isn’t sure the Magpies can ever bring Anderson back.
Reflecting on the deal, Howe said: “It certainly was a rushed deal. We were on the clock and trying to explore every avenue to find another way to avoid a points deduction.
“In terms of buyback clauses, we were not in a good bargaining position at all. So our strength to negotiate those sort of things was non-existent.”
With the player keen to sign, there is always a chance, of course. But, the logistics and finer details of any potential deal all point to Newcastle struggling to get this one over the line, however appealing it may be.
Receive a digest of our best Newcastle content each week direct to your mailbox
