[matt]

Just read the following in a daily email from The Times:

"I wonder what your opinion is on the transfer situation at Newcastle? Weren't we all expecting a fire sale when they got relegated? Yet, with a few exceptions, the squad is still in place. Is there really a transfer embargo? You mentioned last week you thought £8k a week were fair wages for a Championship footballer, but we know Newcastle have a number earning over 50k a week. Do you really expect this situation to continue into the season starts? Or do you think we will see a clearout to reduce the wage bill before the transfer window closes?"
Chris

GJ: The club has been put up for sale and Seymour Pierce, the advising company, has had expressions of interest. It had been hoped that a deal would have been concluded by now so a new manager could shape his squad. It's not clear what has caused the delay.

The owner has received some advice that he should trim the squad to reduce the overdraft, making the club more attractive to potential buyers, which makes sense. But several agents have hit a brick wall when they tried to negotiate the sale of their players out of the club. Alan Smith was to have talks with Wolves, but his agent was told that they did not want him to leave in case the club was bought by a billionaire who wanted the squad intact for an assault on the Championship. The possible sale of Sebastien Bassong has been stopped for a similar reason.

While it is understandable that the club want to keep their top players to attract prospective owners, it would have seemed in everyone's interest for players such as Smith to leave, not least because he is a high earner and could have an effect on the overdraft. The longer the takeover takes to conclude, the higher the overdraft might become and the shorter the time left for the manager to sign the players he wants for the season, which is two weeks away.

It's not clear whether the club can fund (by a loan or higher overdraft) the wage bill and cover the loss of income from relegation if they intend to carry the same squad into the season and there is no takeover.

Players in the second tier should be earning between £4,000-8,000 a week for a club to be financially sound, but of course the figures will depend on the size of the club's income. Newcastle will have a much higher than average income for a Championship team so the wages they can afford to pay will be higher. That said, they will suffer a drop in TV income next season of around £30m, even after the parachute payment, so the impact of Smith earning £3m a year and Duff on £4m etc will suddenly mount up.