The Newcastle Gamble - why Newcastle are planning to spend big despite the threat of relegation

  

Since the announcement of the takeover, there has been much lip service donated as to what the PIF would do to help Newcastle to escape the drop as Newcastle looked condemned with Newcastle delivering one abject display after another.  However, with the January window open, many are expecting Newcastle to spend heavily as years of underinvestment under Mike Ashley has magpies fielding one of the worst squads in the league (amplified by their recent FA Cup loss to mid table league one side Cambridge United.) 

Newcastle has their targets and already secured the services of Atletico Madrid right back Kieran Trippier but the problem is much of the work in this window may look uncoordinated as for Newcastle owners may have made a big mistake already before what is a pivotal transfer window.  

It's too early to judge Newcastle new owners but the major faux pas so far has been not hiring a sporting director well before the January window or at least before. There's been speculation and talks for who would fill the sporting director position with names like former Chelsea man mike Emenalo and Brighton’s highly rated technical director Dan Asworth linked to the role but no one as of yet has been hired. 

This leaves whoever in real pickle as they have to land presumably Howe’s desired targets as Newcastle are at once desperate for higher quality players and find themselves in a precarious position which means clubs and agents are licking their lips as they’re set charge a premium for their players and clients in the worse window to look for a player. 

There were reports that Newcastle transfer budget this window would only 50m which probably was an attempt to set market expectations but with the growing list of players linked with a move to St. James Park, the ploy clearly hasn’t worked.  

We’d be surprised if Newcastle weren’t forced to break their transfer record at least once in order to secure the new faces needed to keep what is one of the worst squads in the league at the highest level. 

Any confidence we have of Newcastle avoiding the drop lies not only on their new owner’s considerable resources but in the considerable talents of their new manager Eddie Howe. 

While his tenure at AFC Bournemouth ended with the south coast side tumbling into the championship, the longtime club servant left with his well-earned reputation as a young progressive coach intact after lifting the cherries from league one to the premier league then establishing the club as a force at the highest level for several years. 

Howe spent much of last summer linked to a number of jobs from Celtic to Everton with Celtic showing the strongest interest in the well-regarded coach.   It looked like howe was a lock for the Parkhead role but according to Howe, he turned down the role because he couldn’t get his staff so talks broke down. While we and Celtic fans everywhere find that hard to believe, Howe patience has led him to an opportunity to build a super club. However, there’s a small issue of keeping one of the most poorly developed squads in a league where they spend most weekends overmatched.  

With that said we have a lot of faith in Howe ability and so do some members of the club with Jonjo Shelvey and Callum Wilson singing his praises in the press citing the intensity of his training sessions and tactical nous.  

However, having players on your side is half the battle but winning the actual war is what counts as Howe is under extreme pressure to keep Newcastle up as the club plans to spend big this window to keep their premier league status. 

In sum, Newcastle maybe didn’t want to make a splash this window but with the squad recently falling to league one outfit Cambridge United, Newcastle’s owners must realize spending is critical if they plan to make their long-term investment a success. 

Atletico Madrid have been cratering and why we're not worried

  

To be sure, in past years Atletico Madrid has been a sure bet for our fund as the Roja Blanco has sustained robust threat to the Real/Barca duopoly for the best part of a decade but with a recent run of bad results, just as the football world celebrates the architect of that robust challenge, Diego Simeone, has some questioning whether the Argentinian is the man to take them forward. In our opinion Atletico would be crazy to oust the man responsible for much of the club’s recent to the point it’s hard to imagine Atletico without his presence 

Don’t get us wrong, there is much about Atletico Madrid we don’t like but overall, we’re pretty confident that the club can overcome its bad run of form and return into at least champions league qualification places. 

Of all the areas that concerns us about Atletico regarding our position is it’s financial condition. Football is tough business at the best of times but during the summer, the testy at best economics of the sport were laid bare when super league (of which the red and whites were a member) hastily announced fronted by Real Madrid’s president Florentino Perez citing the difficulty of making the sport viable during the pandemic.  

Thanks to the global backlash from football fans across the world (especially fans of clubs included in the league) who saw it for the misguided money grab it was, the founding members of the nascent super league was put to bed as all members of proposed league revoked their involvement. 

For all the hyperbole and anger that swirled around the proposal of the super league, what was noticeable was that one of the last teams to abandon the project were Spanish companies. The very large debts of both Real and Barca are well documented but the very large debts of Athletico Madrid have largely flown under the radar compared to their famous rivals with its debts reaching nearly a billion. 

The Covid-19 hit football like a sledgehammer and the effects of the pandemic still weighs heavily on the sport. Despite their debt, Atletico managed to make a small profit in 2020 despite its debt burden. While we’re not sure of the interest they pay on their long or short-term debt or how much cash the club has meet its obligations, the moves the club has taken shows the club is taking steps to ease issues that could its ability to operate in the marketplace.  

Owing to the effect covid had to the club finances, Atletico Madrid business during the summer was relatively quiet with the addition of striker Matteus Cunha and midfielder Rodrigo de Paul the only recruits of note. The midseason window could see the departure of a number of players with report of the club anticipating the loss Kieran tripper who’s looking for a return to England with newly minted Newcastle and Chelsea frontrunners to secure his services. Atletico would like to keep the Englishman but look resigned to losing him to suitors looking to take him off their hands. In response to the highly likely loss of tripper, Atletico are looking to replace the former Tottenham man with Chelsea’s Cesar Azpilicueta but have to compete with Barcelona who are seen as most likely to secure his signature. 

However, Atletico look set to lose their record signing Joao Felix who’s looking for a move away from the Vicente Calderon after clashing with his manager Diego Simeone. To be honest, we were highly skeptical of the club splashing out so heavily on a player that frankly doesn’t fit in the style of play or culture Simeone has spent a decade instilling at the club and the clash between the Felix and Simeone seemed predestined from our point of view. 

We doubt Atletico making a decision on moving Felix in this window considering there’s only a handful of clubs that can handle his wages and all of them are director competitors so the club’s only option is to either explore a short-term loan maybe to clubs already out of UCL contention like BVB Dortmund or a return back to Portugal. 

In any case, we trust Atletico to make the right moves in this market as they've proven again and again to be shrewd operators. A lot of credit has to go to Athletico sporting director Andrea Berta who has key a key role in Atletico’s sustained success during the last decade as they’ve lost players to competitors and father time over the years and yet managed to stay competitive. With the success Atletico has had over the last decade despite a high degree of squad turnover, it should be no surprise Berta has had big clubs like AS Roma and Manchester looking to whisk the Italian away from the Vicente Calderon. 

With both Berta and Simeone in place, we have a great deal of faith in Atletico Madrid weathering its recent dip in form. But almost of the credit for Athletico success over the last decade has to go arguably the club's greatest coach Diego Simeone.       

With Athletico’s form cratering, there was murmurs around the Vicente Calderon that the Argentinian’s robust style is limiting the team and maybe it was time to “El cholo” to go and find someone else to take the club forward. To us those murmurs are insane given what the Simeone has accomplished at the club with two La Liga titles two UCL finals appearances and two Europa league wins on his resume. What's odd is this run of form coincided with a celebration of the 10 years Simeone has spent at the club making them perennial contenders every year with considerably less resources than the Real/Barca duopoly. 

What even more weird similar rumblings in season’s past (including last year's title run) were made in the same period, after a champion's league run. Looking at the team in context, we could see the club was still recovering from the effects of scrapping their way out of an unexpectedly tough group at the last. Add to that the demanding fitness regime under Simeone employs to get everything he can out of his players, a drop in form was on the cards. While weren’t expecting them to drop off the pace this drastically, we certainly expect them to pick the pace through January-march period then hit their stride during the run in. 

 Though we generally like teams that employ a more progressive style of play. We're also of the opinion that   there more than one way to skin a cat. Simeone has often been accused of being too rigid yet when he experiments and tries a change in shape, he’s also accused of watering down the formula that brought him so much success.  

Our guess is there’s expectations of teams to play a certain and that expectation has a very high premium in Spain. Perhaps Simeone’s success in using old school methods of hard work, organization and discipline setting up shop with a 4-4-2 no less has shown the football world what can be done when a team excels off the ball well as on it. 

However, the only real risk we see surrounding Simeone is the high demands he puts on players which has seen great players not last the year at the club. The club looks set to lose its record signing Joao Felix and there have been public spats with players notably with Luis Suarez and in each case the naturally combative Simeone has been unapologetic which to us is refreshing as it is a red (maybe amber/yellow) flag as his abrasive style could put some stars off. However, not too many fit into the hard driving culture Simeone has built at the club and the ones that embrace it almost universally shine. 

 

In sum, Atletico have been in a downward slump but were highly confident the Roja Blanco won’t be off the pace for long.