Bringing North East Italy to North East England?

Bringing North East Italy to North East England?

Bringing North East Italy to North East England?

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By Amy Eustace

Eight months ago, the top six was nailed on. You could bet your house on the fact that the usual suspects – the Manchester clubs, Chelsea, Arsenal, Liverpool and Spurs – would all be up there, fighting it out in their customary gloves-off style. But you wouldn’t have wagered a penny on the prospect of Newcastle, of all clubs, throwing their hat into that ring. It would’ve been like betting on a 12-year-old to knock out Ali, or a three-legged horse to win at Cheltenham. They had lost a raft of regular players; including the brash but effective Barton, the reliable Nolan, the indispensible Enrique and…well, Andy Carroll. Their fabled return to the Premier League hadn’t exactly coincided with a return to the glory days.

Geordies were faced with a lean transfer window. A few presumed nobodies from France here, some lad that played for West Ham there; it didn’t make for pleasant viewing. Expectations had been lowered since their year in the throes of the Championship, sure, but in a desolate summer thoughts strayed to the likelihood of being back there again sooner rather than later. No one expected to see them chasing European qualification at this point in the season. If you HAD bet on it, you would probably be looking forward to a handy payoff in two months’ time.

The question is…how did they do it?

How, at a time when all and sundry are abandoning the purse strings, did Newcastle manage to do the opposite, and compete at a higher level? To put it rather plainly, their methodology closely resembles another black-and-white-striped team: Udinese. From the North East of England, to the North East of Italy, a radical – yet perfectly sensible – strategy has been translated.

Last year, Italy’s Udinese presented themselves as the poster boy for a transfer policy that was the antithesis of the overwhelming trend among prospective Champions League clubs; buying quality players for miniscule transfer fees and selling them on a few years later for a substantial profit. It was genius in its simplicity, and admirably ambitious. Though they were treading on fairly uncertain ground, they managed to pull it off with an impressive level of organisation and foresight. They claimed fourth place in Serie A on the last day of the season at home to juggernaut AC Milan, and all on a shoestring budget.

The similarities: Buy low, sell high

On closer inspection, Udinese’s unexpected rise is easily attributed to a remarkable ability to develop players and cash in when the time was right. Gokhan Inler, who moved from FC Zurich to the Italian club in 2007 for a paltry £900k, was sold on to Napoli in 2011 for £15.4m. Or consider Alexis Sanchez, who arrived in Udinese for a sum of £2.6m in 2006, only to be sold to high spending Barcelona for almost £23m last year. They also made a £7.5m profit on the value of Cristian Zapata, sold to Villarreal. All in all, they spent under £20m in last summer’s transfer window and recouped over £60m.

It’s hard to judge Newcastle in quite the same vein, when they haven’t really had the chance to profit on some of the value purchases they made under tight financial constraints last summer and in years previous, when relegation took its toll on the transfer kitty. Andy Carroll was their major money spinner last year, but that acumen – the crucial knowledge of when-to-sell - has not been obvious in the past. Memorably for all invested in the Toon, they learnt a hard lesson by splashing out on the exorbitant wages commanded by one Michael Owen, with unhappy results. Mike Ashley and co., for their flaws, have learned from that.  Nonetheless, letting Joey Barton and Kevin Nolan walk for free and selling Jose Enrique for a few hundred thousand pounds over his original price (moreover to a club who had shown a willingness to pay over the odds) was hardly in line with the philosophy set down by their Italian semi-counterparts.

But it’s the market value of some of Newcastle’s more recent signings that point to a more Udinese-esque approach.  The most obvious is Demba Ba, signed from West Ham on a free transfer, is worth £13m in today’s market, according to transfermarkt.com, whose figures are used throughout this comparison. His sixteen goals and three assists for Newcastle in 23 appearances this season make him the best example of value in Newcastle’s summer transfer dealings. Yohan Cabaye’s value has more than doubled thanks to a number of elegent midfield displays from the Frenchman.  Cheikh Tiote, bought in 2010 for £3m, could now command a transfer fee of £10m. It might be time to cash in on Fabricio Coloccini, too. While his value on resale has gone down – unsurprisingly, seeing as he’s now 30 – his ability and selling price are likely to decline further in the coming years. Plus, if the early signs since the January arrival of Papiss Cissé, they have another star striker and potential windfall heading their way in the not so distant future.

The last thing the venerable Toon Army want to see their team becoming is a selling club, an issue addressed in Kieron O’Connor’s (better known as @SwissRamble) latest blog, and it looks like they might already be, having recouped £86m from player sales over the past four years. We now live in a Financial Fair Play world, and having the books in order is worth ten Andy Carrolls (maybe more, let’s be honest here). In that respect, the outlook is good. They’ve shorn their wage bill - which is down almost £20m since it’s 2008 peak - without compromising on quality.

Newcastle this season are somewhat reminiscent of the Udinese of 2010/11. Though the Friulani had kept the best of their players – Sanchez, Di Natale, Inler et al – they had lost a handful of experienced squad players, such as Gaetano d’Agostino and Simone Pepe, who moved on co-ownership and loan deals to Fiorentina and Juventus respectively. Poised for another mid-table finish (at best), Udinese defied the odds to achieve qualification for the Champions League.

This year, having lost the experience of Nolan and Barton – and having looked dead in the water before the first kick of the season – Newcastle have rallied into contention, a mere 5 points off that coveted 4th spot.  Udinese are in a similar position – chasing one of only three Champions League spots in Italy – but only a point lies between them and 3rd placed Lazio.

Tapping untapped markets

Udinese’s approach is undoubtedly based on a more long term ideology. The rise and rise of players such as Alexis Sanchez was a lengthy process. Scouting networks in lesser explored South America countries are the key to support the sustainability of their buy low, sell high strategy.

European markets have been rapidly losing their value over the past number of years. Udinese’s novel approach was to look in the places everyone else wasn’t looking. In Switzerland, they found Gokhan Inler. In Slovenia, Samir Handanovic. They had plucked Sulley Muntari and Asamoah Gyan from Ghana before Portsmouth and Sunderland had heard of them. A strong scouting network in South America saw them unearth Chilean Alexis Sanchez, his compatriot Mauricio Isla, and Colombian talents such as Pablo Armero and Cristian Zapata, as well as exciting young players like Juan Cuadrado and Luis Muriel, who have impressed on loan at Lecce this season.

In a move resembling Manchester United’s arrangement with Royal Antwerp, Udinese have developed a symbiotic relationship with Granada, a Spanish side promoted last year to the top flight with the help of loanees from the Italian club.

Newcastle have nothing like Udinese’s Granada link, although it’s something other English clubs have been heeding, and they would do well to consider it. What they do have, however, is a penchant for tapping into largely unexploited but talent-rich leagues. Most notably, the low price acquisitions of Cabaye, Sylvain Marveaux and the 19 year old Mehdi Abeid from Ligue 1 – whose promise is only beginning to be noticed in this decade with the emergence of Paris Saint Germain as a powerhouse, and Eden Hazard as being, well, pretty damn good – have shown Newcastle’s willingness to eschew the expensive minefields of more highly rated leagues, especially its own. Only Demba Ba, Gabriel Obertan and third choice goalkeeper Rob Elliot were signed from English clubs last summer, for a combined fee of less than £4m.

The differences

Udinese’s rise and rise took time, and links in South America and with Granada were not forged overnight. A club with a revenue base like theirs would take light years to reach the Magpies’ current place in English football through player sales. But what Newcastle had that Udinese do not – and may not ever have – is a large, strong, and fanatical set of supporters. Udine’s Stadio Friuli is rarely even half full, even for big matches, but when was the last time St. James’ Park could ever be described as dead?

 As a consequence, Udinese didn’t have anything near the revenue stream of their nearest English equivalents. The Italians make six times more through their canny transfer market dealings than the amount they make from gate receipts. Even though Newcastle’s match day revenue has fallen since their relegation, it’s still almost seven times more than Udinese make from the same stream per annum. Therefore, Newcastle’s Udinese-lite method has worked in much the same way as the full fat system did for la Zebrette, and a great deal faster, probably because they had the foundations, and because they weren’t fully dependent on sales to fund buying.

So, what now?

For one thing, while the sacking of Chris Hughton was lamentable in that a good guy was apparently railroaded for the sake of big business, he’s now back to what he’s apparently best at – trying to get former Premier League sides out of the Championship – while Alan Pardew has apparently been taking lessons in not using the word ‘rape’ in a football context or generally being a twat, and seems to be the perfect man for the job. His signings have been astute, his tactics usually sound, and you can’t really argue with their position in the table. He has more than managed to disprove the sceptics. For that, he deserves plenty of credit.

If Newcastle continue the gradual fortifying – and occasional offload – that Udinese have perfected, but on the less dramatic scale that they have favoured, they could cement their place as Champions League challengers. Qualifying for a European competition would provide another substantial revenue boost, and an incentive for incoming players. They’ve made positive steps forward, like tying the highly rated Tim Krul to a long term contract extension, as well as Tioté and Coloccini. Should those three choose to go, they’ll go for far from cut-price, bargain-basement, last-year-of-contract sums.

They’ve emerged from their vicious ‘appoint poorly qualified ex-player/fail spectacularly’ cycle, and entered into a new, more prosperous circle of profit and reinvestment. It’s a tricky equilibrium to strike, but as long as no one gets ahead of themselves – I’m looking at you, Mr. Ashley – , the Geordies are in for a very efficient and equally exciting future.

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