The news last night that Newcastle United had offered Sammy Ameobi a new contract provoked an angry reaction from a number of Newcastle fans.

The supporters casting doubt on whether Shola’s younger brother if good enough to be part of the team/squad, plus slagging off the club for their stupidity in wanting to keep Sammy Ameobi at St. James’ Park.

However, all of them are missing the point.

The only reason Newcastle United have offered Sammy Ameobi a new deal is purely down to Mike Ashley’s favourite subject….cash.

If the club hadn’t made an offer to the winger before his contract ended on 30 June 2015, then they would be guaranteed to get nothing.

However, by making an offer (if you read the club’s official statement properly, you will see it says they have offered Ameobi a new deal, but there’s no reference at all to whether he has any intention of signing it), it means that Newcastle United will be due compensation if Sammy Ameobi knocks back the offer and walks away to sign for another club.

Sammy turned 23 on 1 May 2015 and as such, comes under the rules governing players under the age of 24 who move when out of contract (despite being offered a new deal), with their former club entitled to compensation.

Where a player under the age of 24, has been offered a new contract by his club and he rejects that offer in order to take up the opportunity to sign for another club, compensation will be payable.

Usually, clubs will reach agreement on a compensation fee but when the two clubs’ valuations differ, the matter will be settled through an arbitration process.

That process is operated by the Professional Football Compensation Committee (PFCC). The PFCC comprises of an independent Chairman, plus appointees from The Football League and Premier League (as appropriate), an appointee of The Professional Footballers’ Association and an appointee of the League Managers’ Association.

The PFCC hearings ask each club to provide evidence to support their valuation of the player in question. In making its judgment the committee will take into account the costs of both clubs in operating a Football Academy or Centre of Excellence, as well as the age and playing record of the player, the length of time he was registered with his original club, the terms offered by both clubs, the status of the two clubs, the interest shown by other clubs in acquiring the registration of the player and any amounts paid by the original club to acquire the player in the first place.

In deciding on a compensation figure, it is not uncommon for the PFCC to set fees that increase as the player becomes more established at first team level.

It is quite usual for clubs to receive a basic compensation fee with further payments becoming due on the player’s debut, following a certain numbers of first-team appearances and after international appearances. It is also usual for there to be a sell-on fee should the player be sold at a profit at any point in the future.

An example is Aaron Creswell who made around 70 appearances for Tranmere Rovers and then when aged 21 in 2011, rejected a new contract, instead signing for Championship club Ipswich Town.

The PFCC decision:

Ipswich Town should pay Tranmere Rovers initial compensation of £240,000.

An additional £45,000 when Cresswell made 15, 30, 45 and 60 appearances for Ipswich Town.

An additional £100,000 if Ipswich Town got promotion to the Premier League in the next 3 seasons.

Tranmere Rovers to also receive 20% of any profit made by Ipswich Town in selling the player to another club at any point in the future. That of course happened with Cresswell’s move to West Ham last summer for an initial fee of £3.75m which could rise to around £7m, potentially giving Tranmere close to another £1.5m.

My money will definitely be on Sammy Ameobi moving on, as I think the contract offered by Mike Ashley will definitely ‘encourage’ the player to think a move elsewhere will be the best for him, as well as allowing Mike Ashley to pocket some more cash.

With 67 first team appearances (including as a sub) for Newcastle, including 54 in the Premier League (plus 9 in the Championship on loan at Middlesbrough), any compensation set by a tribunal would likely be a tidy sum. Especially when this season just gone, Sammy Ameobi has made 25 Premier League appearances, plus another 2 in the cups.

NUFC Signed Prints -