Newcastle news: Rafa Benitez told he will have money to spend this summer but must change transfer policy

Newcastle bosses have told Rafa Benitez he will be handed significant funds to strengthen his squad if he relents and agrees to sign a new contract, with a figure of around £50million each year before player sales.

Benitez and Newcastle are involved in a stand-off with just four games to go this season and with the Spaniard’s contract due to expire at the end of June.

The club, who released accounts on Wednesday showing an operating profit of £17.6 million remain eager for an extension, but they have admitted there will be a change in recruitment policy, returning to looking for young, rising talent, which is not favoured by Benitez.

Benitez was terse at his pre-match press conference on Thursday, saying he could not comment on the future of Matt Ritchie if he did not know his own.

And the club released a statement which was similarly tight-lipped, saying: “We don't want to comment on speculation about the manager's future. We would prefer for conversations between Rafa and the club to remain between us.”

However Newcastle’s accounts showed a rise in turnover to £178.5million and a wage bill of £93.6 million. Operating costs are now at around £25 million and the excess of around £50 million each season has been promised to Benitez in talks about his future.

“Our accounts are pretty simple in terms of the main numbers,” admitted managing director Lee Charnley. “We've got turnover less our wage bill and other operating costs, broadly speaking gives us what we have to spend in a year. It's not difficult to do the maths, that's what we have to spend.

“In addition to that you then have the funds generated from player sales. We will also look to ring-fence a specific additional budget to spend on young development players that have the potential to be part of the first team in the future.

“Our view is, yes we accept there needs to be a balance and there are examples of this with some of the players we have brought in, but we are clear that we think for us to grow and move forward that our focus should be on young players that can come into the team and really improve us.

“That’s not to say that we wouldn’t do anything else but we feel that’s an area we as a football club should strengthen and must focus on.”

Benitez has also called for an overhaul of Newcastle’s training facilities. Charnley admitted new plans had been drawn up, but player signings would be given priority over the development.

“We are looking at a training ground building project that is potentially going to be between £15 million and £20 million,” he said. “If you were to ask me now, do I think we are best served spending it on a new training facility or spending £15million to £20million on improving the team, now, today in the short-term, I think that money is best spent on the team. In the future that is something we probably want to look at.

“We have also got a different build structure. What we have done now in terms of the plans we’ve got, we would do a modular build.

“In my experience, has a player turned round and said I’m not signing for Newcastle United because of your training facilities? No. Did it stop us getting promoted out of the Championship, did it stop us finishing tenth, did it stop us having a good season this season? No.”

Newcastle’s accounts also showed the repayment of a £33 million debt owed to owner Mike Ashley.

“It was very important to pay the money back,” said Charnley. “The intention was to pay him back before. I think, as a football club, living within its means, standing on its own two feet, being able to spend what it has and what it generates is incredibly important.

“We’ve given him that money back now so we’ve got, effectively, a clean slate and I think that’s a good place for the football club to be. The £111million he’s put in has been there for just over a decade now and the intention around that is he would only take that back in the event of the sale of the club.

“Are we planning, assuming Mike will still be the owner of this football club? The answer is yes, because we have to.”