As things stand, the deal offered by Manchester City to sign Kalvin Phillips on loan for the rest of the season is off because it is not good for Newcastle United.
That's the view in St James' Park. After weeks of talks, Newcastle's hierarchy believe signing Phillips does not make financial sense. Not on the terms currently available to them. The borrowing costs are too high and the rumors about a purchase obligation in the summer do not sit well with them either.
That doesn't mean the deal is dead or that talks can't resume, but it needs to be revived and City haven't budged yet.
There is some hope that this will change as we get closer to the deadline, but it is impossible to say with any degree of confidence that Phillips will be a Newcastle player before the end of the window.
Newcastle were initially encouraged to believe that a deal with City for Phillips would be easy to complete this month. The England international had openly spoken during the international break in November about his desire to leave as he is not getting enough playing time under Pep Guardiola.
The City manager, in turn, had admitted he could not find a place for the 28-year-old in his first-team plans. The perception was that City would help Phillips find a suitable club to ensure he played more regularly, and Phillips was keen on the idea of moving to Newcastle.
Crucially, however, Phillips has not agitated to leave and City have been able to meet their demands to release him on loan for a fee of £7 million.
That's a huge sum of money to sign a player for just five months, and Newcastle, limited by profit and sustainability rules, won't pay such a high amount for a loan player.
They also do not want to commit £40m of their summer budget if there is an obligation to buy, especially as they already have to pay £28m to Chelsea to convert Lewis Hall's loan deal into a long-term deal. June.
The story continues
It has created the conditions for a deadlock and Newcastle are frustrated by the lack of flexibility in City's position.
In turn, City are confident they can find another club willing to pay the money - despite having already deterred Italian giants Juventus - they want this month.
Newcastle will return for Phillips if there is a change in the situation and remain "active in the market" if the right player becomes available, but sources have painted a bleak picture of their recruitment plans.
Meanwhile, Newcastle midfielder Issac Hayden is in talks to join Championship club Preston North End after aborting a move to Standard Liege in Belgium.
Signing no one is risky, but Newcastle refuse to be hollowed out
Newcastle United are in danger of sinking this season through disappointment and frustration as they continue to hold back on new signings this month.
Kalvin Phillips was expected to be an easy deal for Newcastle with the England international set to make the move from Manchester City early in the window.
With supporters clamoring for new signings to strengthen a side that has been plagued by long-term injuries for months, January would be the time when reinforcements would arrive.
However, the trust that initially fueled their interest in Phillips has disappeared.
'Nothing in the market makes financial sense for Newcastle'
In fact, there is no confidence that Newcastle will sign anyone. As grim as it may sound to supporters desperate for help, they may find themselves unable to add players even if they go out on loan.
There is nothing on the market at the moment that makes sense for them in the medium to long term and they would rather wait until the summer to improve a side that is looking woefully unable to finish in the top six again this season.
Injuries have crippled Newcastle - 11 players were missing against Manchester City last weekend, while their big-money signing Sandro Tonali was also suspended until August. Eddie Howe manages it with one hand tied behind his back. He's been that way for weeks.
Howe has nothing on his bench to change the game. No midfielders and only 34-year-old winger Matt Ritchie as cover for the attacking players. It's been a repeating story since early December, when Newcastle's slump began.
For 60 minutes Newcastle pose a threat, but as the starting XI tire they can no longer hurt teams offensively and become vulnerable defensively. Without new legs to revive them in the middle of the pitch or at the top, Newcastle's fatigue is being exploited. It's also becoming a self-fulfilling prophecy. Newcastle and their fans are conditioned to expect late pain in games and that's why it keeps happening.
Howe's side have not scored a result-defining goal, winner or equalizer after the 64th minute all season, but have conceded in 10 games in all competitions. Their goal difference in the first 70 minutes is +13, but after two late goals against Manchester City it is -4 in the last twenty.
It creates tension. Any manager in Howe's position would love signings. It is he who is judged solely on results and Newcastle have lost four Premier League games in a row and won two of their last ten games in all competitions.
The thought of no signings being made is sobering and begs the question: have Newcastle effectively written this season off as an ineffective one? The injuries are too bad and too deep to be a success. They have to take it on the chin.
'Club can put its affairs in order in the summer'
Their recruitment team will be able to put things right in the summer when their purchasing power will be greater, boosted by revenue from this season's Champions League, as well as the new shirt sponsorship deal with Sela and the lucrative manufacturing partnership with Adidas.
They need to stick to the plan and not panic in January when there is no more value in the market. It's a risky strategy, but you can understand it.
The price they will likely have to pay is that European qualification could be out of their reach this season. Newcastle has dropped to 10th in the rankings. Howe's side are just three points behind seventh-placed Manchester United and five points behind sixth-placed West Ham.
This season is definitely not over yet. Newcastle remain within striking distance and their fixture list will be a lot simpler on paper after they travel to Aston Villa at the end of this month.
There is a sense of calm at boardroom level. Howe's job is not threatened. They believe that their January position is the correct one because of their long-term approach. But it's always dangerous to let things slide in football.
'Howe has the tools to finish the season strong'
The thought process is this; Injured players will return in early February and as their injury problems subside, Howe will have the resources to finish the campaign strongly.
They are also in the fourth round of the FA Cup, where they will face Fulham at Craven Cottage in just under a fortnight.
But players like Joe Willock, who has barely played since May, and Harvey Barnes, who has been injured since September, will need time to get up to speed. They could easily develop further problems after being injured for so long due to complex tendon and foot problems.
And what happens if Newcastle suffer more injuries in the meantime? Playmaker Bruno Guimaraes struggled with a tight hamstring against City and is also only one yellow card away from a two-match suspension.
At the moment, Newcastle would have to play a defender, Fabian Schar or Lewis Hall, in midfield if they lose another player in that part of the pitch.
Striker Callum Wilson returns from his latest niggle in time for the game against Villa, but he continues to break down and turns 32 next month.
Newcastle really should sign someone this month and are still looking for someone suitable on the market. Actually obtaining it turns out to be a lot more difficult. The market is sluggish, they can only hope that the situation eases late in the period. But most Premier League rivals are hoping the same.
