Manager Rafa Benitez will leave Newcastle United next week, the Premier League club announced on Monday after failing to agree terms on a new contract.
"It is with disappointment that we announce manager Rafael Benitez will leave Newcastle United upon the expiry of his contract on 30th June 2019," the club said in a statement.
"We have worked hard to extend Rafa’s contract over a significant period of time, however it has not been - and will not be - possible to reach an agreement with Rafa and his representatives.
Benitez's coaching staff, including Paco de Miguel Moreno, Antonio Gomez Perez and Mikel Antia, will also leave the club.
"We would also like to thank our supporters, players and staff for their patience during a period of uncertainty. The process to appoint a successor will now begin," the club added.
Benitez, who has previously managed Valencia, Liverpool, Inter Milan, Chelsea, Real Madrid and Napoli, has reportedly been offered a contract worth £12 million-a-year (Dh56.2m) at Chinese club Dalian Yifang.
Despite failing to keep Newcastle in the top flight shortly after taking over in March 2016, the Spaniard earned hero status on Tyneside as he led Newcastle back to the Premier League at the first time of asking. He then comfortably secured survival by finishing 10th and 13th in the last two seasons.
However, he did not hide his displeasure at the lack of backing he was afforded by owner Mike Ashley and was believed to be seeking assurances over the budget he would have to work with before committing his future to the club.
"I have been trying to win titles everywhere, in different countries, and we have to have a team that can compete," Benitez, 59, told Sky Sports in April. "The city, the club, everyone in Newcastle is supporting the team so it's massive.
"I'm not saying £200m but doing a little bit more, doing the right things, we can compete against the teams that are now maybe between seventh and 12th. But we have to do things right."
Ashley, a British retail tycoon, bought Newcastle in 2007. But he has been a deeply unpopular figure among fans, largely due to a lack of investment in the playing squad that has seen the club relegated twice during his reign in charge.
The signing of Miguel Almiron from Atlanta United for £20m in January finally broke a transfer record that had stood since Michael Owen's arrival at St James' Park from Real Madrid in 2005.
In the meantime, Newcastle have continued to attract interest from business groups over a potential takeover of the club.
In April, the Dubai-based Bin Zayed Group said it had agreed terms for the purchase of the Premier League side from Ashley, and this was "reflected in a document, signed by both parties, which has been forwarded to the Premier League". In 2017/18, talks with a consortium led by Dubai financier Amanda Staveley broke down amid a failure to agree how much the club was worth.
Opto Advisers, led by former Chelsea and Manchester United chief executive Peter Kenyon, were reportedly putting together an offer for the club. But a source told The National Kenyon was unable to raise the required funds to instigate a bid. In any case, Newcastle were yet to receive an official approach from Kenyon, Tyneside newspaper The Chronicle reported.
We recently commented on the importance of securing Benitez's long-term future at Newcastle, but why it would be a challenge for the club to do so - thanks to the uncertainty surrounding the ownership of the club, as well as Ashley's reluctance to spend big to buy top-draw players from elsewhere.
'Key is to keep Benitez'
It is part of the quixotic way that Ashley has run Newcastle that an Uefa Champions League-winning manager’s contract has been allowed to run down.
Newcastle have run the risk of losing their greatest asset. Benitez’s deal is up at the end of June and talks are yet to result in an extension.
There is no doubt that the Spaniard wants an improved transfer budget and a change in the recruitment strategy. Benitez also tends to want control.
Given his popularity with the fanbase, he is in a strong bargaining position, but any new powerbroker should be keen to keep him.
'Benitez will need convincing'
For manager Rafa Benitez, the frustrations have been all-too evident. The Spaniard, adored by the fans, sees his current contract come to an end in June and has yet to agree a new deal.
The former Valencia, Liverpool, Inter Milan and Real Madrid manager is seeking cast-iron assurances from owner Mike Ashley that funds will be provided to strengthen the playing side – and also improve the training ground and academy set-up – before committing to the club.
Newcastle will never have the money to challenge the top-flight big guns every season – Ashley has always made this very clear.
Where could Benitez go - if not for China?
Benitez's Newcastle exit comes five days after it was announced Luis Enrique was standing down as manager of the Spain national team for personal reasons. Enrique's assistant, Robert Moreno, has taken over and is due to lead them through to Euro 2020, but Spain have now had four managers in the past year and appointing another one, if results are bad, is hardly inconceivable.
It seems unlikely, but a return to Chelsea is a possibility. The London club are looking for a new manager after Maurizio Sarri's move to Juventus. Frank Lampard has been heavily tipped for the job, but there has been no significant development on that front in the week since Sarri's departure. Benitez boasts the same credentials that attracted Chelsea to him when he had a stint as interim boss at Stamford Bridge in 2012/13. That spell yielded Europa League success. The downside was that he never truly won over the fans due to his past Liverpool connections, and that would count against him again.
Other Premier League club
It is thought Benitez would prefer to stay in England. His family are settled in the country and are still based on Merseyside following his successful time at Liverpool from 2004 to 2010. But, Chelsea aside, there are no big jobs currently available. He would have to bide his time and wait for an opportunity. His move to Newcastle shows it need not be a top-six club, but he would look for somewhere with notable stature. He would surely also consider openings in LaLiga or Serie A should they arise.
Back at Newcastle
Stranger things have happened. If Newcastle struggle to find a new boss, or their much talked about, on-off takeover ever happens, maybe an olive branch could be offered. It would certainly be popular with supporters.