Newcastle finished 11th in the Premier League last season despite spending the majority of the campaign locked in a relegation battle.
Following a £92million January splurge, The Magpies are expected to strengthen again during the summer transfer window having already secured the £15million signing of Matt Targett from Aston Villa.
The ambitions of the club under new Saudi-backed ownership are to break into the top half of the Premier League but Merson feels that a cup run should be the priority.
“Newcastle should be happy finishing tenth next season if they can put together a good cup run as well,” the former Arsenal forward said in his Daily Star column.
“They have got to start turning up in the cup competitions because too many managers have mugged those off when they’ve gone there.
“Newcastle haven’t won a trophy in so long and their fans need something to get excited about.”
Check out the latest Premier League transfer speculation below...
5. Albion weigh up Cisse swoop
Olympiacos’ £15m Pape Abou Cisse is under consideration for Brighton. (Daily Star) | BELGA MAG/AFP via Getty Images
6. SEVILLE, SPAIN - JUNE 02: Raul de Tomas of Spain looks on during the UEFA Nations League League A Group 2 match between Spain and Portugal at Estadio Benito Villamarin on June 02, 2022 in Seville, Spain. (Photo by David Ramos/Getty Images)
Espanyol striker Raul de Tomas is on Arsenal’s radar, and is valued at around £21.5m. (Super Deporte) | Getty Images
7. Leeds eye McAtee
Leeds United are keen on signing Manchester City midfielder James McAtee. (The Athletic) | Getty Images
8. Berge clause revealed
Leeds United target Sander Berge has a £35m release clause in his contract, but the Whites might not have to pay that much to sign him. (The Star) | POOL/AFP via Getty Images