Palace have still not scored a Premier League goal this season, and with Christian Benteke out injured, Palace realise that they need to find a goalscorer.
The Eagles are firmly rooted to the bottom of the Premier League table, meaning they cannot risk financial jeopardy by throwing money at the problem.
And that could mean that Townsend is sold to fund a bid for a new hitman.
Townsend has proven to be one of Palace’s most threatening creators, but he could fetch a good fee - and Newcastle United must be enthused by the latest noises coming out of Selhurst Park.
Newcastle have been chasing Townsend for some time, as reported by the Chronicle, with Rafael Benitez known to be a fan of the wide-man, but they haven't been able to bring him back to St. James’ Park yet.
However, Newcastle may now have a trump card to pull, as they look to sign Townsend.
It is not yet clear just how much money Benitez will have to spend in January, but in Aleksandar Mitrovic, he may be able to offer the perfect player to convince Palace to part ways with Townsend.
Mitrovic has fallen completely out of favour at Newcastle, yet he has proven capable at scoring a Premier League level before.
Mitrovic netted nine times in England’s top flight when he was just 21, and he remains a frequent scorer on the international stage.
The Serbian would offer Palace power up-front, and his passion would not go amiss in a relegation scrap.
Newcastle, it seems, would be more than willing to offload Mitrovic, and if they could get Townsend in return it would be a major bonus - which makes the deal look like one which could be ideal for all parties involved.