Newcastle Finances Make For Interesting Reading


The finances of Newcastle United football club have been made public and there are some interesting financials in the accounts.

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Here are some interesting points from the accounts:

  • Owner Mike Ashley has ploughed more than £100M into the club to clear all debts at the club.
  • Sam Allardyce and his team got payouts of £4.6M when they left the club in January last year – no wonder it was by mutual consent that he agreed to leave – the club were very good to him financially.
  • Newcastle received £6.7M in compensation for striker Michael Owen getting injured during the 2006 World Cup while playing for England – that sounds good.
  • Newcastle’s revenue (turnover) rose from £87.1M to £99.4M over the last year , which reflects the Premier League’s new three-year television deal – that’s a 14.1% increase.
  • Newcastle have a wage bill of £62.6M, up from £53.2M – that’s a 16.9% increase, which is more than the revenue increase.
  • Newcastle recorded a loss before tax of £20.3M, which was less than in 2007, when it lost £34.2M.

The accounts were prepared by accountants Ernst and Young, and show that Mike Ashley has invested a further £10M of his own money into Newcastle since the end of the last financial year.

They have been signed off on the basis that Ashley has given assurances he will continue to finance operations into the future, which comes just weeks after he revealed the club is no longer up for sale.

A note to the financial statement adds:

“This funding, together with newly- agreed bank facilities, has been incorporated into the directors’ cash flow forecast for the group.”

“These forecasts indicate that the group can continue to meet its debts as they fall due for a period of at least 12 months from the date of approval of these financial statements.”

“The directors have also received a commitment from its parent undertaking, St James Holdings Ltd, and from the ultimate controlling party Mr MJW Ashley that they will continue to provide the group with financial support so that it can meet its debts as they fall due for a period of at least 12 months from the date of approval of these financial statements or up until the date of any changing control.”

“On this basis, the directors have prepared the financial statements on a going-concern basis.”

The introductory report to the accounts, written by Managing Director Derek Llambias, states the average Premier League attendances at St James’ Park rose from 50,686 to 51,321.

We would expect that figure to drop by a few thousand for the current financial year, because the home attendances seem to be down at least around 8%.

It also states matchday and commercial income declined over the year but more income was received due to Newcastle United finishing in 12th place in the league, compared to 13th a season earlier. Each place we understand is worth close to £1M.

The statements that Mike Ashley has further invested £110M of his own money into Newcastle United, on top of the £134M he initially paid for the club, are indeed accurate.

So Mike’s in for £245M at the club, so far, and it looks like the club has no debts whatsoever – which is good, and not many football clubs will be able to say that.

Now, if we can only get 5 new players in over the next 11 days.  😀

Comments welcome.



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692 comments so far

  • RyanToon

    Jan 22, 2009 at 3:23 PM

    Comment #1

    stardust, lead the way mate lol

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  • Kash

    Jan 22, 2009 at 3:23 PM

    Comment #2

    I had to eat humble pie after reading the statements!

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  • Micky Toon

    Jan 22, 2009 at 3:25 PM

    Comment #3

    Don’t let batty see this article, he’ll blow his lid.

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  • Kash

    Jan 22, 2009 at 3:26 PM

    Comment #4

    But MA still made mistakes in his decision as owner.

    If he had just appointed a proper football chairman instead of Mort or Llambias, then we wouldn’t be in this position!

    David Dein anyone?

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  • BT9MAG

    Jan 22, 2009 at 3:29 PM

    Comment #5

    Kash – at least you had your slice mate…there’ll be a touch of anorexia going on these boards I think.

    The 10m transfer fund makes sense now – Ashley said he’d put 20m a year of his own money into the club – he’s already put in 10m, the other 10m is for transfers I guess…

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  • durhammag

    Jan 22, 2009 at 3:29 PM

    Comment #6

    The statement makes it clear now what MA’s strategy appears to be.
    Reduce wage bill / wage bill as % turnover.
    Stick with the manager despite results and fan protest to stop compensation payments
    Youth centred recruitment for long term growth, irrespective of whether it be in PL or CCC
    Keep the bankers happy to make sure the club / Sports Direct can continue to be funded

    Ashley sees this club as a business, pure and simple, and I don’t think he would see it as failure if the club got relegated. As long as the coin keeps coming in and costs are less than income, it’s fine!!!!

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  • Toon Graeme

    Jan 22, 2009 at 3:32 PM

    Comment #7

    I have often posted that MA couldnt be that stupid to let things get this bad and this confirms that he has opened his wallet to bail out the club of a financial wreck. Cheers Freddy.

    I think the days of big name high earners are long gone.

    Im somewhat in Limbo now about the situation.

    It doesnt change the fact that MA has done himself no favours by staying schtum and as for voiceless Llambias – Welcome to Benton you Basket! Not. Have no hesitation is telling everyone that I hate the goon. He is voiceless and has not – nor ashley – stood up and backed the team or team players who are unhappy.

    Of course he was gonna sell Milner!

    The only way to turn this around is to get bums on seats, get rid of the dead wood and high earners. See ya Dukes, Geremi, cacapa, MO, Smith and hate to say it Barton (hope not).

    I dont know what to think now.

    Anyone with their views.

    One thing – I am at SJP til the end of the season!

    COME ON TOON.

    N E W C A S T L E U N I & a T E D. NEWCASTLE UNITED FC!!!!

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  • Micky Toon

    Jan 22, 2009 at 3:33 PM

    Comment #8

    Ironically, for me, if the records had shown we were in profit and Ashley was skimming a massive amount for himself I would have actually been happier. That is an easy fix. Ashley sells, new owners, job done. This shows that there is no easy fix and whoever is looking after the financials of NUFC is actually doing a good job.
    I wouldn’t get too upset at people not admitting they were actually wrong about the financial situation, it just shows how much crap is spouted on here and is suddenly taken for fact.
    I’ve always said I’d reserve judgement until I see some cold, hard evidence. This has shown me that the finances are sound.
    I’m still waiting on what happens with the transfers.

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  • Pons Aelius

    Jan 22, 2009 at 3:34 PM

    Comment #9

    Don’t think anyone can blame the Newcastle fans for having ambition. We have a 52,000 stadium full most of the time, a club famous around Europe and one of the world’s best strikers in Owen.

    The problem is the financial situation left by poor scouting resulting in buying poor players for millions. Look at players like Des Hamilton, Christian Bassedas, Georgios Georgiadis, Albert Luque, Titus Bramble, Jean-Alain Boumsong, Hugo Viana, Patrick Kluivert, etc.

    Now I may be harsh on some of the players in that list for one reason or another (there are many more that can be added to that list from our present squad), but the cold hard truth is that Shepherd over-invested in the club. For the amount of money spent on our squad from 1992-present we should have been regulars in the Champions League. That was what the club budgeted for and failed to achieve.

    We have to accept the fact that this club will be reliant on buying mainly from the bargain basement. The only time I can see big spending will be one or two in the summer and when we have a new sponsorship deal. Shepherd being the nugget that he was agreed for the Northern Rock cash up front.

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  • doofa the loofa

    Jan 22, 2009 at 3:34 PM

    Comment #10

    they can make the numbers look any way they want. why not pay 70m in debts and 30m for players?

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  • Kash

    Jan 22, 2009 at 3:35 PM

    Comment #11

    @DurhamMag – Nail on the head mate!

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  • Micky Toon

    Jan 22, 2009 at 3:37 PM

    Comment #12

    PA – In hindsight Shepherd’s best decision was to ask for the Northern Rock money up front. We would have had no chance of getting it last year, never mind this year.

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  • doofa the loofa

    Jan 22, 2009 at 3:39 PM

    Comment #13

    micky toon.
    good point m8, he must have a crystal ball..

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  • hitman

    Jan 22, 2009 at 3:40 PM

    Comment #14

    toon fresh crackin link mate,good read

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  • Toon Graeme

    Jan 22, 2009 at 3:41 PM

    Comment #15

    This release of information leads he way until the the forthcoming press statement after the window shuts.

    I can imagine it now about the finances etc etc.

    All this aside – the team are playing s*** and we need a rebirth like against Villa when we kicked there back end.

    We need 110% focus and if we go down a goal we step up the gas.

    Use Burnley as an example of how a team can overcome the odds. True they still lost but up to a point they were in charge.

    We have the talent in the team to do it.

    Roll on Wednesday night!

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  • The Real Entertainers

    Jan 22, 2009 at 3:42 PM

    Comment #16

    Just posted my thoughts on the other topic but appear more appropriate to this one:

    Ashley will speak to the fans in Feb’, thats when we all know the financial result and will have some vindication in his efforts, but also i fear he will point to this for another poor showing in the transfer market as that too will be closed.

    All quite depressing.

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  • Micky Toon

    Jan 22, 2009 at 3:42 PM

    Comment #17

    TG – The difference between us and Burnley is that their players actually want to play for the shirt, apart from one or two, ours seem like the couldn’t care less.

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  • BT9MAG

    Jan 22, 2009 at 3:42 PM

    Comment #18

    durham mag – you’re right to an extent…at least I think Ashley does see this club as a business, but you can’t separate it from the industry…I know that, you know that, Ashley knows that!

    It’s simple common sense that if the club goes down, we make less money, therefore we need to cut costs further in order to stay afloat – do that, we go down again, and again….Ashley isn’t stupid, he knows that the most money is in the Premiership, so staying in the Premiership will be his priority!

    As for the young signings – I genuinely think Ashley surveyed the Arsenal-esque model of buying young and developing players. We know it’ll work given time – the problem is, will this time be afforded to him by a) the fans, and b) our precarious league position? That’s something I’d like to know the answer to!

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  • Mark_S

    Jan 22, 2009 at 3:43 PM

    Comment #19

    Paid all of the depts, then how can they say

    “These forecasts indicate that the group can continue to meet its debts as they fall due for a period of at least 12 months from the date of approval of these financial statements.”

    does this mean any new depts incurred over the next month they can meet, or does it mean, that with current depts from the previous year it can still meet, but there is non if Ashley paid them off?? HHMMmmm never any good at finance me..

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  • Kash

    Jan 22, 2009 at 3:43 PM

    Comment #20

    Does anybody agree with me that the majority of this could have been avoided if a proper chairman was appointed in the first place?

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  • The Real Entertainers

    Jan 22, 2009 at 3:45 PM

    Comment #21

    So we can write off the transfer window yet again. Unfortunately it again shows the failings of the summer transfer window when the 20 million WAS available!

    Hopefully we wont write off the season, but i guess one question i would ask Mike in Feb would be if indeed he wants to continue at the club, will he still look for extra financial support like he said he would last year?

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  • doofa the loofa

    Jan 22, 2009 at 3:45 PM

    Comment #22

    rex is one handsome bar steward.

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  • Micky Toon

    Jan 22, 2009 at 3:46 PM

    Comment #23

    That link to the rivals board. What a load of tosh. They talk about borrowing £20m as though it was the same as asking your mate for a tenner. Just who is going to lend Ashley £20m? The banks? They are being ultra tight at the moment. Private investors? Nope, they are all skint or hanging onto their cash until the markets and the banks stabalise. Oh I know, everyone can chip in £5k of their own money.

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  • Kash

    Jan 22, 2009 at 3:46 PM

    Comment #24

    @Mark_S – I think it includes palyer salaries into that as well though!

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  • Shanghaitoon

    Jan 22, 2009 at 3:47 PM

    Comment #25

    Actually, Burnly won the individual game but lost the 2 way agregate. They still fought well and beat Spurs on the night

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  • Micky Toon

    Jan 22, 2009 at 3:49 PM

    Comment #26

    Kash – I’ve been saying that for what feels like ever on here, yet all I get in return is abuse that I’m not a true fan and an ashley bum boy, Zzzzzzzzzzzzzzzzz.
    I do have time for Ashley, but I still don’t think he’s right for our club. He can prove he is by getting in a proper chariman, not Chris Mort as he knows as much a lambiarse about a running a football club. People only think they want Mort because he apparently spoke to the fans. If that’s the only qualification you need for being a good chairman then sign me up.

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  • Kash

    Jan 22, 2009 at 3:49 PM

    Comment #27

    @Micky Toon – MA can borrow from his holding company, if they have it!

    But I thought the same about borrowing £20m. However, lending is only tight for the average consumer. Wholesale lending is still prominent in the banking sector, so if he wanted, he’d get the money!

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  • doofa the loofa

    Jan 22, 2009 at 3:50 PM

    Comment #28

    any other club would do a complete boycott. why is this not happnin?

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  • Stardust

    Jan 22, 2009 at 3:53 PM

    Comment #29

    Ryan toon lol – no i wont take anything from this. I am happy to be vindicated – the only thing I want is for everyone to support the club.

    We the fans and Ashley all have the same long term ambitions. Success – how we go about it is simply perception.

    Ashley has more to gain by success and more to lose by failure than any of us.

    I trust this ends the witchhunt for a man who has actually saved Newcastle.

    he previous regime almost Stole 40million pounds in dividends we werent making. Yet their hoodwink trophy signings allowed them to do it. I have said for a few weeks that the accounts were due now – here they are – I hope everyone gives him a chance.

    everything else is water under the bridge, can we move on supporting the team please?

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  • hitman

    Jan 22, 2009 at 3:55 PM

    Comment #30

    it makes sence to spend some money now,or we could be in the fizzy pop,ashley will have his soloution then aboot the high wage bill.

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  • valle

    Jan 22, 2009 at 3:56 PM

    Comment #31

    MA have cleared the debst… Hooray… What now, are we to sit back and clap our little hands in joy?… All this is good, but there is still NO immediate way forward!, we have to wait and hope our youths will make the grade… If we have no debts, then why cant we keep up with the other clubs when it comes to strengthening the squad?, something dosnt add up.

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  • jim

    Jan 22, 2009 at 3:56 PM

    Comment #32

    so what were saying then is we just need a fresh start? ie. better manager, new young players in, more luck and less injuries? must admit it doesnt look bad on paper with the way its being run-so lets hope we deliver in this window and stay up-and yes it was me in the other posts ranting on about keegan shepherd and hall lol-and revolts etc-sorry about that lads-lol-i know its not the way forward but sometimes we have to let off steam and its nice to rant! lol

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  • Micky Toon

    Jan 22, 2009 at 3:56 PM

    Comment #33

    Kash, I thought it was the other way around, as money is there for the right people, as it always should be IMHO, and it was the wholesale lending between banks that was stalling?
    Anyway this isn’t motleyfool, so I’ll stop talking finance before batty comes along.

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  • radge

    Jan 22, 2009 at 3:57 PM

    Comment #34

    Micky Toon // Jan 22, 2009 at 3:37 PM

    PA – In hindsight Shepherd’s best decision was to ask for the Northern Rock money up front. We would have had no chance of getting it last year, never mind this year.
    ****************************************

    Actually, he didn’t ask for it up front, they were and are contractually committed to pay an annual figure. What FFS actually did was to spend it up front, which blew a hole in what ashley had assessed as being part of our annual income….hence the debt, or at least part of it.

    The salaries we pay are criminal….I remember seeing something on here a few months ago that had us 4th or 5th top in the salary league, which highlights the underachievement of the players. Ashley’s plan is to get rid of these people and bring in younger, more motivated, less expensive replacements. Whatever else he’s done wrong (whcih for me is almost entirely due to poor communication by Lambias), i fully support him in this goal.

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  • stu

    Jan 22, 2009 at 3:57 PM

    Comment #35

    even with this recent information do you think he will ever be welcomed back, I for one do not have a problem with him going to the games.

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  • jim

    Jan 22, 2009 at 3:57 PM

    Comment #36

    RAAARRRRRRGHHHHHHH!!!!!!

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  • Troy Stavers

    Jan 22, 2009 at 3:58 PM

    Comment #37

    Am I missing something here. I thought everyman and his dog knew that he paid the debts off and it cost £ 245m. Thats been known from day one. Why has this changed some peoples minds about the inability of Ashley to take us forward? The man is worth £800m, we need new players, if that means spending £20m to save us from relegation then should he not be doing that. Currently he is gambling with the club like he does on the roulette wheel. Taking a chance on players like Lovenkrand. We’re are not asking for £50m, but enough to secure premier ship status. His actions are driving out the likes of Given, who stands for all the good that is NUFC. He will not being paying interest now and the forthcoming year guarantees him profit. Save the club, buy some players before it’s too late.

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  • Little Willie

    Jan 22, 2009 at 3:58 PM

    Comment #38

    Micky Toon
    PA – In hindsight Shepherd’s best decision was to ask for the Northern Rock money up front. We would have had no chance of getting it last year, never mind this year.

    —-

    Not really, we would just have cancelled that agreement and got a new club sponsor, likely for more money as most clubs are singing better deals now than we did back then, Spurs getting £8 million a year off Mansion for example.

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  • Micky Toon

    Jan 22, 2009 at 3:59 PM

    Comment #39

    valle – that is why I said, given my stance on all things NUFC and going against what I have previously said, it may have been better if it did say that Ashley was making megabucks as that would mean we would have money to invest under the right management.
    This result, although vindicating people like stardust and to a lesser extent myself, is probably worse as it shows we have no money to invest in the club. Therefore we have no way out of this mess, other than relying on our players returning from injury in time to save the season.

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  • jim

    Jan 22, 2009 at 3:59 PM

    Comment #40

    its that frustrating tho its made me fancy a drink! lol-shearers anyone? and fund fat mike even more? hahaha-im an idiot-im a legal idiot,im an idiot in new york!

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