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