Newcastle Wages 80% Of Revenues – Halved Next Season?


Derek LLambias has opened the books on Newcastle United a little today, and has said the club is currently paying out £40M in wages when the revenues coming in are only £50M.


Managing Director Derek Llambias said today:

“That is a lot of money to find. Season tickets we have been really lucky in that we had 28,000 this season which was good.”

“But you need to be up around the £100M  mark to be able to afford the wage bill we have.”

“Mike has admitted he has made mistakes with some of his appointments which have caused all sorts of problems within the club and within the city.”

“We are where we are. He is staying.”

“It is not a normal business. You can run a business when 80 per cent of your revenue is down to payroll. Football needs a wake-up call.”

But surely if Newcastle do get promoted things on the financial side will be a lot better next season.

The club has a £40M wage bill and £50M revenues this season. which is why Derek is talking about an 80% wage bill compared to incoming revenues.

But next season the wage bill may not be too much above £40M. We expect Nicky Butt to retire (£3M a year wages), and the new players shouldn’t raise the wage bill that much.

We have to say that we keep wondering if Mike Ashley is thinking of selling Coloccini this summer – Fabricio is on a reported £3.5M in wages on Tyneside.

So if we make the Premier League and get back to £100M in revenues, then our wage bill could be just 40% of revenues next season.

That’s a wage bill that is cut in half when compared to incoming revenues.

This season is certainly a non-sustainable business model in terms of finance.

The club can afford to drop to £50M revenues and still pay out £40M in wages, but not for long.

Which is why it’s absolutely crucial to be promoted in May.

Comments welcome.



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12 comments so far

  • komfort

    Mar 9, 2010 at 12:45 PM

    Comment #1

    looks like big mike’s gonna be coining it in next season then.

    …nee wonder they wanna hit the town again after the matches.

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  • komfort

    Mar 9, 2010 at 12:48 PM

    Comment #2

    probable venues to spend the lovely lolly:

    …for your eyes only.

    ….stanley’s casino.

    ……the nearest kebab shop.

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  • Sav

    Mar 9, 2010 at 12:55 PM

    Comment #3

    “Those figures from being the 20th richest club are from 08-90 when we were Premier League,” Llambias said. “The drop from Premier league to

    Championship is just huge. So our revenue would be more like the 48th figure now. We have a huge wage bill that dominates that figures.

    “What we are doing is that Mike has pumped in £25 million in December for running costs and we bought £5.5 players in January and Mike has just paid for that, he is committed and absolutely focused on getting the club back up to the Premier League and wants to make sure it stays there and will continue that.

    “There has not been a penny taken out of the club by Mike. We have had quite a substantial claim by Kevin Keegan that we had to deal with.

    That is a lot of money to find. Season tickets we have been really luck in that we had 28,000 this season which was good. But you need to be up around the 100 million revenue mark to be able to afford the wage bill we have.

    Llambias also hit out at those Newcastle supporters who still target Ashley with abuse over his rule in the club’s decline.

    He continued: “I do find it foolish. It is offensive. I don’t think they actually understand what mike has actually done for the club. We have been honest. Mike has admitted he has made mistakes with some of his appointments which have caused all sorts of problems within the club and within the city. We are where we are. He is staying.

    “It is not a normal business. You can run a business when 80 per cent of your revenue is down to payroll. Football needs a wake-up call.”

    Again, there’s no reference to player sales, Llambias claims Ashley has paid in 25 million and needs to put in 10 more before the season ends. Why?
    Sorry, you cokney carney-show spoofer. It just doesn’t add up.

    …and its all Keegan’s fault – I knew it!

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  • Sav

    Mar 9, 2010 at 12:56 PM

    Comment #4

    But we’ re NOT stinking rich, REALLY we’re not. Honest.

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  • chuck

    Mar 9, 2010 at 2:31 PM

    Comment #5

    Here you go again with the should we sell Colo. bullshit.
    What are you the club`s accountant ?
    We have a top defender that most clubs would be happy with and you are wondering if Mike will sell him, for what, to bring in lesser quality and cheaper players.
    Why dont yuo just let the whole financial side go and concentrate on the playing side, as I am sure Mike does`nt need your financial assistance, ok !

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  • chuck

    Mar 9, 2010 at 2:45 PM

    Comment #6

    As for revenue, sure it`s down this year, but using season ticket figures instead of total gate figures is misrepresenting income.
    Yes I believe Mike ashley has had to subsidise the club to an extent.
    But one must remember in who`s interest it was, yes Mike Ashleys.
    This coming season hopefully in the PL the income will probably be more than doubled, with a guarranteed fifty million + from tv , gate money, etc. a bonanza !
    Possibly bringing overall expenses to around fifty per cent of income, in which case all you accountants and bean counters can relax and concentrate on the game of football, for a change.

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  • twang

    Mar 9, 2010 at 2:47 PM

    Comment #7

    Derek Llambias keeps harping on about the money Mr Ashley has put into the club.. I’m wondering what became of the ‘parachute payment’ from the FA and the revenue generated from the recent sale of players?

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  • xfer

    Mar 9, 2010 at 4:17 PM

    Comment #8

    Not to mention the expected increase in revenue through increased season tickets.

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  • Bosck

    Mar 9, 2010 at 6:05 PM

    Comment #9

    Chuck, do you ever actually properly read what ed has said before starting off on a rant about it.

    he does not say and has not ever (at least since the start of the season) said we SHOULD sell collicini, he is just pointing out that it is possible that MA might look to sell collocini if he is on wages equivalent to 4-5 other members of the squad put together. this is a fair issue to raise as ma has made no secret that he wants to reduce the wage bill. ed if you read his posts clearly doesnt want collicini to be sold but is making people aware that it could unfortunately be a distinct possibility this summer.

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  • Mad Magpies

    Mar 9, 2010 at 6:47 PM

    Comment #10

    Komfort,
    As much as i like frequenting for your eyes only, why pay those prices?.
    You could probably pick up a toothless moonlighting dinner lady from the big market who would willingly dance plus extras for as little as a bag ov chips with scraps!!………………….lol

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  • Sav

    Mar 10, 2010 at 1:36 AM

    Comment #11

    MadMagpies. I hope that’s not a secret metaphor for Ashley’s spending policy next term.

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  • Bao Zheng

    Mar 10, 2010 at 6:49 AM

    Comment #12

    Like it or not Big Mike and even Llambias are getting to grips with how to run a football club. We are comfortably top of our league, strong squad taking injuries etc in our stride, financially sound (assuming promotion), great youth development, and we feature on the back pages not the front. I think the moaners need to reconsider.

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