Newcastle Reduce Wage Bill 30% But Still Lose Money

The Newcastle financial statement for the previous year are due to be released this Thursday.

Mike Ashley – reduced the wage bill by 30%

And the news is that the wage bill has been significantly reduced, as was expected since during that time,  the Newcastle club was playing in the Championship with reduced revenues coming in.

We’ll have to see just exactly what the results hold later this week, but the early news yesterday was that the wage bill was cut by £21M to £50M, and that’s just a trifle under 30%.

Newcastle’s wage bill during the relegation season was £71M, and was the 6th highest in the Premier League, yet the club was still relegated,  and the owner has every right to ask what he was getting for those wages – not much would be a good answer.

That £71M was far too high when you look at Newcastle’s revenues in the relegation season, which we believe were £89M, so the wages were about 80% of revenues – far too high.

Big wage earners like Michael Owen, Mark Viduka, Obafemi Martins, Habib Beye, Shay Given, Damien Duff and Geremi left the club in 2009, and most of them have hardly been missed.

Viduka retired and Michael Owen is way down the striker pecking order at Manchester United, and has been seen on the bench this season, but hardly ever plays, and still has those hamstring problems,

It’s really a complete waste of Micheal’s talents, because he could still get some goals if he played for a mid table side, but the problem with Michael seems to be he’s lost his passion for the game.

And he’s even come out and said that he’d rather play only a few games for a side winning trophies, than play all the time for  a side struggling in mid-table.

So you see what we mean.

Newcastle’s revenues in the Championship would be a lot less than half of the £89M made in the previous season, and it will be interesting to see the state of the Newcastle finances on Thursday.

Mike Ashley loaned the club at least £30M to see Newcastle  stay above water last season, as they were quickly promoted back to the big time.

The finances take on added significance of course next season, because the UEFA Fair Play Rules go into effect, and the European clubs essentially have to balance their books over the next three years or so.

What a concept that will be for some of these big spending clubs,who simply continue to borrow money to buy expensive players.

A short 18 months ago AC Milan had debts of over £400M and were said to be losing £60M a year, but that will not stop them trying to pay out £10M to get Newcastle’s Jose Enrique in the summer.

That’s just one example of the financial suicide being committed  by many of the world’s top football clubs.

Comments welcome.

20 comments so far

  • Davies

    Mar 28, 2011 at 11:43 AM

    Comment #1

    I’m glad that we have, at the very least, sensible financial management.

  • bri_2k4

    Mar 28, 2011 at 11:43 AM

    Comment #2

    1st 🙂

  • bri_2k4

    Mar 28, 2011 at 11:44 AM

    Comment #3

    damn a wasnt haaha ow well i think the only good thing we got out of cashley is the fact he no’s how to run a BUSINESS,,,,,,but still hate the fatty

  • bri_2k4

    Mar 28, 2011 at 11:50 AM

    Comment #4

    its also a shame thats he’s been here 4 years and he hasent relised were a football club aswell…..

  • JP...from The Rock

    Mar 28, 2011 at 11:53 AM

    Comment #5

    It will be interesting to see how better off we are now.


    Mar 28, 2011 at 11:55 AM

    Comment #6

    to my knowledge ashley has done a decent amount in our training, youth systems and, judging by the ben arfa treatment, man management.

    i know i just opened myself up to the ashley lover insults

  • Sav

    Mar 28, 2011 at 1:00 PM

    Comment #7

    Ashley Lover!

  • terencelim

    Mar 28, 2011 at 1:00 PM

    Comment #8

    Yea selling Andy Carroll is a part of good youth system.

  • shearerbliss

    Mar 28, 2011 at 1:26 PM

    Comment #9

    Tere, We have to stop blaming the clubs youth policy for the sale of AC. Got to remeber to have a sucssesful policy we must retain talent and sell to insure we have the resourses for example scouting youth players.
    To be fair AC good player but like a lot of british based players a bit overrated and lets be honest we have all seen better out there.

  • Stuart

    Mar 28, 2011 at 1:43 PM

    Comment #10

    Tere, I’d say that the selling of AC proved we have a good youth system.

    AC was a player brought up and developed by the club, as such he was never signed, and up until last season he was on youth wages.

    To suddenly get £35m for a player just brought through our ranks, with only half a seasons prem experience is fantastic.

    That money if used properly will sign 5-9 players this summer and completely rebuild our squad.

    I’d say our youth system must be doing something right.

  • chuck

    Mar 28, 2011 at 2:07 PM

    Comment #11

    Sure it was an expensive lesson, the year spent in the second tier.
    But who`s to blame, you got it Ashley.
    As for the thirty million he re -invested, there was no choice on his part, another expensive lesson.
    Ed. you make this guy sound like a savior, the fact is any cost to him is due to the mistakes he`s made since he acquired the club and his reliance on a group including Llambias and Pardew who know f**k all about football and especially running a club like Newcastle.
    He has continued to repeat the same old mistakes all season long and we are now in a state of freefall and could very well be relegated again.
    Not strengthening the side during the winter break to ensure survival compounded by firing the guy responsible for the clubs recovery and then installing a manager disliked by a majority of the fans and one who`s career is questionable to be kind to him.
    Hey just look at his record since he arrived, if one were to set out a plan to ensure relegation, Ashley`s would be the one to choose.
    Yeah to take the gamble on decisions of this magnitude, without having a knowledgable football guy to rely on, well there`s a lot of names one could use to describe such a person.

  • BergenVikingToon85

    Mar 28, 2011 at 2:53 PM

    Comment #12

    dude..? say no to 35mill?? plus the guy wanted out. like someone writes overhead, we can rebuild the squad with that sort of cash.


    Mar 28, 2011 at 3:41 PM

    Comment #13

    Stuart, 9 players on 25k per week works out at £11.7M annually in wages alone, that’s without signing on fee’s, bonuses, transfer fee’s etc…Do you really think Ashley will sanction this when he has just cut £21M off it???

  • bri h

    Mar 28, 2011 at 4:03 PM

    Comment #14

    chuck u r a fool ,mr fat shep ruined this club buying office box overrated players on the never never over 5 to 6 years .granted fat ash has made mistakes but he is running our club as a buisness and before you jump down my throught i know fans arent intersted in that side of the club but lets face it if fat ash had not done what he has next season we could be in real trouble as ed points out the new financial rules could scupper quite a few clubs . as far as you saying none of the toon fans like pardew i think you are way off the mark. chuck wants us buying £10m players with huge wages who could not care less about the club and its fans and only thier weekly wage those days are gone and im delighted .

  • geoff777

    Mar 28, 2011 at 4:09 PM

    Comment #15

    Ashley & Llambias are clueless about running a football club.

    Speculate to accumulate …

    Buy to get in the Champions League then you are rewarded by UEFA.

    All this running the club with no debt is rubbish.
    All businesses have debt.

    Before Ashley we were a public company.
    FFS got criticised but the club’s balance sheet was there for the stock market to see.
    They weren’t bothered about the wage bill and debt or the stock price would have collapsed.

    Spend, spend, spend but stick to the U26 long contract structure.

    I hope Ashley sells in the sum,mer if not before.
    Because he won’t buy the quantity and quality of player we need to get top 4.

    Those saying top four isn’t realistic for the club with the 3rd highest turnover in the league … you’ve had your expectations managed by Llambias & his puppet Pardew.

  • chuck

    Mar 28, 2011 at 5:08 PM

    Comment #16

    Bri H
    Dont be so abnoxious, you have no idea what i think and stop insulting people.

    If you compare the overall earnings with other PL sides we are not in the top five.
    Yes we have the third largest attendance, unfortunately tv revenue plus shirts etc. generates more income than bums in seats.
    One thing to consider is that as a privately owned company, all debt is Ashley`s and he is`nt in business to lose money, so draw your own conclusions.

  • Solaidback

    Mar 29, 2011 at 9:37 AM

    Comment #17

    geoff777 – 3rd highest turn over in the league… you frakin idiot… maybe the 3rd highest attendance but we’re no where near 3rd highest turnover… lol lol

    Yeah lets go out, spend £100m on players, pay them £100k/week each & see how long it takes us to get into the top 4…. oh dear, there are club ike Manc Usa, Chelski, Arsenil & Manc Citey, plus Spurts who’re already there, so in that case we’ll not get into the top 4 & still have to pay out 10’s of millions a year on wages without the revenue to cover it…. jeez I’m glad I don’t work in your fraking company, I’d be out of a job in weeks…. moronic fool!!!!

    So what if we don’t buy overrated players on stupid wages, I’d rather have 10 players that cost us 3-5m & pay them 30k/50k per week as long as they play for the shirt & take us up the league slowly, than trying to buy the league when the clubs revenue doesn’t cover the outgoings anyday!!!

  • derekm

    Mar 29, 2011 at 11:43 AM

    Comment #18

    Chuck – how can you label Pardew as a fool? His only problem ( by his own admission ) was his head got too big when he managed to drag some success out of West Ham. Most coaches in the know describe him as a talent that has’nt found the right place yet. The way he has handled the ridiculously difficult task of replacing Chris Hughton and getting ALL of the players onside is nothing short of incredible – and you can only judge him after we ( hopefully ) secure our premier status and the quality of players he brings in over the summer. With regard to Ashley – if he gets the club solvent, whilst giving his manager the funds to bring in what is needed, then how can we criticise his actions? Like him or not, all of the signs are that slowly but surely we are heading for a financially stable club not reliant on his cash – nicely in time for the FIFA directive when the Man Citys, Uniteds, Liverpools and Chelskis of this world will have to come back into the real world. And for god’s sake – £35 million for Carroll is STILL ridiculous money and had to be taken at the time.

  • AndyMac

    Mar 29, 2011 at 8:46 PM

    Comment #19

    Davies says:

    “I’m glad that we have, at the very least, sensible financial management”

    Oooh yes Davies I’m so glad we have sensible financial management at this club cos we’ve got feck all else !!!!

    PS You’re not of the shirt lifting persuasion are you ?

  • kev

    Mar 29, 2011 at 10:35 PM

    Comment #20

    Newcastle could win the treble and certain clowns on here would still find fault with the owner and Pards,

    How the long winters nights must have dragged for those who have to put up with the constant whining, whinging and utter depression the miserable buggers emanate on here, call themselves fans, don’t make me laugh.


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