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News and Commentary On Newcastle United Football Club By Ed Harrison, A Proud Exiled Geordie And Lifelong Fan

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Good Financial News For Newcastle United

9:34 am, Tuesday, March 6th, 2012 by Dr. Ed Harrison · 34 Comments

There are two pieces of good financial news for Newcastle United today.

Ashley and Llambias - have the club in excellent financial health

The first is that Newcastle are the latest club to settle a dispute over image rights with the UK tax authorities.

Payments classed as image rights rather than as wages are taxed at a  corporate tax of 26% rather than the income tax rate of 50% on wages.

So wherever possible and legal,  payments are classed as image rights – but both those corporate tax rates are high indeed.

Newcastle have come to a settlement with the UK Revenue and Customs, and have also come to some agreement on future payments as well – which is good.

And the second piece of good news is the Tyneside club will be releasing its financial results later in the week for the financial year through June of last year, and the news in the Daily Telegraph today is that they will show a profit for the first time since Mike Ashley took over the club in the summer of 2007.

As a long term business, we are also hoping that profits will be ploughed back into the club, so Mike Ashley runs Newcastle as a zero profit business, so to speak.

The UEFA  Financial Fair Play regulations are coming into effect over the next three years or so, and the basic aim of the rules is to get football clubs to balance their books.

That’s  so that clubs like Portsmouth, Glasgow Rangers, Southampton, Plymouth  and Port Vale – to name only a few – do not go bankrupt.

That means spending only what comes into the club in terms of revenues, so the revenue numbers in their latest financial results will be interesting for Newcastle, and we can see what the increase is over the previous financial year.

For UEFA to have to force this shows that clubs, and it’s usually the big clubs, spend money they just haven’t got, just as Newcastle did under Freddy Shepherd.

Glasgow Rangers are the latest club to go belly up, and they are now negotiating  with the players on how to cut their wages,  so they can save £1M a month through the end of the season.

Events like these will make it much more difficult for clubs who get into trouble,  to attract good players in the future, but that’s not the case with Newcastle United these days.

The club is run in a thrifty manner, which means the club can pay out big wages to their top players who deserve them when they have to – like to Fabricio Coloccini and Tim Krul as two very good recent examples.

We know a number of fans don’t like the clubs to be run as out-and-out businesses, but the reality these days is that the financial side of a football club is almost as important as the playing side, and football is getting to be a huge global business.

Newcastle at the moment seem to be in good shape on both fronts.

Comments welcome.



Tags: Contracts · Financials · Newcastle News



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34 responses so far ↓

  • 1 lewytoon // Mar 6, 2012 at 9:37 AM

    first?

  • 2 Colo-Sus // Mar 6, 2012 at 9:41 AM

    Fanatstic stuff,

    I love that we are going this way financially, dont under estimate the importance of that, Look at Rangers.

    Well done Mr Ashley, credit where its due.

  • 3 lewytoon // Mar 6, 2012 at 9:42 AM

    my team to play arsenal:

    —————-Krul——————-
    Raylor—Colo—Willo—Santon
    –Cabaye—-Tiote—Jonas——
    —–HBA————–Cisse——
    —————–BA——————

    4-3-3

    can swap BA and Cisse, that way the weak link simpson has been is dropped instead of santon
    (off last article)

  • 4 WWJBD // Mar 6, 2012 at 9:42 AM

    Zero profit business + Mike ‘Slim Fast’ Ashley? Don’t take the pee Ed there’s no need for it ;)

  • 5 Colo-Sus // Mar 6, 2012 at 9:45 AM

    Troleibusiukas

    I like both as they are a compliment to each other, and allow fluid movement.

    I assume the Marveaux inclusion is a pointer to next year..

    But i Stick to leaving Cisse out for a couple of games and bringing him on as sub, I think it will help him and us to get the best out of him long ter, take the pressure off him. Let him gel.

    Lew

    I like that side

    its my personal preference, but in reality Simo wont get dropped, by Pards

  • 6 alex84 // Mar 6, 2012 at 9:46 AM

    How good was Ben Arfa on Sunday…my word, very exciting to have a player in black and white like that again, he must get a regular start now, his positives out weigh the negatives for sure, we need him as he puts teams on the back foot, we dont do that with defensive wingers.

    http://youtu.be/MN5aRlDnc3I

  • 7 Colo-Sus // Mar 6, 2012 at 9:49 AM

    Congrats to all those on this blog who comment in the proper fashion.

    IE
    Constructive commentary on the team etc..

    Its been great recently lets keep it up

    TIOTE FACTS was hilarious yesterday,

    My personal fave was

    ”its generally considered an achievement to go down Niagra falls in a Barrell, Chieck Tiote can UP Niagra falls in a cardboard box”

    For those who have not seen the banter check out yesterdays article

    ”Pardew ” i did not cover myself in glory”

    LMFAO

  • 8 ROSHAN // Mar 6, 2012 at 9:51 AM

    rather like to see NUFC has a mid table team rather than being relegated or even striped of the league like rangers and other clubs because of bankrupt

  • 9 Too Krul // Mar 6, 2012 at 9:55 AM

    Excellent news this, Match days cost me a lot! Also if we make a profit, we will be laughing. Hats of to Ashley now, it has to be said.

  • 10 ROSHAN // Mar 6, 2012 at 9:56 AM

    i am sure PARDEw will play 4 5 1 formation against arsenal that to away at emirates cause he did the mistake playing 4 4 2 away at spurs and paid the price

  • 11 Colo-Sus // Mar 6, 2012 at 9:59 AM

    Nexst Season’s Team Hopefully

    =============Krul==============
    Santon===Colo====Saylor====Pieters
    =====Cabaye==Tiote==Corgnet=====
    =============HBA==============
    =========Ba=======Cisse========

    Elliot/New GK
    Douglas
    Raylor/Fergie
    Marveaux/Jonas
    Vuckic/Abeid
    Rhodes/Best
    Obertan/Shola

    Loads of options, rotation etc, need it for Europe

    Cup team

    =============Krul================
    Raylor===Colo====Douglas=====Fergie
    Obertan===Abeid==Corgnet====Jonas
    =========Best===Rhodes========

    Just a thought, i like planting these theories :)

    Loads

  • 12 ROSHAN // Mar 6, 2012 at 9:59 AM

    my team for arsenal will be
    KRUL simpson williamson colo RAYLOR ben ARFA CABAYE Tiote GUTHRE GUTI ba in a 4 5 1 formation

  • 13 mindshaft // Mar 6, 2012 at 9:59 AM

    Anyone who watched the four year plan on BBC2 on Sunday night would have been amazed at the idiocy of some owners/chairmen running football club, Ashley / Llambias have made mistake after mistake and continue to do so with the ground renaming
    However it is a business to them and a religion only to us, can’t really fault the financial side of things in the last couple of years, in that sense relegation was a big wake up call

  • 14 oldbobaycliffe // Mar 6, 2012 at 10:00 AM

    i think the goverment should stop this tax get out as we need the money more than greedy football players what benefit does image rights give to football clubs every thing is done for them with off shore accounts etc.yet when i was working i didnt want to pay tax but i had to no get out schemes for me

  • 15 PaddyToon // Mar 6, 2012 at 10:00 AM

    This s what i think would be our best team while using our best players and players that deserve to be in the squad
    Krul
    gutierrez willo colo santon
    cabaye tiote guthrie
    ben arfa ba cisse

    ben arfa and cisse playing more winger type roles lik best was playing for a bit this season with jonas as right back. he plays there for argentina an i feel he hasnt been attacking with the same force as last season but he still works extremely hard and is defensively sound.
    wat does everyone think?

  • 16 Colo-Sus // Mar 6, 2012 at 10:03 AM

    Paddy

    I think thats a decent idea tbh, I agree on Jonas, he looks to have lost half a yard of pace, might be a shout, Pardew dropped him to left back on Sunday for the last 5 mins..

    i think hell end up a full back later in his career, Certianly with Marveaux coming back on the left.

  • 17 ArtyH // Mar 6, 2012 at 10:08 AM

    The good thing is we are not expected to win in London, and if we can put on a good display it will be a blessing. If results go our way at the weekend we can consolidate sixth place and push on from there for the final few games. A 0-0 draw would be awesome.

  • 18 argentoona // Mar 6, 2012 at 10:21 AM

    Simmo is the best RB we have at d moment so there is no way he will be left out
    But I do prefer more attack minded RB
    For example Daniel alvez for Barcelona

  • 19 bambams // Mar 6, 2012 at 10:31 AM

    I am a little worried about how we are playing, we seem to grind out results rather than play flowing attacking football. Now dont get me wrong here, i know we need a sound defence and not go all out crazy.

    My point is we are in a very good position in the league which in itself might show i am wrong here, however we seem a little too cautious- can we not now play HBA a little more, Jonas has done well but has not played as well as he can (tired?).

    Simpson is not my favorite player and i believe a shuffle with Santoon there and Raylor back to left back would be better.

    Cabaye is off the mood a little, maybe he needs pushing up a little further behind the two strikers….

    I am no football manager as you can tell, i dont have all the answers but i just hope in a few weeks time if we dont finish in ‘european place’ we can honestly say we did our best and could not have done anymore ie change the style of play.

    Hope this makes sense, i am not slagging our team off just want us to utalise ALL our attacking players before its too late.

  • 20 Oleg G // Mar 6, 2012 at 10:36 AM

    ArtyH // Mar 6, 2012 at 10:08 AM

    If we are aiming for a draw, which will probably be good for us after our not so good results and Arsenal’s amazing form in recent weeks (except that CL game), then at least lets go for a 1-1, 2-2 (4-4 :) ) sort of result. We have 2 great strikers who should be scoring. The fact that our scorer was Shola, and only in the 92nd minute, didn’t made me personally to feel good about our mid-front part of the team. We are a bit weak on the defensive side, but it didn’t look like we are trying to make up for it up front. We should be aiming to score against Arsenal, even if they score as well (because the possibility that they will not score is very low).

    The game against Arsenal is like against Spurs or Man C, these teams are looking to kill (unlike Man U, Liverpool or Chelsea for example).

    Arsenal had only 4 matches this season when they didn’t score a goal, and 2 of those 4 times were the first two games of the season when their team was playing very bad. So, we should be looking to score.

  • 21 NEWEXPATMAGPIE // Mar 6, 2012 at 10:39 AM

    Arsenal is a Monday evening fixture lads!

    Gonna have to wait till after the week-end~!

  • 22 danishmag // Mar 6, 2012 at 11:42 AM

    lads..
    Pardew will not drop Simmo!
    Forget it.. He has played ALL premier league games this season.. Only Krul has also done that! Colo and Jonas on 26 games..
    Not in a million years will he drop Simmo.
    Though i do concur with you all, on dropping him, it will not happen.
    And putting Raylor on left back facing Wallcott is not a good choice either, is it?!
    I do fear that our super star, Ben Arfa, will be back on the bench on monday.
    He is our best offensive player by far, but Pardew has not got the cojones to play him as he fears he will fall out of the game, as he does sometimes.. And 10 players against 11 Arsenal players on Emirates is not easy.
    I want Benny in the starting 11, but not to put Raylor on left back for Santon.
    Then Pardew should change the formation into 4-4-3
    Krul
    Simmo-Willo-Colo-Santon
    —–Raylor———Tioté—
    ————Cabaye———–
    Ben Arfa—–Ba—–Jonas

    Subs:
    Elliott
    Perch
    Guthrie
    Obertan
    Løvenkrands
    Shola
    Cissé

    But it will not happen.. Though a formation and tactical change is needed, as the form is not excactly good.. Shake the bottle, Pards.. Please

    howay the lads

  • 23 danishmag // Mar 6, 2012 at 11:45 AM

    by the way..
    Any links of Ben Arfa and his magic on the sunday game vs the unwashed?

    anyone..

  • 24 Owldman // Mar 6, 2012 at 12:32 PM

    We are hearing so much about the financial position of Rangers ,this should be a wake up call to all those clubs which care millons upon millions in debt.The American owners of Man U & Liverpool had to borrow hundreds of millions to buy these clubs the interest on these loans must be staggering.one default & they are in the same mess as Rangers.On two occasions Mike Ashley had to pay over 65 million to prevent Newcastle going into administration.It is the sword that is hanging over most of the clubs in the Pemiership.

  • 25 cupiddstunt // Mar 6, 2012 at 12:53 PM

    Owldman don’t let solano hear you saying we were in any kind of financial difficulties as he is fanatically adamant that we have never been in any threat of financial meltdown and MA has not saved the club from anything.

  • 26 voodoo85 // Mar 6, 2012 at 4:36 PM

    just wanted to clarify this article.

    is it the players saving money by only paying 26% on their pay which is classed as image-rights

    or

    is it the club saving as they have to pay inland revenue a tax on the players money also, and therefore the club saves money by only paying 26% instead of 50%

    ??

  • 27 lesh // Mar 6, 2012 at 5:03 PM

    Surely the expected profit will be the operating profit only – the club’s debts to Ashley can’t have been cleared yet?

  • 28 Crawfordladd17 // Mar 6, 2012 at 5:29 PM

    Image this as our next year team

    GK Krul
    RB Santon
    CB S.Taylor/Douglaus
    CB Coloccini
    LB Pieters
    CDM Tiote
    RM Elia
    LM Ben Arfa
    CAM Cabaye
    ST Cisse
    ST Ba

    Champions League?

    I who take next seasons aim as

    Premier League: 4th-7th again
    Europa League: Semi-Final or better
    FA Cup: Quarter Final or better
    Carling Cup:Semi Final or better

    Bring In a full back a centre back a right winger a centre midfielder(back up) and striker

  • 29 bills-son // Mar 6, 2012 at 6:19 PM

    Colo, STaylor, Guti and Krul have all shown that MA will reward established players with new contracts … and with Tiote MA showed he will quickly give a top performing new player an improved contract.

    That sends out a clear message – and a motivational one at that – to other players.

    It’s great to finally see MA getting csome credit on this forum – he might not be 100% perfect – but he is far far from being the 100% villain that many fans believed him to be (and were wound up by others to believe).

    Ashley has a plan and he knows exactly what he is doing and exactly what he is trying to achieve – and that is making our club a successful title challenging/Champs Lge qualifying team in the shortest time he can within the financial strategy he employs.

    If any fan, player or other club underestimates Ashley – watch out – because the guy will prove you wrong.

    Just ask Joey Barton for starters.

  • 30 solano // Mar 6, 2012 at 11:12 PM

    Owldman@24..”On two occasions Mike Ashley had to pay over 65 million to prevent Newcastle going into administration” Utter twaddle! Where is the evidence? No-one has documentary proof of this and it was something that only emerged after Derek Llambias replaced Chris Mort as MD. The club were quite happy dishing out lucrative contracts to Xisco, Smith and Gonzalez when this alleged meltdown was “imminent”. Any subsequent financial blackhole that may have emerged would largely be due to the total mismanagement of the club in 2008-9

  • 31 bills-son // Mar 7, 2012 at 5:39 AM

    Ashley has hardly put a foot wrong since he decided to keep the club after relegation. The Keegan, Wise, Kinnear and Xisco episofes were part of his learning curve and are now history. They have no impact on the present other than to fuel the type of constant backdated cynicism from the likes of solano – who no doubt has NEVER made a mistake (other than on this blog where he has proven to be the most erroneous doom ‘forecaster’ of all the Ashley haters+.

    Any NUFC fan who criticises Ashley needs to give himself a shake. Our club has been one of the most underachieving, spendthrift, trophy signing, inflated wage paying, disorganised, unstable, overpromisinbg, trophyless clubs the League has seen iover the last 57 years (the last time we won a domestic trophy – 1955 FA Cup).

    Under Ashley we finally have an owner who is totally focused, fiscally astute, ruthlessy determined, who is organising the club from tea lady, youth development to a brilliant transfer strategy which has secured top players for relative peanuts and a top 6 position. Fans should forget the past under Ashley and look at the now and the future. And the now and future is the brightest its been for a long time – and quite possibly the BRIGHTEST its ever been.

  • 32 Owldman // Mar 7, 2012 at 8:56 AM

    The info regarding Ashley saving the Toon from administration was written by a foreign sports journalist & quoted on Sportnow this source also quoted that following Toons relgation the the Bank holding the morgatage on St James Park chickened out so Newcastle paid of the balance of the mogatage.However not being able to check the books at Newcastle no one has any way of knowing the truth .Scrapman Freddie had left the club in an awful financial state! still paying wages & transfer fees for players who were no longer at the club.bills-son you are spot on .cupiddstunt would still be ranting at Ashley even if we were to win every trophy going.He just hates Ashley fullstop.

  • 33 solano // Mar 7, 2012 at 7:47 PM

    Threats issued to the clubs own fans by our MD, disaffected season ticket holders being moved without consultation, away ticket allocation cut backs, problems with direct debit schemes and increasing club membership fees are just some of the “everyday” issues tht crop up at fans’ meetings and are discussed on other forums.
    Add this to the pervading aura of being taken for granted, exploited and then add on the disregard for the name St James’ Park and the transformation of the stadium into a giant (and free) billboard and you may get an idea that all is not as rosy as the picture Bills and some others paint it.

  • 34 solano // Mar 7, 2012 at 7:51 PM

    Owld @32…so no documentary evidence, then? Just a repeat of speculation from a foreign based hack who chose to believe Derek Llambias…a “proven liar” in a court of law!




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