This Is How Newcastle Do Business – Other Clubs Could Take Note


Newcastle issued their financial results for the year ended June, 2011 today, and it made for some positive reading.

Derek Llambias – very good financial results

The previous year was through June of 2010, so remember Newcastle were in the Championship that year, so they are not much better this last financial year for one big reason that Newcastle were back in the Premier League.

Their revenues  from TV tripled last year compared to the previous year, and total revenues (turnover)  increased to £88.4M from £52.4M and the losses decreased to £3.9M from £33.5M  the previous year.

We put out a report earlier today on the figures and discussed them and included graphs of the revenues and losses over the last four financial years, and it makes for some positive reading and some good trends.

It’s not surprising that Derek LLambias has come out and talked even more about the figures and how Newcastle have put their financial house in order, while still improving the playing quality of the side.

We are currently 6th top of the Premier League – which is an excellent achievement – so far this season, and we just hope we can keep it up over the last 11 games of the season.

This is what LLambais had to say on a wide range of issues:

“If Mike had not come in at that time, the club would have been in dire, dire trouble.” “It would have been another Portsmouth – maybe worse, because it is so big, it is such a big club.”  “Our model is working, and we have not downgraded the team.”

“We never want to waste the club’s money – the fans’ money. No crazy salaries like they had before.”  “Hopefully we are now being the custodians that we are meant to be. It would be lovely if we were all hand in hand – the club and the fans.”

“The owner doesn’t take a penny out, but that’s what people don’t believe. These figures show he doesn’t.”  “We’re getting over the bad parts. We have apologised for the mistakes. We did make mistakes that were naive and for a combination of factors.”

“Now we’ve got full control of the direction. We’re going to get there, in a very responsible way, without endangering the future of the club.”  “The divide shown by some of these financial figures is huge.” “We are punching above our weight at the moment. “

“You look at some of those figures and you wonder how are they going to survive.”  “Can the owners just keep pumping money in? Maybe some of the foreign ones can, but I’m not sure about the UK-based owners.” “The tradition and the history will still be there.”

“It’ll be fantastic if we can bring a trophy to the club. That would give us a feeling of, ‘It worked.’”  “We’ve got a manager hungry for a trophy, a team that we’re building, staff and players on long-term contracts, and we’re investing in the future.” “It’s been an exceptional season.”

“Now it’s a case of pushing forward. This season we targeted tenth or above. Next season it was going to be eighth.”  “We just do straight contracts. We do no overseas pensions, no image rights. We say, ‘This is your money, now you go away and talk to your tax advisers if you must.’ “

““We don’t do goal bonuses. We had that with Martins, maybe that’s why he would always shoot from the halfway line!”  “We used to see him on the ball and think, ‘Oh look. He’s going to shoot again.'” “We’ve taken all that stuff out. We know exactly where we are.” “We do have team bonuses for success, in terms of positions.”

“We would like to see deferred transfer payments phased out, so that you just pay for a transfer over a year.” “Why pay for it over five years? Most do it.” “We prefer to pay it over a short period of time. This was put to the Premer League board in 2010 and was rejected by everybody.”

“We are saying it should be discussed. You shouldn’t be spending money you haven’t got. It’s not the right way to behave.” “And look at the taxman. Why is the taxman giving clubs so long to pay their tax bills? For instance, VAT – it should be paid on the dot. It’s a crazy way of running a business.”

“And is the creditors rule right in football? Footballers are getting paid, but the local tradesmen who have done work for the club aren’t and it is costing jobs.”

That’s interesting about not giving bonuses for goals, so the Demba Ba is not incented that way – hopefully the club will renew the Senegal striker’s contract before the summer, so we have a decent chance of keeping him at the club.

Newcastle also pay for their transfers up front in full, and  in cool cash, and that’s news about trying to get the Premier League Board in 2010 to be the way transfer business is conducted by all clubs.

It certainly would help those clubs who vastly pay out money they simply don’t have, and not end up in bankruptcy as we have seen recently with Glasgow Rangers and Portsmouth – among others.

If Mike Ashley was going to invest around £300M into a project to make money,  he could have found much better investments than in a football club – it’s very hard to make money in sports.

Ashley has loaned the Newcastle club £140M over the last few years, and it doesn’t seem like he wants repaid anytime soon, and of course he’s not getting any interest from that loan.

So at least financially Ashley and LLambias have done very well since we were relegated – there’s no doubt about that.

We only wish they would try much harder to get a better and improved relationship with the Newcastle fans, who still distrust the two of them and their motives.

But there’s no doubt that Newcastle United are coming back both on and off the field – and that has  got to be good.

Very good.

Howay The lads!!



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