What Will Newcastle Do With The Extra Money Coming In?

With Newcastle now in the Europa League next season almost a certainty, Newcastle will be bringing in a lot more money next season.

Mike Ashley – expect owner to remain thrifty

That will help the revenues, and it could be that in the financial year through June of next year, the club could break the £100M revenue target.

There is a good interview in the Newcastle Journal today with Vinay Bedi, of  investment management firm Brewin Dolphin, and he talks about the impact European football will have on Newcastle, and especially if Newcastle can qualify for the Champions League:

“The premise of football is Champions League gets you everywhere and the rest are nowhere,”   “If you can consistently be in that group it completely changes the whole perspective of the business.”

“Even just a one-off visit is very nice. It really does just kick on the whole football club and bring in some serious amounts of revenue.”  “If you can get there and get a couple of wins in the group stages you are talking about substantial amounts of money.”

“It is £600K for a win in the group stages – and that is just prize money.”  “Newcastle will actually make more money from winning a couple of games than if they win the Europa League, which is a sobering statistic. It is a massive, massive difference.”

“Rangers made something in the region of £17.5M by making it through to the group stages a couple of years ago.” “Now with Newcastle and the potential for full houses, it is realistic to say they could make £20M  by qualifying for the group stages and winning even one or two games.”

So if we make the Champions League it looks like it could be £20M or so, and that’s almost 25% of the revenues reported for the last financial year.

Newcastle will want to keep to their financial thrifty ways, and not go back into making trophy signings like we used to do under Freddy Shepherd, when lots of money was simply wasted in the transfer market and on players’ excessive wages.

That will not happen under Ashley,  but nevertheless there are new dangers for Newcastle, as Beday explains:

“Newcastle, like any club, have got to be extremely careful,” “I bow to the knowledge of my friends who are Newcastle supporters who say they would need to strengthen their squad if they were to get into the Champions League but practically, that creates issues.”

“There is the burden of extra wages and of course, Leeds managed to bankrupt themselves signing players with money they thought would be coming in from the Champions League.”  “It looks as though Mike Ashley is running things prudently though, so I would not see that as a problem.”

Newcastle need to remain prudent, but also they will have more money available in the summer transfer window, and will need to bring in more players than they had initially planned.

That will happen, and if necessary players could come in during next January, if the right player(s) are available at that time.

But with the extra money coming in Newcastle will have more to spend, as the Newcastle plans seem to be to invest all profits  back into the club, and if we continue to be successful then Newcastle will become a richer club and be able o afford better players.

But we know that Mike Ashley will remain thrifty, and it today’s financial picture in football, with clubs like Glasgow Rangers still managing to go bankrupt, that’s a  good thing.

What do you think?

Comments welcome.

18 comments so far

  • ~Perchinho the Pheonix~

    Apr 17, 2012 at 10:23 AM

    Comment #1

    They will invest it wisely.

  • Pardew's fist pump

    Apr 17, 2012 at 10:35 AM

    Comment #2

    Not to mention the extra prize money from final league position compared with last year, which if we did finish 4th, would be 7.2m, then of course there’s stadium naming rights to be sold, which would be far more prestigious if we’re being beamed around Europe regularly.

    Revenue could be up in total by about 35m, if we make CL.

  • klenja

    Apr 17, 2012 at 10:38 AM

    Comment #3

    we are almost in europe but quite people………..keep your feet on the ground…….the last thing we would want is to get carried away

  • toonincheek

    Apr 17, 2012 at 10:44 AM

    Comment #4

    “Stadium naming rights” – ha ha.

  • Pardew's fist pump

    Apr 17, 2012 at 10:46 AM

    Comment #5

    Oooo we have a skeptic on our hands, how edgy and cool.

  • markmac

    Apr 17, 2012 at 10:51 AM

    Comment #6

    Im sure we will spend wisely again, the fact were in europe should just make it that a little easier to tempt ”better” players to SJP

  • wynsleap

    Apr 17, 2012 at 10:56 AM

    Comment #7

    toonincheek @ 4 is right to laugh.
    If we get into Europe (and especially the Champions League), Ashley will be salivating at the thought of having his name all over the stadium and beaming out throughout Europe.
    I’m afraid no one will be paying for the privilege of “stadium naming rights” and especially not our owner.

  • LooneyToon41

    Apr 17, 2012 at 11:41 AM

    Comment #8

    Word of realism. Finishing 4th only allows us into the playoff for Champions League Qualification. Remember Everton lost this playoff a few years ago! (if my memory is correct). So until those 2 games have finished, and we have qualified, we would be stupid to spend money we haven’t got. I’m not sure of the dates involved v transfer window closing. And with our new policy of paying transfer fees upfront, and demanding transfer payments upfront, i can’t see us going beyond our current budget for the summer, which i imagine has already been allocated subject to final league position.

  • ToonHeart

    Apr 17, 2012 at 12:18 PM

    Comment #9

    With the quality we bought in for very little money from all the scouting gang at NUFC I can’t see it being a problem.
    Our scouting network really is wesome and we could have one hell of a team in a few years with not so much spent on players like some clubs!!

  • numba9

    Apr 17, 2012 at 12:57 PM

    Comment #10

    we look like we will be in at least the europa league next season so to appease fans and to prove his worth to us he should be going back to the RIGHT and PROPER name of our ground, YOUR MOVE ASHLEY!!!!!

  • mondziu

    Apr 17, 2012 at 2:22 PM

    Comment #11

    No Vertonghen, no Hazard, no marquee signings, please don’t expect us to sign players with wide European recognition as there is no need to appoint Graham Carr to sign those.

    What I would ABSOLUTELY LOVE is the extra money spent on strenghtening the squad, quality- and quantity-wise WITHOUT the need to sell any of our current crop of stars.

    Prices in EPL are inflated by the Chelseas and ManCitys and we would only sell here. I don’t expect A.Johnson or D.Hoilett to join us because they will get silly money elsewhere.

    French, Dutch and German markets offer more value for money and Mr. Carr puts a lot of effort to identify players able to adapt to the EPL, so I fully expect the club to follow their initial plan and not get carried away and spend money we do not really have.

    Having said that I would love to see at least one ‘Papiss Cisse’ signing – top player for reasonable price. Wonder what price will Radja Nainggoolan command when he leaves Cagliari in the summer. Basicly he’s a Belgian Tiote, very energetic player, youtube him.

  • BarcelonaMag

    Apr 17, 2012 at 2:37 PM

    Comment #12

    Isn’t it true that finshing fifth would mean that we’d still have to get through a qualifying round in order to play in the Europa League proper?

  • Sav

    Apr 17, 2012 at 3:33 PM

    Comment #13

    Trouble is, mondziu, that our financial plan is exactly that – sell high to the traditionally spenthrift clubs whose only ambition is winning in the hope of unearthing another diamond in the rough. It is a risky strategy from a ‘wiinning stuff’ standpoint, but not as a business model. Of course, the risk is that you will fail to unearth the next gem of a player and slip in the rankings. But if that is not your main priority, its a good system. But we WILL continue to sell for good money because there are Chelseas, manCitys and big Euro clubs who will pay over the odds for what they perceive to be guaranteed success.

  • Sav

    Apr 17, 2012 at 3:35 PM

    Comment #14

    …,in the hope that WE will unearth another diamond…

  • LooneyToon41

    Apr 17, 2012 at 4:20 PM

    Comment #15

    @Sav. Exactly right mate. We haven’t got the revenues of the so called ‘top six’ , and certainly can’t compete with Man City/Chelsea on the spending front. Unfortunately, by default, that makes us a selling club.
    Only 2 things can change that.
    1) Big increase in revenues via continual Champions League participation, & other Commercial revenues (eg, ouch renaming of our ground)
    2) UEFA Financial Fair Play rules having backbone and stopping BIG spending.

  • mondziu

    Apr 17, 2012 at 5:14 PM

    Comment #16

    @Sav and @LooneyToon41

    That’s precisely my point – I want the club to do what they always planned on, bring bargains BUT not sell the stars thanks to the aforementioned EXTRA money from Europe and high league position. That would be enough for me this summer. If we could repeat our success in the EPL next year, then perhaps stable increase in revenue would allow us to alter our businness model a little and challenge for a trophy.

  • 9

    Apr 17, 2012 at 5:58 PM

    Comment #17

    We can’t avoid selling, as other clubs offer MUCH bigger wages than we do, and we are quite right on that count. We’ve tried the big wages tactic, it was a disaster, and you know for a fact the owner won’t contemplate it for a nanosecond, so, undoubtedly, players perceived as stars will go (naturally) where they can double and more their income. So would you, given the chance, and so would I.

  • DoctorZelig

    Apr 17, 2012 at 10:23 PM

    Comment #18

    Ed’s writes and I quote: “With Newcastle now in the Europa League next season almost a certainty, Newcastle will be bringing in a lot more money next season.”

    That is unfortunately not correct. Europa League is more prestige then money. I would argue that if you calculate the extra players needed to play the many more games into the equation, Europa League is probably not a good business case for our club…

    The EPL is a much more prestigious, and remember that of the players we sign in the smaller leagues most of them have already played in the Europa League. They come here to play in the EPL.

    Now the Champions League, that’s an entirely different story 🙂


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