Magpies Halve The Wage Bill And Have A Much Better Side

It somehow seems against the Conservation of Energy.

Mike Ashley – excellent job of  Newcastle reducing wage bill

Matter cannot be created or destroyed – as I recall – but Newcastle have done something which is really weird – they have more than halved their wage bill and yet are challenging for a top four position in the Premier League.

The news is in the ESPN Magazine’s Global Salary Report, and Newcastle’s total wage bill is now a lot lower than we thought it was.

For all sports teams, including football, baseball, basketballand the like, Newcastle are in 127th place and last year we were in 63rd place,  in the table of  total wages per player the teams pay out.

Here’s the table of the top 11 teams, and Newcastle who are on the bottom row, were in 127th place.

Position and
Team
Average Yearly
Wage
Percentage
Change
Total Wage Bill
1. Barcelona $8,680,56910$217,014,221
2. Real Madrid $7,796,6376$194,915,932
3. Manchester City $7,403,75426$185,093,858
4. Chelsea $6,795,89913$169,897,463
5. Los Angeles Lakers$6,278,088-4$87,893,233
6. New York Yankees $6,186,322-8 $197,962,289
7. AC Milan$6,104,7698$152,619,219
8. Bayern Munich$5,907,6522$170,231,332
9. Philadelphia Phillies$5,817,9651$174,538,938
10. Internazionale$5,700,915-5$142,522,871
11. Manchester United $5,521,4236$138,035,567
127. Newcastle $2,239,808-34$55,995,199

The figures are in US $ but multiple by about 0.62 to get UK pounds.

So Newcastle’s average wages per player are £1,388,680 and the total wage bill for this year is £34,717.023, and when you consider the wage bill when we were relegated back in May of 2009 was a massive £74M, that’s a huge decrease in Newcastle’s wages.

It also shows that Newcastle were able to cut their wage bill in the last year by 34%, just over a third – unbelievable.

And with Newcastle’s revenue around £89M the wages are about 38% of revenue and that’s very low, and at the moment Manchester City’s wage bill exceeds their total revenues – so no wonder they lost £197M in the last financial year.

And it helps to explain just how well Newcastle are getting their financials in order.

This is all good new,s because Newcastle have a top side and they are not paying big wages (yet), although the wage bill will increase as Newcastle become a regular member of the Premier League top four – if Newcastle become a regular member of the Premier League top four.

Newcastle will be a poster child for how to get your finances under control, and also how to build a top team without spending huge transfer fees,  like clubs like Manchester City and Liverpool have done – to name but two.

And as Newcastle’s revenues increase, with European competition etc – the plan is to keep Newcastle on an even keel, and any  profits will be poured back into the  Newcastle coffers.

That’s according to Derek Llambias, so increased revenues mean that the wage bill can go higher, and we can bring in better players.

Whether you love or hate owner Mike Ashley – you have to admit it’s all working beautifully at the moment.

Comments welcome.