Newcastle United made the top 20 list of the world’s richest football clubs for the first time in three years last season, and we had reported revenues of £93.3M – ending on June 30th – but that is still below the revenues Newcastle were making when Bobby Robson was manager and Freddy Shepherd was running the club, when revenues were around £100M – and that’s over ten years ago.
Freddy Shepherd – higher revenues when Freddy ran the club
Although we also had over £100M in debt which Ashley inherited
And when you take a closer look at the Deloitte report there are some revelations on the finances – and one is that Newcastle’s income from commercial side of the business is very poor, and the Deloitte Football Money league report showed 59% of Newcastle’s total revenue came from broadcasting, while 26% came from match day sales and a meager 15% from commercial opportunities.
Gerald Krasner was once Chairman of Leeds United, and is now a partner in a Management Consultancy firm in Newcastle, and he is quoted in the Evening Chronicle today:
“If Newcastle dropped out of the Premier League, it would be a catastrophe for them financially.” “I don’t think it will happen this season though.” “Fans do matter, but not as much as they think.”
“They create the atmosphere for broadcasting.” “I’m sure the club is maximizing the potential for match day and commercial revenue.” “If you get the performance on the field right, then the rest follows.”
We’ve always thought if a side is successful on the field, then the finances tend to follow the success and increase – as Gerald points out.
But with almost 60% of revues coming from the broadcasting of Newcastle’s games, a relegation would be a complete and utter catastrophe for Newcastle – which is why we’ve seen owner Mike Ashley get involved personally and brought in five good players into the club this month – so far.
The task Mike Ashley has ahead is to raise the commercial income of the club, and we suppose the deal with Wonga – for the shirt sponsor deal – said to be worth £24M over the next four years will help – but that’s still chicken-feed compared with what top English clubs make on their shirt deals.
For example Nike pays Manchester United around 23.3M per year on their long-term shirt deal with the club, which is over four times what Newcastle are getting from Wonga – and that’s just one example.
However, it’s also the best deal Newcastle have got on any shirt deal – according to managing Director Derek LLambias.
In order to return to making big money again – the number one goal has to be that Newcastle have a good (great) team – that competes in the Premier League top six every season – including next season, and battles for a place in Europe.
That was the goal at the beginning of this season, and for a number of reasons we have failed miserably so far, but with five good players now into the club this month – the future at least looks a little brighter than it did at the end of last year.
Hope springs eternal for Newcastle.
Howay The Lads!!
You can also reach Ed at firstname.lastname@example.org