Derek LLambias has given some exclusive interviews today to the Newcastle Journal, and he talks about some of the financial plans in place for the club – and that there has an effort to keep the wages to revenue (turnover) percentage at or below 60% – it was around 75% when we were relegated – and Newcastle are ploughing any profits the club makes – right back into the club.
Mike Ashley and Derek LLambias – Looks like we just conceded a goal
We’ve always thought that running Newcastle essentially as a non profit club – profits are ploughed back – is a big deal – but it’s received very little publicity.
And of course you wouldn’t believe the goal is to invest any profits back into the club, since some fans have accused Mike of actually taking money out of the club – big money out of the club – but that hasn’t happened.
The facts are that for a number of years now any profits are put right back into the club’s coffers – it’s just that we haven’t had any profits.
But in the last financial year we lost only £3.9M – so it wouldn’t be a surprise if Newcastle start generating profits from now on, especially with the new shirts deal from Wonga kicking in next season, and the increased revenues from the Premier League TV rights starting next season.
This is what Llambias said in the Journal today:
“We have always had a target with salary to turnover and we stay within that – that’s why you lose one or two deals occasionally. Once you break those fundamental rules it’s very difficult. Where do you stop? Where does that level of salary stop? Our wages are 64% of our turnover at the moment. That will go down because we will get more money in next year.” “The commercial deals will boost our income and the new Premier League TV money.”
“What we have done is take it up to our figure for next year now, so there will be a slight blip because we’ve brought in more players than we were anticipating. But next year we will be spot on.” “Of course, there are exceptions. If Lionel Messi suddenly said he wanted to live in the North East then we’d say absolutely!”
“But seriously, there’s a reality to it. It’s a question of us sticking to our guidelines – that’s where we are.” “ ‘This is our model, we’re going to do this and we’re going to stick to it’. “For us it’s about building. Stability is massive for this club – it has to have stability.” “We don’t take any money out of the club and whatever it generates goes back into the club.”
As we get more successful and get more money into the club, then we’ll have more money to spend on things like new players, and also maybe we’ll finally get that St. James’ Park expansion, so the capacity becomes just over 60,000 – and that will help generate higher match day revenues – so these things tend to build on themselves.
And we’re surprised some questions weren’t put to Llambias about the UEFA Financial Fair Play rules, with Newcastle seeming to be in very good shape, and a few months ago the Premier League clubs agreed to their own financial plans that will balance the book of Premier League clubs – so it would have been interesting to know some of the details of those plans – and what the time-frame is.
And only last week UEFA has warned clubs – including two English clubs though to be Chelsea and Manchester City (that’s a surprise) – to get their financial houses in order – with the goal to have balanced books in a couple of years.
But from what Derek LLambias has said yesterday and today – it looks like there will be some good times ahead for Newcastle – and who knows – we may actually win something shortly – for the first time since 1969.
Now there’s a thought.
You can also reach Ed at firstname.lastname@example.org