Newcastle’s financial outlook is good, and in fact it’s very good, it we can stay in the Premier League, although we are told by Joe Kinnear and Alan Pardew at frequent intervals that we cannot compete with the likes of Manchester United, and that’s true, but with the new three-year Premier league deal, Newcastle should see increases in both our revenues and profits in the next few years.
Mike Ashley and Joe Kinnear at Newcastle
It didn’t help us at all that we were relegated in 2009, and you can see how that hit Newcastle revenues with this following chart showing the revenues over the last five years.
And by thrift financial controls – sometime severe - Newcastle have managed to become profitable in the last financial year we have figures for – it’s a small profit of only £1.4M but a profit nonetheless, and shows Newcastle have their costs under control.
And notice in the relegation season we actually reduced our losses from the previous year, even though the revenues went down by about £34M.
We are short on commercial revenues as we are told constantly, but it would help if Mike Ashley’s company Sports Direct, would pay for all the advertising we see around St. James’ Park, and in fact not paying for that advertising would not be legal over here in the US.
But the point we want to make is that with the new Premier League TV deal – clubs now get anywhere between £60M and £100M come the end of the season in May – and the actual amount depends on various things such as league position and how many times the club has been shown on TV, amongst other measurements.
That’s an average of £80M, and in the previous TV deal, the clubs were paid anywhere between £40M and £60M, which is an average of £50M.
So on average each Premier League club will get an extra £30M a year because of the new TV deal.
If Newcastle can keep their costs under control, and why would we not be able to do that (?), then that’s an extra £30M at the top line, and that will flow right down to the bottom line – the profit.
So while admittedly it’s a simple way to look at this, the extra TV money should see Newcastle’ profits increase in the 20013-1014 financial year, and remember we still don’t have the figures for the financial year that ended on June 30th of this year, and those figures should be good.
If Mike Ashley will pledge to put all profits back into the club, which Derek LLambias kept saying was always the plan, we should be in very good shape financially, and yes we still can’t compete with the Manchester Uniteds of this world, but we will still become a richer club than we are at the moment.
We’re the 20th richest club in the world today and we should move up that league table in the next few years.
We think that’s good news.
Ian Begg is a reader who recently found out that his Mom was very ill, and he has to return to Australia. Ian has a Platinum Club season ticket that has £700 left on it, and he is willing to sell it for £550 or a best offer.
Please see if you can help Ian out, and you can contact him by email at email@example.com – thanks.
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