Why Commercial Revenue Is So Important To Newcastle


When the Newcastle’s financial results were released yesterday there was a statement issued by the Newcastle Board, and it’s worthwhile looking at what was said.

mike ashley

Mike Ashley – Newcastle owner

This is what Newcastle’s Board said then the impressive results for the financial year through last June 30th were released:

“As supporters will be aware, finances are a significant issue for all football clubs given the introduction of Financial Fair Play into the Premier League in addition to UEFA’s Regulations.”

“Complying with FFP continues to be a key influence on strategy and something we have been working hard at over a number of years.”

“Everyone at this club wants to finish as high up the Barclays Premier League table as they possibly can. If the club can sustain itself as a ‘top ten’ team year-on-year with a stable structure and the right finances, it gives itself every chance of pushing even further.”

“Matchday and commercial revenue is a key driver because that’s where the Club can compete with – and outperform – its competitors to enhance its spending capabilities.”

“Ultimately the income the Club generates, particularly, given the restrictions of the Premier League FFP Rules, from match day, commercial i.e. non-TV income, will directly impact on the strength and quality on the pitch.”

“The process requires patience but we remain absolutely committed to growing the Club in a responsible and sustainable way.”

The key statements there as far as we are concerned are the following:

“If the club can sustain itself as a ‘top ten’ team year-on-year with a stable structure and the right finances, it gives itself every chance of pushing even further.”

“Matchday and commercial revenue is a key driver because that’s where the Club can compete with – and outperform – its competitors to enhance its spending capabilities.”

So Newcastle are still talking about being a top ten club, but if we do well we could do even better than that – but that isn’t very aggressive or very ambitious.

The Board are being very conservative – probably so as not to raise Newcastle fans’ expectations.

And the point about commercial revenue is that’s the area where Newcastle are lagging behind the top clubs in Europe, and if we are going to compete, we have to raise that significantly from the £17.1M it was last year.

Of course every place now in the Premier League is worth around £2M and we could get around £80M for finishing around 9th place in the league, and that would be better than 11 other Premier League clubs.

And our revenues from match days are good at around £27.8M, and that’s a £3.9M increase from the £23.9M recorded in the previous year – presumably because of the extra seven Europa league games.

As an example of commercial revenue, PSG signed a deal to get €200M a year from the Qatar Tourism Authority, and it’s a four-year deal and isn’t it interesting the new owners who bought the club in July of 2011, are from Qatar.

That’s about 12 times what Newcastle made in commercial revenue last year – and of course those PSG sponsorships should be looked into – because they are nowhere near market rates – but they will allow PSG to spend big money in the transfer market, and on players’ wages – and meet the Financial Fair Play rules.

That doesn’t sound like fair play to us – but the point is that Newcastle need to increase their commercial revenues big time if we are to compete with the top clubs in Europe – it is becoming a huge differentiator, and Newcastle have fallen behind.

The Premier League clubs including Newcastle do have a big advantage over European clubs, because of the huge PL revenues being handed out to English clubs.,

They are anywhere from £60M to £100M each year – but of course that doesn’t help us against the English clubs, and we have to compete with them – if we are to regularly compete in Europe.

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74 comments so far

  • manxpie

    Feb 26, 2014 at 12:57 AM

    Comment #1

    if we made 10 million last season we should easily at least make 40- 80 mill this year no doubt!!!

    so i’m hoping that the club knows under “this new fair play rules” thing that they get a pass into the champions league for showing such great finances!!
    otherwise its pointless when you aint spending it!!

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  • Shot Bru

    Feb 26, 2014 at 1:00 AM

    Comment #2

    Whatever the financial state of play at the club..the simple fact of the matter is that Ashley needs to invest in some of his own players…preferably buy some players that can score goals…

    The last time any player we currently own, that scored a goal for us, was against Stoke on Boxing Day!!!

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  • spitfire_

    Feb 26, 2014 at 1:01 AM

    Comment #3

    It isn’t so important… otherwise SD would pay for all commercial panels.

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  • Shot Bru

    Feb 26, 2014 at 1:01 AM

    Comment #4

    In a league match that is..

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  • beefman13

    Feb 26, 2014 at 1:02 AM

    Comment #5

    These are some of the reasons MA is distrusted so much, its underhand tactics and cloak and dagger stuff that gets all our backs up.

    He loaned the club as he says (his club?) 129 million, interest free? not for our benefit but for his, he had the means to do it, it saved him a small fortune, he was just protecting his purchase, the club make it sound like he did us a massive favour, due dilligence wasnt done Mike thats why you had to put your hand in your own pocket for your club which U own.

    Its a bloody cheek therefore saying oh well im giving you`s an interest free loan so i will treat myself to an estimated 10 million a year in free advertising for SD, totally bang out of order, you bought the club lad, you gave yourself an interest free loan dont make out that you are doing us a favor, you are just protecting yourself, because u can financially, its such a crappy stroke to pull, its always all about protecting your investment Mike, and you bloody well know it.

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  • ToonDarnSarf

    Feb 26, 2014 at 1:02 AM

    Comment #6

    Roy

    Yes of course the money goes to the club when you buy an official shirt. SD are an official partner of NUFC and get paid for warehousing and other things involved in the sale of merchandise like any outsourced partner would but the profit goes to NUFC. Please ignore any ridiculous statements saying otherwise.

    As for the suggestion to buy an illegal one…that sounds great…if you want your money to indirectly fund drug dealers, sex traffickers and the like.

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  • Blofal

    Feb 26, 2014 at 1:07 AM

    Comment #7

    I am a little worried that the TV money will go directly into paying off Ashley’s loan.

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  • Roy

    Feb 26, 2014 at 1:08 AM

    Comment #8

    TDS

    Thanks for the reply, I feel better now.

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  • Blofal

    Feb 26, 2014 at 1:08 AM

    Comment #9

    Then again the free advertising he is getting for Sports Direct he may not be actively trying to pay off the loan.

    Which begs the question how long does Sports Direct get to advertise around the ground for free until the loan is deemed paid off?

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  • manxpie

    Feb 26, 2014 at 1:14 AM

    Comment #10

    mr tuff from last post
    what annoys me even more that share holders that have absolutely nothing to do with this club are making money from it!
    nothing!!
    who in these “meetings” get the right to ask the questions!!
    are they dunces or wat?

    1 simple question is ” as you are sole owner of this club as mike ashley! why has a company like sports direct had free advertising? and then you ask and expect other companies to pay premium to do the same?

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  • Shot Bru

    Feb 26, 2014 at 1:15 AM

    Comment #11

    Of course it will Blofal…just like they say match day revenue is ‘a key driver in enhancing the clubs spending capabilities’
    Sounds like a veiled threat to the fans who are considering not renewing season tickets etc.
    If you don’t turn up to the matches…don’t expect us to be any more ambitious..

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  • Mister Tuff

    Feb 26, 2014 at 1:23 AM

    Comment #12

    Roy @8-you should not feel better. Here’s why.
    At a previous forum meeting a question had been asked about a “mystery” payment of nearly £0.5 million being paid from NUFC to SD.
    The club explained it was for the purchase of shirts -and went on to say that they (SD) had, because of their size, better purchasing power and that their wharehousing/transport would reduce costs to NUFC.
    This indeed may be true but I think it is correct that no-one has seen any evidence of any monies (specifically for shirt sales) coming back in the other direction -from SD to NUFC.
    It may well be above board – can we assume that NUFC/SD would never contemplate telling misleading stories about this process.

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  • ONLINE GUY

    Feb 26, 2014 at 1:29 AM

    Comment #13

    A football club is a great commodity to own if you want to show the taxman a tax loss ..

    I’m starting to wonder why we still exist as a football club

    Thinking of going back to watching Non League .

    We don’t go out to win any cup’s in a serious attempt to gain Silverware…that’s a given

    And we are never going to win the league while Ashley remains as owner ..anyone care to refute that ?

    Words that seem apt right now are the following ..

    Rot
    Stagnant
    Dormant
    No Ambition
    Apathy … that’s all there is under Ashley. We are one massive advertising hoarding ..the ground is embarrassing with sports direct signs

    And I dont much care what figures you bandie about I say that the interest on his so called trick loan is less than we would get if we tendered the advertising out to various ..

    Before I get any smart arse Bas8ards coming back at me here’s one for you . V.

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  • ONLINE GUY

    Feb 26, 2014 at 1:34 AM

    Comment #14

    I’v reported myself to ED ..night all !

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  • manxpie

    Feb 26, 2014 at 1:35 AM

    Comment #15

    tuff you’ve fed a troll ffs!!!!

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  • Mister Tuff

    Feb 26, 2014 at 1:35 AM

    Comment #16

    manx – the trouble is there is now an air of distrust, including financial distrust about the club.
    Is the club really benefitting from Mr Tubbs stewardship or is Mr Tubbs or even SD benefitting at the expense of the club.
    What is the true worth of the advertising -does it cover Mr Tubbs interest on the loan.
    A few weeks ago I was having a look at the number of companies owned by Mr Tubbs – I got sick and stopped counting at over a hundred companies. To unravel all the finances involved could not be done by you or I – it would take a team of forensic accountants – I say that on the basis that I was a financial fraud investigator until recently. The whole set up has a whiff of skulduggery about it.

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  • Shot Bru

    Feb 26, 2014 at 1:37 AM

    Comment #17

    Online Guy….junior and non league football is where it’s at….youngster playing with freedom and ambition and ordinary blokes playing for each other and their club without any of the politics…and ultimately playing for the pure enjoyment of the game…

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  • Mister Tuff

    Feb 26, 2014 at 1:37 AM

    Comment #18

    manx -who!

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  • ONLINE GUY

    Feb 26, 2014 at 1:41 AM

    Comment #19

    Shot bru …your spot on there ..its done for the love of it ..and I played non league later on meself

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  • ONLINE GUY

    Feb 26, 2014 at 1:42 AM

    Comment #20

    Morning Tuff , hope your well Sir !

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  • Mister Tuff

    Feb 26, 2014 at 1:48 AM

    Comment #21

    Online -morning hows’ things with yourself.
    Did you mention last week that you were going for a pint in the Blackbird. Used to get in there many years ago when I was a student at Northumberland College – a long time ago.

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  • manxpie

    Feb 26, 2014 at 1:50 AM

    Comment #22

    tuff well i won’t pretend i’m a numbers man because i’m a dyslexic mathematician
    but the club is benefiting with this frugal spending on face value and as a prem club it’s doin very well and probably 1 of the best in the league financially
    but the debt and with this owner it ain’t gonna change especially when he realises that he can make between 60-80 mill a year in the hardest business to make money in history

    he’ll love that!!but hey at least we’ve got competent people to ask the right questions at these questions!!!!!!! 🙂

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  • Whereisboumsong

    Feb 26, 2014 at 1:55 AM

    Comment #23

    So, We had 10m profit last year.

    This year we’ll have :
    – 10m profit
    – 20m from Cabaye
    – another 10-20m from TV rights
    – from league position (9th) we’ll get 7*800k (last year 16th)

    That’s 45-55m profit. So half of the Ashley’s loan will be paid.

    Then, imagine, Ashley cashing his investement and selling:
    – Tiote 20m
    – Krul 10m
    – Santon 8m
    – Cisse 6m
    – HBA 8m

    You think last year was gambling with no acquisition? Or maybe this one? Dont want to be gloom and doom as everyone in here is but next season might be gambling. We’ll be with no striker, no goalkeeper, shit midfield. We’ll stay in the league? thats great. If not we’ll buy 5-6 players in January to secure investement and move on.

    Another scenario is that he’ll cash profits and sell the club for 250m and that would be around (?) 100m for him. Jesus, this guy is natural bussinessman.

    The club might be gold mine for (not so) big mike…

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  • ONLINE GUY

    Feb 26, 2014 at 1:55 AM

    Comment #24

    Aye Tuff..Always get a few players in ..Shearer gets in if ever you want to have a chat with him …

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  • manxpie

    Feb 26, 2014 at 1:55 AM

    Comment #25

    i might be wrong and jumped to conclusions but roy sounds like mag n the rest lol so apologise roy unless you are a troll

    we’ll see i’m sure!!

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  • ONLINE GUY

    Feb 26, 2014 at 1:57 AM

    Comment #26

    Morning Manx ..Right I’m off to Kip Lad’s thanks for the fun ! all best to all……….. night.

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  • manxpie

    Feb 26, 2014 at 1:59 AM

    Comment #27

    wonder why tads only posted one post and never replied?
    never see him at night unless its match day
    shame really
    same with sage would make a big difference to night postings!

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  • Mister Tuff

    Feb 26, 2014 at 2:00 AM

    Comment #28

    manx – I was reading Mr Tubbs statement last week which he produced in September 2008 when he talked about the club and that he wanted to sell it after being threatened etc etc. Even though there have apparently been no offers I think Mr Tubbs now finds himself potentially in a situation that he can now make money from the club -viz the TV dosh -as can other owners. So at a minimal outlay -to assure PL survival – he can clear his debt in 2/3/4 years. Totally different situation now compared to when he made the statement in 2008. The goose that laid the golden egg has arrived in football.

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  • Mister Tuff

    Feb 26, 2014 at 2:01 AM

    Comment #29

    Online – live too far away now.

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  • manxpie

    Feb 26, 2014 at 2:13 AM

    Comment #30

    tuff i hope to god he does!!
    i seen on here someone said that fulham sold for 200 mill!!

    so if he proves the business model (profit making) as well as taking the debt back surely where a prime “product”

    but that doesn’t excite me either tbh!
    mike ashley was the perfect play thing for us until he realised the huge debt!
    and that annoys me and thats also down to the last owners who made 40 mill!

    before i die i hope we get an owner that looks after the club aswell as the thousands upon thousands of supporters that make this club!

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  • Mister Tuff

    Feb 26, 2014 at 2:24 AM

    Comment #31

    manx – it could be argued now that the club is more saleable -everybody knows that there is mega TV dosh available each season -the club pays for itself so either way looks like a win win situation for Tubbs.
    Any that’s me off for the night!

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  • manxpie

    Feb 26, 2014 at 2:31 AM

    Comment #32

    nite tuff exactly we’ll see especially after the next window
    its gonna be an absolute disaster or great!
    but also wat was expected or just wat we expected!
    can’t wait 🙂

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  • headtheball

    Feb 26, 2014 at 2:59 AM

    Comment #33

    TeDiouS @ 6
    You say we should ” Please ignore any ridiculous statements ” then go on to say ” your money for replica shirts indirectly funds drug dealers, sex traffickers and the like “.
    How do you justify a statement like that?
    I believe you have lost the plot.

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  • Ben3arfa

    Feb 26, 2014 at 3:37 AM

    Comment #34

    Is Mike Ashley still fat or did he lose weight?

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  • Jail for Ashley

    Feb 26, 2014 at 4:22 AM

    Comment #35

    I don’t think I ever mentioned this but Im not really a fan of the regime here right now.

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  • jimmysmith

    Feb 26, 2014 at 4:24 AM

    Comment #36

    What’s the goey with Haidarra. I can understand Dummet over Santon if Santon is showing signs of a poor attitude, and also over Mbiwa, whose had a couple of howlers. But Haidarra has looked a much more complete package than the young admittedly wholehearted Geordie, from what I’ve seen. Puzzling!

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  • Jail for Ashley

    Feb 26, 2014 at 4:50 AM

    Comment #37

    Jimmy,
    I think the goey is that Pardew seems to have his favourites and Haidara seems to be viciously assualted every time the poor guy gets picked.

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  • Jail for Ashley

    Feb 26, 2014 at 4:54 AM

    Comment #38

    Roy,
    There used to be at least three club shops despite lean economic times, the joint fifth biggest city having only one football club can sustain that, now Ashley seems to think that there are no need for so many as we are doing just fine where revenue is concerned…….. er, I mean somebody is !

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  • Toon-Prodigy

    Feb 26, 2014 at 5:08 AM

    Comment #39

    What is the point in having money?

    We don’t spend it on building the squad and trying to progress each window?

    We sell our better players once they are worth a few quid. Then we start over whilst missing key players and missing the quality in much needed positions for a long period of time.

    We all know we have plenty of cash.

    The problem is with ambition.

    You can have all the money in the world but with no ambition it’s completely useless. As we keep witnessing time and time again.

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  • Jail for Ashley

    Feb 26, 2014 at 5:11 AM

    Comment #40

    TP,
    Did you see my post about when the blog apologist said we qualified for the EL too soon., early hours of yesterday morning.

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