Why Ashley Doesn’t Have To Spend Money Before July 1st

There is a report in the Mirror today that Newcastle are on track to make a record profit of around £60M, when this financial year closes on June 30th – but of course we will not know the official results for several months.

mike ashley glum

Mike Ashley – Newcastle owner

And the report says Newcastle are rushing to spend some transfer money before July 1st, and that’s  so that the profits are not too huge, otherwise the report suggests Mike Ashley will face the Newcastle fans’ fury.

But any money spent on transfers now is only valid on July 1st – which is the start of the next financial year – and that’s because the contracts are valid from that date – so we assume the money paid for players goes into the next financial year too.

As an example the two players we have already signed – Ayoze Perez and Jack Colback are paid by their former clubs – Tenerife and Sunderland respectively – through June 30th, because officially the transfer window opens on July 1st – which happens to be the start of the next financial year, and that’s officially when any transfer fees are paid for deals already agreed between clubs.

We could be wrong on that as we said – but we don’t think so –  and there’s a reason why the financial year in football runs from July 1st through June 30th and  the transfers that count in any one financial year are those that are done from July 1st through August 31st and in January – and that’s basically two months in the summer and the month of January.

Since the transfer window doesn’t open until July 1st the only transfers that count for this financial year are those done last July and August and in January – so the transfer windows for this financial year are already over.

So saying Mike has to spend the money this month otherwise Newcastle will make huge profits doesn’t seem accurate.

That’s one reason Newcastle should have brought in replacement(s) for Yohan Cabaye in January, and that would have counted in this financial year, but we have had only two loan signings this financial year – Loic Remy and Luuk de Jong – as far as bringing players in is concerned.

And of course with an increase of over £35M from the Premier League in May compared to last year, our profits are going to be huge – assuming our costs have remained steady.

The Mirror report states that Newcastle will have one of the best financial results of clubs in all of Europe – and that could be accurate.

Now if we can only get the owner to spend some of the money that we have available on some really good players before September rolls around – then we’ll really be flying

Comments welcome.