Newcastle To Become Rich Club – Revenues Increase Dramatically

We reported yesterday that the new deal for the Premier League was estimated to be around £4.4B,  and up from the current deal which runs through June 2016 and is £3B. But that was just an estimate and news that the Premier League has sold TV rights to its games for a record £5.136B, which is 71% above the current deal.

That’s just staggering.

Richard Scudamore l

Richard Scudamorere – massive deal

Sky paid £4.2B for five of the seven TV packages, and BT paid £960M for the other two packages in the TV rights auction.

The current deal (£3B)runs out at the end of next season, and this new three year deal will start in the 2016-2017 season.

Sky and BT are the same two companies who won the rights to the current Premier League TV deal.

The current deal – at £3B – means that clubs get anywhere between £60M and £100M each May depending (in the main) on where each club finishes in the league table.

Here’s the increase in PL TV rights over the last 23 years as shown by BBC Sport.

rise of pl tv income

And Newcastle’s revenues increased by about £35M in the last financial year to around £129M, based in large part on it being the first year of the current three year deal, which was much higher than the previous one.

In the financial year 2016-2017 Newcastle  can therefore reasonably expect the revenue from the PL  to increase by around 70% – roughly – so it gives us some estimate of what Newcastle’s revenue could be at the end of June, 2017, after the first year of this new deal.

Assume that the money paid out to clubs rises by about 70% – so that means the 20 clubs would get between £102M and £170M – depending again on where in the table each club finishes.

So assume we finish again in 10th place, and that will be in the middle of that range – so we’ll get around £136M

In our last financial year ending last June 30th, we received about £78M from the Premier League – so that would mean an increase of £58M in revenues for Newcastle – so that would mean our revenues at the end of June 2017 for the previous financial year,  would be  £187M (£129+£58).

I have to check out the figures here,  but the basic assumption is that clubs will get around 70% more in May starting in May 2017, than they are getting from the current deal.

That will make Newcastle one of the richest clubs in the world, and we will likely  be a lot higher than the 19th position we are in at the moment in the Deloitte Money League for our last financial year with around 129M in revenues.

That’s because the other European Leagues do not get anything like this kind of money with their TV rights.

That’s shown in this table which we published yesterday, showing the TV rights received in the top five European Leagues over the last financial year with the figures being in euros.

So as long as Newcastle stay in the Premier League we will become a very rich club, and probably one of the 10 or 15 richest clubs in the world – that’s not being too unrealistic.

Note to Mike Ashley – please spend some of this new money to build a top side at Newcastle that can challenge for the top four.

Another thought – with the Newcastle revenues and profits going to look stellar in the next few years, maybe that will entice somebody to come in with an offer Ashley cannot refuse.

Not there’s a thought.

Comments welcome.

Dr. Ed Harrison is a retired IBM Executive, who was born and bred in Newcastle, and joined IBM in 1970 after completing a PhD in Computing Science at Newcastle University. Ed ended up building and managing a $2B Network Consulting Business with IBM towards the end of his 34 years at the company, and finally retired back in 2004.

You can follow us on our three social media sites below:

7 comments so far

  • swemag

    Feb 11, 2015 at 3:51 PM

    Comment #1

    I believe long term Ashley will become the richest person in the UK. He will expand SD internationally and he will use Newcastle and the Premier League to do so.

    For this reason alone I find it incredibly hard to think that he has any interest in selling the club. It is just such an amazing advertising vehicle that he holds in his hand that it would be completely stupid for him to sell.

    I would expect that he looks quite a lot on how sport franchises in North America are being handled and how they have risen in value. It is quite possible that the Premier League will be the one football league that will become completely dominant world wide.

    Living in North America I can tell you that soccer and specifically Premier League is rising like a rocket over here. You had Beckham and now Gerrard, Lampard and David Villa coming over, it will continue to rise.

    So, bottom line, don’t expect your favourite owner to move on anytime soon.

  • Rotonda heights

    Feb 11, 2015 at 4:00 PM

    Comment #2

    Very naive I know but at some point wouldn’t ashley be legally forced to pay off his loan and / or spend x amount on the club.

    Or can he really just keep pocketing it all and employing mediocre people as long as we finish 17th or above every season.

  • sickandtired

    Feb 11, 2015 at 4:01 PM

    Comment #3

    Given how much NA franchise players make and how competed for the good players in any sport there are, that is the chink in the Ashley plan.
    He will never attract major sponsors etc while he keeps the team in the bargain basement.
    I don’t think he as any sporting desires, it is all purely business and profit. His history in that regard is rooted in buying cheap and running cheap.
    Never is it going to be clearer to everyone once he cannot hide away the massive profits NUFC will be bringing.

  • 9

    Feb 11, 2015 at 4:36 PM

    Comment #4

    swemag, that’s certainly one possibility, but not the only scenario. The going rate for buying a guaranteed cash cow like NUFC will be massive, and it may suit to sell at enormous profit and move on. It isn’t hard to envisage he could make up to half a billion pounds clear profit if some massively rich outfit from abroad, Chinese or Arab maybe, fancied having a go at our Premier League. Your reported fascination with the league in North America is actually replicated world-wide and so there seems to me every possibility a foreign sale of a huge amount could equally be on the cards.

    Very nice position for an owner to be in.

  • toonluvva

    Feb 11, 2015 at 5:52 PM

    Comment #5

    I just hope that Mr Ashley recognises that if the rewards for being a PL club are vast, so are the consequences of being relegated.

    You can guarantee that the other PL clubs will use at least a part of their new found wealth on their squad. If we don’t do likewise, we could find ourselves in the chumpionship.

  • scout

    Feb 11, 2015 at 6:32 PM

    Comment #6

    The news doesn’t interest me in the slightest. Shoestring players will continue to roll through the door, luck will run out and we’ll finish bottom and receive 99 million woo hoo, all hail the king what a clueless fool

  • one fine day

    Feb 12, 2015 at 5:48 AM

    Comment #7

    If these figures are correct it makes even less sense as to why he is even bothering with rangers.
    if the revenue and exposure is greater than a Scottish team even getting to group stages of champions league (unlikely) then why bother?
    Sad but I don’t think he will sell on the back of this


You must log in to post a comment.