News yesterday that the English Premier League has sold TV rights to its games for a record £5.14B ($7.9B), which is 71% above the current deal of £3B, which runs through June of next year.
Mike Ashley – Newcastle owner
And in our review of the deal yesterday we put together a rough estimate of that would mean to future Newcastle revenues.
The revenues for the last financial year through last June 30th already increased by around £34M to around £129M, and made Newcastle the 19th richest club in the world on the Deloitte Money League.
And when the full figures are released later this month we could see profits even north of £40M.
By adding 70% to the money PL clubs receive in the current deal we estimated roughly yesterday in the financial year 2016-2017 Newcastle would get around £136M if we finished in the middle of the table – and that’s around £58M more than we received last year.
Those figures are after correcting an error I had in the article, and it was £10M too much – a deliberate mistake made to keep you on your toes. 😀
Another very quick way to get near that figure is to assume each club gets around 70% more from the new deal, and since we received around £78M last May it would be around £133M – which is an increase of around £55M.
And it will make the smaller clubs like Crystal Palace, West Brom, Stoke and the like much richer, which means they can bid for better players – because they will be able to afford to pay higher wages as well as higher transfer fees.
And if Newcastle don’t start using that new revenue to buy top players we could even start losing out to those smaller clubs in the PL, who will be willing to spend the money to improve their squads.
My son Neil made that point to me this morning – and it’s a good one.
The new increased revenues are only for the Premier League clubs and not with the other clubs around Europe, so clubs like Newcastle United will be gaining on top clubs like PSG, Real Madrid, Barcelona and Bayern Munich (in revenue and hopefully profits) to name just a few.
One thing Mike Ashley has done an excellent job of as owner of the club, at is to make Newcastle’s financial figures some of the best in the Premier league – especially with the profits.
And some owners would take our profits this year – we don’t know if they will exceed £40M but they will be very good – and use most of that on buying new players to improve the quality and size of the squad.
We hope Mike Ashley will start doing that.
And we dare say that some Billionaires or consortiums around the world will take a look at Newcastle’s financial figures this month, and do the maths to see what that would will mean in a couple of years time when the new PL TV rights deal becomes active – and Newcastle United would seem to be a very good candidate for a takeover.
It is now given our financial figures of last year.
We’ve always thought that Mike Ashley would sell up only when a good unsolicited offer comes in, and it wouldn’t be by trying to sell the club, which Mike has tried to do twice with no success.
Maybe a consortium could come in and make the owner an offer he just couldn’t refuse – and pledge to bring the good times back to St. James’ Park.
This new Premier League deal now makes that a lot more likely, there’s little doubt about that.
What do you think?
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