Newcastle profits in the last financial year were expected to be somewhere between £35M and £50M, but they have come in fairly low at £18.7M, which is still a record for Newcastle.
The higher profits were expected because of a massive increase in revenue of £33.8M due to this being the first year of the new £3B TV deal, which runs out next summer,
At that time for the 2016-2017 a bigger deal – a massive £5.1B deal for the Premier League TV rights – comes into effect for the following three years.
The simple logic financially is if the costs remain constant from the previous year, then the increased revenue should flow to the bottom line as profits.
Which is why we had several reports saying the profits should be in the range of (£9.9M plus £33.78M) – around £42.68M.
It is possible to hide increased profits by taking additional costs in the financial year, but we would need more details on the financial results of Newcastle to more fully understand why the profits are not higher than reported.
We thought the extra profits may go to paying off Mike Ashley’s £129M interest free loan, but that hasn’t happened.
And with Newcastle being a private company fully owned by Mike Ashley, there is no legal requirement (at least in the US) to show the financial figures in any real detail for the public.
They are only required for public companies listed on the stock market – which are essentially owned by the public.
Maybe we will get some explanations about why the profits were not even higher in the coming days – there are extra costs somewhere.
Newcastle could have paid some substantial money towards the costs of the upgrades to the the Benton Training grounds, which should be starting shortly.
But duty calls – and I have to take my dog Milo out for his morning walk – must keep my priorities right.
Note: Mark Hammell is an avid reader of the blog and he has signed up for 7 endurance events totaling over 600 miles, after he has just recovered from a serious ACL injury.
Mark is doing this to raise money for the Sir Bobby Robson Foundation. Here is Mark’s Justgiving page – see if you can help him out and help Bobby’s Foundation.
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