Stellar Financial Results – Next Up – Build A Great Side


As expected after we had a report in the Sunday papers yesterday that Newcastle would be willing to spend up to £60M on players this summer, Newcastle finally issued their financial figures for the financial year – July 2013 through the end of June last year  – and both revenues and profits are club records – again as expected.

mike ashley hull cisse scored

Mike Ashley – pleased with financial figures

The profits just about doubled from last year’s £9.9M to a best-ever £18.7M, although we still expected the profits to be a lot higher if our costs remained the same, given the massive increase of revenue.

However these are still the best financial results in Newcastle’s history, so one good thing Mike Ashley has done is made Newcastle a very stable club financially – and yes – let’s be fair – he deserves credit for that.

Here are the basic financial results of Newcastle’s last seven seasons since Ashley bought the club in the summer of 2007, and the £52.4M revenue was when we were in the Championship and didn’t get the big money of the Premier League which has since become massive.

nufc revenues

graph (3)

When Freddy Shepherd ran the club we had some great teams under Sir Bobby Robson,  but the profits were nowhere near these numbers, but we were still successful on the field.

And it’s not easy for a business to get costs under control and to grow the revenue, and when Ashley bought the club he quickly found that Newcastle were in debt to the tune of £100M.

And we still are – but we are not paying any interest on that debt of £129M, with an interest-free loan form Ashley.

Ashley doesn’t want paid back anytime soon, and we suppose in Ashley’s eyes that may be justification for Sports Direct getting the “free” world-wide publicity at St. James’ Park when our games are shown live around the world.

And when Mike Ashley first came on board, the club was losing over £30M for each of the first three years – so he’s done a stellar job financially for the club.

But that’s where the praise for the owner ends.

We should have a much better team than we have at the moment and we have finished in the top nine only once since Ashley became the owner.

And after doing the hard part – and being successful with getting the financials (totally) under control – the easy part seems to be to build a good team again.

With the massive money coming in from the Premier League TV rights over the following four seasons (at least), all PL clubs will have a big advantage financially  over the other clubs in Europe.

The Tyneside club now needs to spend some of that money and bring in some good players and build a top side again.

It looks like we will start doing that this summer, but we also have to keep our best players in the summer, and also over the next few years,  so we can indeed be challenging for Europe every season.

The Financial Fair rules say that you must only break even,  so in the last two years we could have done that and spent an extra £28M net on players – the profits of the last two years.

Lee Charnley is boasting that we beat the Financial Fair Play requirements – but we don’t need to do that – Newcastle need to spend any profits on building a top side.

A football club is created to compete well and win trophies for its fans – its created for the fans – and its purpose is not to make big money every year.

Newcastle United  shouldn’t forget that.

Howay The Lads!!

Comments welcome.

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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249 comments so far

  • jayphoto

    Mar 30, 2015 at 12:48 PM

    Comment #1

    strictly speaking with FFP we should be in a position to really compete in the league maybe not for top 4 but certainly for top 6.
    No way Ashleys going anywhere with these profits and the fact that they’ll go up further in the next 5 years though.
    It’ll be at least another 5 years of obscurity in lower mid table unless some mega rich consortium pays 3 times what we’re worth.

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  • Jeff from Benwell

    Mar 30, 2015 at 12:51 PM

    Comment #2

    Opto Prime
    I don’t know if you posted that link to The Mag to prove some anti NUFC point.
    However if you read the comments , there is a blogger called Dan that absolutely chops the Mag article into tiny bits and scatters it to the 4 winds.

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  • Belfast

    Mar 30, 2015 at 12:55 PM

    Comment #3

    Have a look at the tv money under Shepherd and Hall and then look at the tv deal now.

    Pretty confident we wouldn’t be in financial difficulty under Shepherd and Hall today.

    And if you honestly think we’re going to spend 60 million in the summer you need to book yourself into Broadmoor hospital straight away.

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  • hibbit

    Mar 30, 2015 at 12:57 PM

    Comment #4

    ashley is now a marked man people in power are now looking into his affairs on a daily basis lets hope the press and the mp dig deep enough to find the skeltons

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  • AncientC

    Mar 30, 2015 at 1:07 PM

    Comment #5

    Amortisation explained: For those having trouble understanding that transfer fees are part of the profit/losses at the club.

    “When a player signs for a club, their whole transfer fee is not written down all at once on the club’s expenditure for that year. The transfer fee cost is spread out evenly over the life of that players’ contract. For example, Player A signs for Club B for a transfer fee of $25 million on a 5-year contract. On their books, the club pays an amortization of $5 million per year for five years rather than showing $25 million up front in that one year.

    Additionally, If a player A is then sold for $15 million with two years left on his contract (meaning three annual $5 mil amortization payments have been posted on the books), then the final two amortization payments ($10 million total) are due immediately, with the club showing a $5 million profit (fee – remaining amortization due) on a player even though he was sold for $10 million less than what they paid for him.

    To clarify, this does not mean that clubs do not pay full up front for transfer fees (sometimes they do). Rather this is simply the accounting practice shown on their books when they calculate annual financial figures.”

    Quoting from – Jonathan Howard, Senior Editor, Business of Soccer.

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  • optimistic prime

    Mar 30, 2015 at 1:10 PM

    Comment #6

    Jeff

    No Jeff like I said, I’m trying to work out how many players with value we have let go for free.

    As usual you try to rubbish what others post or ask bu relying on articles that opose what others are saying or asking.

    You’ve already proved your a wum with your earlier post, and admitted you don’t think before you post.

    As I’ve asked before if all wages etc are counted with the cost of player where are these wages? Can you show me when a player is sold his wages go back into the kitty? No you can’t, so wind it in WUM.

    Opinions are like arseholes, everyone had one. Yours just stinks more than most.

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  • Jeff from Benwell

    Mar 30, 2015 at 1:10 PM

    Comment #7

    Hibbit is that Helen Skelton or Red Skelton ?

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  • Jeff from Benwell

    Mar 30, 2015 at 1:11 PM

    Comment #8

    Hands up those who thinks OP’s rattled ?

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  • optimistic prime

    Mar 30, 2015 at 1:13 PM

    Comment #9

    Ancient

    I thought the way the club talks all our players where paid for up front.

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  • beermonkey

    Mar 30, 2015 at 1:13 PM

    Comment #10

    ancient c

    when Ashley took over the club and didn’t do hid due diligence and found all the unpaid player fees he paid them and said we will pay all our fee’s up front

    so that sort of goes out the window but how they right it off with the tax man and accounted u have no idea

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  • beermonkey

    Mar 30, 2015 at 1:14 PM

    Comment #11

    ancient

    I have no idea not u have no idea

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  • optimistic prime

    Mar 30, 2015 at 1:16 PM

    Comment #12

    Jeff

    Is there not a article you can post that may follow your line of drivel?

    If you had a original thought it would die of lonely ness.

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  • Toon-Prodigy

    Mar 30, 2015 at 1:20 PM

    Comment #13

    18m? Wow.

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  • hibbit

    Mar 30, 2015 at 1:20 PM

    Comment #14

    hands up those who jeff from anywhere is a WUM

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  • AncientC

    Mar 30, 2015 at 1:22 PM

    Comment #15

    optimistic prime – From what I last read, the club do pay upfront for players, but it is calculated using amortisation for the yearly figures.

    Unlike some are trying to claim though, the transfer fees are part of the yearly finances; only divided out over the length of a contract.

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  • hibbit

    Mar 30, 2015 at 1:22 PM

    Comment #16

    think

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  • Jeff from Benwell

    Mar 30, 2015 at 1:22 PM

    Comment #17

    AncientC
    Our amortisation is easier to understand than most.
    Ashley doesn’t pay on the never never always dosh up front not because of any benevolence on his part but because you get better deals for players.
    Someone said earlier that if Fat Freddy had the current Sky money the club would be fine , what a laugh .

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  • John Tudor

    Mar 30, 2015 at 1:23 PM

    Comment #18

    is that jeff from chigwell

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  • Belfast

    Mar 30, 2015 at 1:24 PM

    Comment #19

    The rise of the premier league tv deal.

    Pre Ashley
    1992-1997: 191 million

    1997-2001: 670 million

    2001-2004: 1.2 billion

    2004-2007: 1.024 billion

    Under Ashley
    2007-2010: 1.706 billion

    2010-2013: 1.773 billion

    2013-2016: 3.018 billion

    2016-2019: 5.136 billion

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  • AncientC

    Mar 30, 2015 at 1:24 PM

    Comment #20

    £5 million would only be showing for Cabaye. Assuming he went for £20 million to PSG on a 4 year contract. Another 5 million per year posted for the next 3 years.

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  • optimistic prime

    Mar 30, 2015 at 1:25 PM

    Comment #21

    Jeff from Benwell
    March 30, 2015
    optimistic prime
    Hands up
    I didn’t think that one through
    Players as assets is hard to get ones head round
    I was thinking of them as normal written down assets – doh

    The only interesting or topical point you made in the whole time I’ve read the blog was by accident and by not thinking about it, kinda sums you up WUM

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  • Toon-Prodigy

    Mar 30, 2015 at 1:26 PM

    Comment #22

    Howay man where is all this money going?

    All the extra TV money, we only spent what we made last year. The Cabaye debuchy pennies? 18m? Season tickets, merchandise, shirts? Wtf is going on here?

    Fleeced.

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  • AncientC

    Mar 30, 2015 at 1:27 PM

    Comment #23

    beermonkey – I have never believed the story about Ashley not doing his due diligence. It was a scheme to get leverage over the club. (Imo anyway)

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  • Ibizatoon

    Mar 30, 2015 at 1:27 PM

    Comment #24

    Ancient C…I think what certain posters are trying to do is to claim these profits are our “operational profit” – which I understand doesn’t include player trading?

    However, the announced operational profit is £4.7m, not £18.7m. Surely the latter figure does indeed include player trading from that year, with amortisation of course?

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  • Jeff from Benwell

    Mar 30, 2015 at 1:31 PM

    Comment #25

    Hooray Ibiza gets it

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  • Belfast

    Mar 30, 2015 at 1:31 PM

    Comment #26

    How would we be in the same trouble under Shepherd and Hall now Jeffery ? We would have far more money in the bank for a start.

    I’m not defending them by the way, just think it’s an unfair comparison with the money floating around now compared to then.

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  • Charlie in the Gallowgate

    Mar 30, 2015 at 1:33 PM

    Comment #27

    Belfast
    Be interesting but I wouln’t be so sure

    Totals made from Newcastle United 1999 to 2005 – 6 year period

    Sir John, Douglas and Cameron Hall: £36,466,153

    Freddy Shepherd and Shepherd Offshore: £ 8,351,298

    Total £44,817,451

    God help us now – how much they would be taking out of the TOON
    especially the likes of Douglas Hall and Fat Freddie who was still fleecing the club when we had no mone

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  • NezzaNUFC

    Mar 30, 2015 at 1:34 PM

    Comment #28

    Hi guys, I’m no good with NUFC finances or how it’s worked out but I’m sure the profits should be more than what they have made 18-19 million!?

    this can’t be right, but on the bright side though doesn’t this prove that the TV money from last season hasn’t been touched and also this season TV money won’t be touched either?

    how much TV money did NUFC get last season and how much are they expecting this season?

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  • Catchy's Pet Lip

    Mar 30, 2015 at 1:36 PM

    Comment #29

    Other expected £30m lost at the roulette table.

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  • Ibizatoon

    Mar 30, 2015 at 1:38 PM

    Comment #30

    Jeff…That’s what I’ve been saying all day. £18.7m profit includes player trading.

    I thought you were saying the £18.7m profit did not include these figures and that we were only looking at part of the big picture?

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  • NezzaNUFC

    Mar 30, 2015 at 1:39 PM

    Comment #31

    AH I know were the money went, physio department 🙂

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  • optimistic prime

    Mar 30, 2015 at 1:40 PM

    Comment #32

    No wonder finances are do confusing.
    We sell a player for £20million but because he’s 20 we can only add one million a year onto the incomings.

    Then there’s the agents taxi to pay for plus the taxi drivers daughters college fees, plus the heating bills for the college.

    So we have £18.7mil profit which isn’t really profit, I get it now.

    So when we spend £60mil in the summer it won’t really be £60mil.

    I bet you’re all glad I cleared that up.

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  • Ibizatoon

    Mar 30, 2015 at 1:41 PM

    Comment #33

    On the discussion of previous owners – who the hell knows?

    Previous regime weren’t sensible with money, although they did show great sporting ambition. Whose to say they wouldn’t waste all this extra money this time around?

    It’s a pointless debate really. The issue, is our current owner utilising the funds available to us to our (the club) greatest benefit?

    What went before can be twisted to suit which ever side you sit, it actually has no impact on where we are now or where we’re going.

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  • AncientC

    Mar 30, 2015 at 1:42 PM

    Comment #34

    Ibizatoon – The way I understand it, operational profits are the profits not including net transfer expenditure. I could be wrong.

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  • Ibizatoon

    Mar 30, 2015 at 1:44 PM

    Comment #35

    AncientC…I think we’re all on the same page (ish) now 🙂

    I do feel sorry for the club and some of our posters having to deal with us thickos who can’t get our heads around these tricky figures.

    1 + 1 does equal 2, right?

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  • Ibizatoon

    Mar 30, 2015 at 1:45 PM

    Comment #36

    Sorry, easy figures. They’re not tricky, it’s just I’m thick. So thick I almost forgot how thick I was.

    That’s pretty thick.

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  • Belfast

    Mar 30, 2015 at 1:45 PM

    Comment #37

    Oh they’d still be lining their pockets that’s for sure, but it’s still much easier to make a profit when the tv deal has increased by four billion form your time at the helm.

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  • Jail for Ashley

    Mar 30, 2015 at 1:45 PM

    Comment #38

    AncientC,
    The more we know about Mike Ashley it is unlikely that he failed to do due dilligence, and he knew exactly whst eas going on.
    On the profits,
    Did we honestly expect to see an honest version that would leave is all expecting a massive influx of players in the summer.
    On McClaren,
    Most ambitious clubs would appoint a new manager based on his success elsewhere . However we are relying on Steve Mclarens failure to get Derby promoted before considering him. Even better would be Derby sacking him and leaving him to come for free. You can’t deny the progress being made there, a sacked league one manager followed by a sacked Championship one, who knows when McClaren quits we might get a sacked PL manager after six months of Carver.

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  • optimistic prime

    Mar 30, 2015 at 1:46 PM

    Comment #39

    Hall Sheperd vs Ashley is a poor match up, it’s like asking which girlfriend did you like cheating on you the most?

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  • JP...from The Rock

    Mar 30, 2015 at 1:47 PM

    Comment #40

    So even if we have ‘stellar’ finances like Ed states so nicely, how on earth are we going to buy with just £18M;

    1 or 2 Strikers
    1 Winger
    1 AM
    2 CBS

    How on earth are we going to buy all that with just £18M!?

    Even if we do that we are still short on players and the quality of player will be nowhere near as good as it should be.

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