The Swiss Rambler has studied the Newcastle Financial results for the last financial year of July 1, 2013 though June 20, 2014 and with the figures also being available at Company House – it’s now possible to look a little more closely at Newcastle’s financial figures for last year, and we have taken some of the charts from the Swiss Rambler site – which has been an excellent financial site for football for quite a few years now.
The site doesn’t produce too many reports, and the person running it is an Englishman married to a Swiss girl and he’s in the business of finance, and his reports are of the highest quality – so compliments again to the Swiss Rambler.
Lee Charnley – Newcastle Managing Director
Here are Newcastle’s full profit and loss figures for the last financial year.
We had assumed that Newcastle’s costs would have remained constant from the previous financial year but that wasn’t the case, and the wage bill went up from £61.7M to £78.3M – an increase of £16.6M, which is one reason the profits were not as big as we had expected them to be.
The player amortization – where players are paid for over a number of years in the accounts – also went up from £12.8M to £19.6M – another increase in costs.
The other expenses line also increased from the previous year by £4.7M so the overall expenses last year actually increased by £28.1M from the previous financial year, and helps to explain why the profits of £18.7M were not even higher.
The commercial revenue has been a weakness in Newcastle’s finances for some time, but last year with the new Wonga deal the commercial revenue increased from 18% of total revenues to 20%, and in real terms increased from £17.1M to £25.6M – an increase of almost 50%
Broadcasting revenue is now a massive 60% of total revenues and match day revenues and commercial are 20% each of total revenue.
The broadcast revenue from the Premier League is due to go up by 70% in a massive £5.1B deal, and it starts in the financial year – July 1st, 2016 through June 30th, 2017 – so broadcast revenues will be even a higher percentage in years to come.
The above graph shows a number of interesting points and one of them is our commercial revenue has actually decreased by about £2M since Mike Ashley took the club over in 2007, and the yellow in the chart is broadcast revenue which will be massive in future years, and this year is the first year of the new £3B Premier League TV deal which runs for three years.
And notice that actual revenues from match day are less than they were back in 2007 – they were £25.9M last year compared to £33.6M back in 2007, and that’s because Ashley has given out some good deals to get the fans to the matches.
Back in 2007 match day revenues were 38.6% of total revenues, and they have decreased in real terms to only 20% of revenues, and will decrease even further when the new £5.1B broadcast deal starts next year.
The new TV deal should allow Premier League club to financially compete competitively with other European clubs – so there’s no reason why English clubs cannot start competing more effectively in European competition once again, after a falling away over the last few seasons.
Of course to build a top team you have to be willing to spend the money on the playing squad, which Mike Ashley hasn’t done (yet?) at Newcastle.
The owner seems to pride himself on having good financial figures every year – but that does nothing for the team on the field – as Newcastle fans have witnessed all too clearly.
Both the revenues and profits for Newcastle are the best ever, but we will probably see a decline in the revenues for the financial year ending this June 30th, due to Newcastle being lower in the league than we were last year, when we finished in 10th place.
Newcastle are currently in 14th place and as a very rough guide each place is probably worth around £2M in revenue.
Given where we are at the moment, we probably will finish in 15th place, because we expect Aston Villa to overtake us before the end of the season – so that would be around £10M less in broadcast revenue compared to last year.
We are the 7th richest club in England and the 19th richest in the world – so at least financially we are just behind the top six in the Premier League – but nowhere near on the playing field.
The bottom line is nothing new – we are in great shape financially and in terrible shape on the pitch.