Newcastle’s Lee Charnley and Mike Ashley are said to be working on the budget for next year, which must be the most important topic of interest for everybody concerned at Newcastle at the moment, because it will be how much money the club has to run on in the next financial year.
In the last two years we have had close to £80M from the Premier League and maybe a little less when we get our allocation this month.
That will be cut to £2.5M next May in the Championship, but with a parachute payment of 55% of what we get from the PL this month – the total amount from the broadcast part of the revenue should be should be about £40M.
Mike Ashley and Lee Charnley on Sunday
What a disaster
Here’s the latest financial figures we have from the 2014-2015 financial year with the other two parts of the revenue in addition to broadcast – the matchday and commercial.
The matchday revenue – what we get from the games at St. James’ Park – brought in £26.8M and the commercial revenue was £24.9M.
So if we assume these remain constant for the coming season we would have revenues of around £51.7M from these two sources.
That would mean a total revenue of £91.7M.
But the matchday revenues would be reduced because the season ticket prices would decrease and also the attendances would decrease maybe to around 45,000 for the home games.
We are not sure what happens with the commercial revenue from Wonga and others – and whether that is reduced because of the lack of exposure and TV appearances of Newcastle in the Championship next season.
Say there is some reduction in commercial and matchday revenues – let’s say we get 2/3 (66.67%) of it – so Newcastle could be looking at around £34M from those two revenue sources – so our total would be around £74M.
That’s higher than the £53M we got the last time we were in the Championships seven years ago – close to 50% more.
Newcastle would also have to sell some of our top players to get some transfer funds for Rafa to spend this summer on new players.
If we sell players like Cabella (£6M), Thauvin (£10M), Sissoko (£10M) and Wijnaldum (£15M) – there’s £41M.
And we don’t know how much we currently have in the bank (cash on hand), although in March Ashley said there was no money left, but we will be getting close to £80M from the Premier League within the next week or so.
The revenues for next year are a lot higher than when we were last relegated seven years ago – as you may expect – but it would reduce significantly the next season, as the parachute payments reduce and eventually go away.
That’s one reason it is so crucial we come straight back up next May.
But it’s not too disastrous if our revenues are around £74M in the next financial year which starts July 1st – assuming the above assumptions are sensible.
And it would be an excellent time for Sports Direct and Mike Ashley to start to pay for all that free advertising – and £10M/year for that would be very welcome, starting immediately.
That would mean around £84M revenues for the next financial year and a nice jump in commercial revenues for the club.
As an overall look at things we have listed below Newcastle’s revenues over the time Mike Ashley has owned Newcastle.
You can see how Newcastle’s revenue in the next year will take a gigantic fall and it’s even worse than that when you think if we had remained in the Premier League those revenues would be at around £180M with the new increased TV rights deal.
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