The financial results have just been released for the 2015-2016 financial year for Newcastle United, which is the year before this one – so we were still in the Premier League.
But Lee Charnley has taken the opportunity to prepare fans for the huge drop in revenues we will get in this current financial year which ends on June 30th and the results of which will be announced next year at around this time.
If we can get back to the Premier League this season then things will not be so bad and we still expect Rafa Benitez to be given sizable funds to strengthen the squad in the summer.
Lee Charnley with Mike Ashley
Rafa will sell players and reinvest that money in new players coming in as well as getting transfer funds to spend directly on new players.
This is what Newcastle’s Managing Director Lee Charnley has said on the web-site today after the financial results though June 30th, 2016 were released:
“The 2015/16 season was extremely disappointing for everyone connected with the club.”
“Significant sums of money were spent to strengthen the playing squad in the summer 2015 and January 2016 windows, which also resulted in an increase in our annual wage bill.”
“In the context of this spend, relegation was both unacceptable and totally unexpected.”
“The financial impact of relegation is difficult to overstate and this will become evident in our next set of financial results for the year ending June 2017.”
“The biggest impact by far is the dramatic reduction in centrally distributed income that comes with dropping down a division; the reality being our income in this area is forecast to fall by over £30M compared to 2015-16.”
“To highlight the differences, our 16 live TV games last season earned us £12M in revenue. Contrast this with 2016/17 EFL live fees which, based on our current number of confirmed appearances (12 away and 6 home), will earn us a total of £720K.”
“To illustrate further the cost of relegation, 2016/17 marks year one of the new Premier League TV deal and the team that finishes in 18th place this season is expected to receive in the region of £30M more revenue than we did for the same place finish last year.”
“Our approach, following relegation, was to make further sizable investment in our playing squad in preparation for the EFL Championship season ahead and our annual wage bill is, we believe, still above and beyond many current Premier League teams.”
“Whilst not without financial risks, this strategy was adopted in order to maximize our chances of promotion at the first time of asking.”
“Outgoing transfers will ultimately generate a significant net player trading surplus for the summer 2016 transfer window but, due to the cash profile of the deals, this will result in a net cash outlay in 2016-17.
“Our adopted strategy has therefore only been made possible by the cash injection from our owner, who continues to provide interest free funding to support the club’s operations, never more important than during this financially challenging season.”
That’s well explained by Lee Charnley and we have done really well to survive in the Championship from a financial viewpoint and hopefully we will soon be back in the Premier League.
Very soon – hopefully.
What do you think?