Newcastle Promotion Strategy Praised – But It’s Also A Recipe For Disaster


The Deloitte Money League is now out for 2018, and the interesting piece in it is they report Newcastle United continued to operate as a Premier League club when we were in the Championship.

The wage bill was massive, and another loan from owner Mike Ashley assisted Newcastle in surviving, and it all worked because we were promoted at the first attempt.

But notice the longer a team stays in the Championship, the less money they get, and they invariably have to cut their running costs significantly to keep in line with the Financial Fair Play rules.

Aston Villa are facing that problem at the moment and next season will be their third season down below.

Rafa Benitez –  two successful seasons as Newcastle manager

They may even have to go into bankruptcy – but we hope not – that would be tragic.

It’s been well documented that to keep Rafa at the club Newcastle officials agreed to keep players who wanted to stay.

That included some high wage earners like Jonjo Shelvey, and we ended up losing over £90M before taxes for the 2016-2017 financial year.

Here’s some of the Deloitte report as reported in the Chronicle:

“Despite being relegated from the Premier League to the Championship for the 2016/17 season, Newcastle’s core wage bill actually increased (by 8%), even when excluding promotion bonuses and amounts written off as onerous contracts,”

“The decline in revenue recorded by the club meant that the wages/revenue ratio reached 131%, while the club recorded the largest operating loss in the league (£55M).”

“Newcastle was effectively run as a Premier League club taking what the club described as a “financial gamble” to secure an immediate return.”

“The result was positive as the club achieved promotion and subsequently consolidated their position in the Premier League by finishing 10th in the 2017/18 season.”

“It remains to be seen whether Newcastle’s success emboldens other clubs relegated from the Premier League to follow this strategy in the future.”

It all worked out for Newcastle, but it’s also a recipe to go into bankruptcy if things don’t work out – which means the team is not promoted in the very first season down below.

In that first year, there will be huge losses, and they simply cannot be maintained, and costs would have to be reined in significantly.

And in that second season, three relatively rich clubs coming down from the Premier League will be new competitors for promotion.

It was a huge risk taken by Newcastle – make no mistake about that – but due to the brilliance of manager Rafa Benitez and the courage and determination of our players, it was a huge success.

And it continued this season when we finished in 10th place and got a massive £123M from the Premier League.

And Mike Ashley is still hesitating on agreeing to Rafa’s demands before he will sign a new long-term deal at the club?

Amazing.


11 comments so far

  • lesh

    Jun 7, 2018 at 9:41 AM

    Comment #1

    Yes, a stark warning for Ashley. Deloitte’s report also opined that a club’s Academy and training facilities can, like commercial income, contributors source of profit if they are invested in and properly managed.

    Take note Ashley and wake up to what Rafa’s trying to tell you.

    1
  • Jib

    Jun 7, 2018 at 9:41 AM

    Comment #2

    It was a huge risk taken by Newcastle – make no mistake about that
    but due to the brilliance of Rafa Benitez and the courage and determination
    of our players, it was a huge success.
    And it continued this season when we finished in 10th place
    And Mike Ashley is still hesitating to agree to Rafa’s demands

    Deloitte says
    “Newcastle was effectively run as a Premier League club
    taking what the club described as a “financial gamble” to secure an immediate return.”
    and Ashley put £15M in.

    But still not the slightest acknowledgement or iota of respect from the usual suspects.

    5
  • Hail Wor Ashley

    Jun 7, 2018 at 9:42 AM

    Comment #3

    On Aarons.

    He’s just another consigned to the what could’ve been bin, injuries have taken their toll on his pace, he really isn’t very quick anymore, add to that a questionable work ethic and attitude – he looks a long way off consideration.

    Offer him to Boro with some cash for Traore; now there’s an exciting winger, probably the fastest and most powerful – yet still agile – dribbler in world football, with an intelligent world-class manager the sky is the limit for him. Imagine a Rafa team with counterattacking punch potential of Kenedy on one wing and Traore on the other.

    Out:

    Sels + Mebmba – £8m
    Darlow – £4m

    Colback – £3m
    Saivet – free
    Lazaar – free

    Mitrovic £20m

    In:

    Kongolo – loan
    Kenedy – £20m
    Traore – £18m + Aarons
    Wilshere – free (probably a hefty signing on fee demand so say £5m)
    Dembele – £22m

    Net spend of just £35m including Dubravka and a much superior squad to the start of last season.

    25 man squad:

    Dubravka
    Elliot
    Woodman

    Yedlin
    Manquillo

    Lascelles
    Lejeune
    Clark

    Kongolo
    Dummett

    Shelvey
    Diame
    Merino
    Hayden

    Ritchie
    Traore
    Murphy

    Wilshere
    Perez

    Kenedy
    Atsu

    Dembele
    Gayle
    Joselu
    Armstrong

    1
  • Bobbybee

    Jun 7, 2018 at 9:46 AM

    Comment #4

    Does anybody really know how talks are progressing? I don’t think so.
    After last season, there’s a good chance delays are as much down to Rafa as Ashley, simply because he feels he was let down and will want everything in the fine details perfect before signing. And who can blame him?
    By all accounts he’s given his list to the slowcoach Penfold and we’re waiting on him – as usual. As usual at Newcastle, it’s watch this space.

    0
  • The next Mike Williamson

    Jun 7, 2018 at 9:53 AM

    Comment #5

    Benitez has probably said I’ll sign after I see who we sign. He’d be a fool to sign before. A chairman’s promises mean about as much as a politicians.

    3
  • Hail Wor Ashley

    Jun 7, 2018 at 9:55 AM

    Comment #6

    Even when we had a summer of splashing the cash relatively speaking, we waited until the latter half of July to actually begin doing it.

    Mbemba, Mitrovic and Wijnaldum all came mid to late July, Thauvin in mid August.

    In the January Shelvey came in mid-Jan, Townsend late Jan and the less said about Doumbia on deadline day the better.

    The only significant transfer I can recall in recent memory that we got done early was Cabaye in late May when the rumours began and by about this time 2011 he was confirmed.

    0
  • The next Mike Williamson

    Jun 7, 2018 at 9:55 AM

    Comment #7

    I expect he’ll sign after a couple of players come in. Ashley’s probably already promised him what he wants he could just be waiting to see if he’s as good as his word.

    0
  • The next Mike Williamson

    Jun 7, 2018 at 9:57 AM

    Comment #8

    On Aarons, he seems to do well off the bench and then when he gets his chance from the start he’s anonymous. Maybe worth having as a super sub against tired legs but nothing more.

    1
  • RobLeenio

    Jun 7, 2018 at 9:59 AM

    Comment #9

    I see no reason that there wouldn’t be an agreement in place between the club and Rafa by now, but we’ll not know until we know. Interesting there’s been no word from Rafa for a week or two. He’s bound to take a holiday at some point, maybe he’s away currently before the World Cup kicks off?

    0
  • Jib

    Jun 7, 2018 at 10:00 AM

    Comment #10

    I seem to remember the delay with Mitro was his side
    His Mam and Dad came over and looked around Newcastle
    and seemed to be interminable meetings at SJP

    https://metro.co.uk/2015/07/11/newcastle-transfer-deal-for-aleksandar-mitrovic-in-balance-as-players-father-says-his-son-is-waiting-for-another-club-to-submit-bid-5290612/

    0
  • Jib

    Jun 7, 2018 at 10:04 AM

    Comment #11

    Mitros prevarication was played out in the
    glare of publicity.
    I bet there’s loads of behind the scenes
    dillydallying that we never hear of , with most
    transfers.

    But it makes folk look clever and ITK if they
    heap the blame on Charnley.

    0

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