At the time of their relegation, Premier League TV money contributed 43.7% of Newcastle’s earnings, little of which would have been replaced by the Football League television deal upon relegation though parachute payments of £11.2million cover about a third of the loss of the difference.
Commercial revenue doesn’t show the same constant growth as most other sides either. The sponsorship agreement with Northern Rock, a deal over a number of years with payments made by the bank each season, was paid wholly up-front to fund the purchase of Michael Owen.
The legal case resulting from the departure of ex-boss Kevin Keegan cost the club more than £5.3m. United’s wage bill soared to more than £71.1m by the end of its time in the Premier League. The sports billionaire has ploughed an extra £25.5m into the club’s coffers. And the Toon now owes owner Mike Ashley £111m.
Player costs worth more than £21m have been saved since relegation.
The director’s report, signed by MD Derek Llambias, says: “A disappointing 2008/09 season for Newcastle United culminated in an 18th place finish in the FA Premier League and relegation to the Football League Championship for the 2009/10 season. The financial effects of relegation will be most evident in the financial statements for the year ending June 30 2010 but it has also impacted on the results for the year under review.”
It goes on to reveal the club’s turnover fell to £86.1m from £99.4m the year before.Despite the reduced income, the wage bill rose to £71.1m from £70m in 2008/9 and that meant salary costs ate up a staggering 82.6% of all the cash coming into the club. The playing registrations of certain players have been disposed of subsequent to the balance sheet date for a total consideration, net of associated costs, of £21,103,000.”
The document adds: “Subsequent to the balance sheet date, the playing registrations of certain players have been acquired for total consideration, including associated costs of £3,221,000.” That will take account of the signing of players including Mike Williamson, Fabrice Pancrate and Danny Simpson. Costs relating to this matter, totaling £5,342,000 (including staff costs of £2,256,000) have been charged in full in the year to June 30 2009.
In January 2008, Sam Allardyce’s contract was terminated. Costs relating to this and the accompanying changes in backroom staff, totalling £4,597,000, were recognised in the prior year.
It is also revealed £1,357,000 was paid to the club’s solicitors Freshfields Bruckhaus Dennger for the services of former chairman Chris Mort, who was at St James’ between June 2007-June 2008.
The Club made an operating loss for the year of £33.5 million, compared to £37.7 million in 2008/09. The overall loss for the year after player trading was £17.1 million, compared to £15.2 million the year before.
Relegation to the Championship resulted in a 39 per cent reduction in turnover, from £86.1 million in 2008/09 to £52.4 million in 2009/10. The greatest reduction was in TV and Media revenue which fell 57 per cent, from £37.6 million in 2008/09 to £16 million in 2009/10.
However, whilst most revenue streams fell by a significant amount, gate receipts improved. Despite relegation, over one million fans visited St James’ Park during the 2009/10 season, with an average league attendance of 43,388, the fourth highest football attendance in England.
This is spin – 1.3 million for Chris Mort? Wise’s salary (which we are still paying) probably 1 million – 0.5 million/year for Pardew, 10 million to Allardyce and Keegan, there’s 15 million before you start. We all know Shepherd and Hall were taking at least 1million a year from salaries (and associated family members another 0.5 million) – over 12 million in salaries alone. Lambias? At least the same as Mort. One million people through the turnstiles and only 15 million revenue? They’re taking the piss – £15 per game? When was that? 1992?
I remember the days when I used to get squeezed through the turnstile with me uncle, the turnstile operator pocketing the 6 old pence my uncle handed over, and the under-reported crowd figures under Pirate Westwood – nothing’s changed.
Same old Shysters, just more sophisticated accounting methods.
every single club allardice has been at and sacked from has been relegated ashley sacked him because hes shite wise and keegan was his mistake slowly but surely he is learnig you dont get to be where hes at unless you have good business acumen kinnear was a d.wise move wise didnt last long ashley will get it right better days will come sound financial footing will bring success
Sir,
I had already read the guardian report into football finance which said roughly the same thing about our finances, but this filled in many gaps with the year-by-year comparatives.
Overall, a very good article.
The anti-Ashley brigade will, of course, disagree with it but I am sure they subscribe to General Melchett’s view that “if nothing else works, a total pig-headed unwillingness to look facts in the face will see us through.”
Shepherd put £6m of his money into the club and took millions out (before he sold it) yet to some he is a demi-God. He would have turned us into the new Leeds.
I think you’re confusing dislike of Ashley for love of Shepherd. Shepherd was an old crook, only after the gravy train and the status of Nufc.
Ashley is a new crook. Two bellends don’t make a right!
Well i have to say on finance he is doing a sensible job, you cannot allow wages to be over what you make.
For that you can applaud Ashley.
But for many other points you cannot, like for example Hiring Wise and Buying Xisco, Selling Milner over KK’s head etc.. etc…
While Ashley is in charge we will NEVER GO FORWARD as a team, when any player is for Sale, with our habit of selling our BEST Players (Milner/NZogbia/Jose Enrique/Carroll etc..)
Sometimes you cannot always find a bargain like Tiote and relying on Cheap/Free Agents to fill quality places is only bad for the club, take the fact 2 BIG players gone (Jose and Andy) havent been replaced, and when they have (Pieters & ??) they will not be BETTER but WORSE.
Much like our team at Arsenal, if that was with Andy and Jose etc.. we could of done better Arsenal were there for the taking. We didnt attack and look beyond pathetic at making chances all we could do is defend which we did.
Talking about defending, sometimes you need to spend good on quality, Tiote was a Bargain but others aint gunna be as lucky, I believe Colocini is worth EVERY penny we spent on him and say for Cheap you dont find quality like that not even with Willo etc..
Future with Ashley means,
* we will be sound finacally
* having a YES-MAN as the manager
* sell our best players for cheaper (Worse) replacements
With the chopping/and changing with selling our better players, like which will happen NEXT season, we will never be a force and will be forever lurking around mid-table or maybe lower.
All i’ll add is its hard to say this seasons team is better, ATM they aint, i preferred the team we had when we got promoted, which says alot.
Thank you for the time, effort and figures. It all makes fantastic reading and whole lot of sense.
I am a true newcastle fan and by saying that I know everyone that is one and reads this, suddenly takes a moment and thinks what that means to themselves.
It is our life!!! Owners will come and go!! It is what they leave that we need to criticise them for ( like shepherd !!). Our current owner, that everyone is quick to slag off!! To be honest dragged us out of a pot full if *#}^ Yeah football wise we have done nothing but MA has brought us to the very top of the division of clubs that are finacially stable and in this day and age that is the foundations of a successful club.
Why do we always look for the negative rather than the positive?? Surely as a toon fan we need to be positive rather than looking to blame someone!!
human nature I’m afraid
A very impressive article, alot of facts I think we over look as fans, who just want to see big name/big money players come in and don’t care or consider where the money comes from. I as a Newcastle fan care more for the survival of the club in the top flight than a name on shirt. Look at man city for example…tevez cost a fortune n earns a fortune and there’s still no loyalty to the club, city or fans
Quite a divergence of opinion as normal. The trouble is with the majority of Newcastle fans is that they read the red top rags every day and believe what they read especially if it is anti-Ashley. They just want to see big ticket players sign for the club regardless of the real cost to the club and the chance that we will slip back into the Shepard gravy train pit. Shepherd and his cohorts bled this club dry and knew exactly how to pander to the majority of fans bring in big ticket players on high wages. One player does not make a team. We have seen this over and over yet the crowd still bay for more, like a frenzied mob whose appetite can only be satiated by taking every credit card and maxing them out with no thought of repayment. You watch Man City have a major problem because their players are on the top wages – who will take them on when Man City do not want them, the players refuse to take pay cuts while under contract they would rather sit it out on the bench than drop their wage demands and play the game they are supposed to love (see Alan Smith comments when offered an opportunity to leave the Park but with a cut in wages – ‘I would rather SIT OUT my contract’) Tevez very few clubs can now afford him. Our own experiences of players on high wages they are very difficult to move on if the do not work out. Give me a team of sensible players who are proud to wear the shirt and are able to be blended together into a playing unit that wins more games than it loses. We will not win the league this season so stop acting as if we will, we will make steady progress based on a firm financial footing and in a few years have a team that is continually in the top sections insteda of a Keegan like attempt. Keegan is a GOD to some because he managed with a cheque book in hand just like David O’Leary, I never want to see my club back in that mould. I do want to see Newcastle play for as many years as the good lord gives me to spend on this earth and unlike most of you I have far more behind me than ahead of me. I keep saying all you can do as an honest real supporter is make yourself heard every saturday encouraging the team not wasting your breath insulting Ashley and Lambias they have their faults, we may never really understand them but guess what you have your faults also.
ashleys lack of communications is what riles me the most but all this about trophy signing and we can’t afford them any more is rubbish!! if we sign a striker (which is what these trophy signings are) for 20 million and is on 80,000 a week and he scores 20 goals a season over a 3 year contract and those goals get US into a top 6 finish then that is good value for money. if the same striker flops and scores 9 goals a season then its a waste of money, so how about we Pay the money and get a proven goal scorer to spearhead or new season???? ……just saying like.
Dan,that striker you speak of does not exsist,strikers who score 20 goals a season get bought by the bigger clubs, and as for Newcastle finishing in the top 6 that’s years away mate, look at money man u, Liverpool, man city, Chelsea, spurs and others have spent in recent years, then there are other clubs with better squads than ours, one 20m striker will not get us there I’m afraid. Dutch Dave is right, we need afew secure years finishing top half and above Sunderland, there are only afew trophies to be won, stoke won one last season with a squad that cost very little but with a good spirit and with their fans behind them, Dutch Dave is right, let’s get behind the players we do have rather than twisting about the players we don’t.
I’ll amend my last comment, I meamy to say that stoke made Europe with their squad of player, Birmingham won a trophy and look what happened to them, look all I’m saying is let’s get behind our players who ever they may be
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