Following Newcastle United’s take over by the Saudi Public Investment Fund back in October 2021, fans have seen some good spending but it has not been at the eyewatering levels some in the wider world of football thought would happen. Our change in fortunes on the pitch under manager Eddie Howe has probably been more dramatic in light of that – and with the release of our accounts for the 2022/23 campaign it further proves how far we had fallen behind the now accepted Premier League challengers during Mike Ashley’s tenure, but there is every reason for optimism.
The losses for the last campaign came to a whopping £73 million, but that does not tell the entire story of how our new owners are slowly, but surely, turning the club around, particularly in off pitch matters but there is naturally a long way to go yet before we can be ‘financially competitive’ as acknowledged by Chief Executive Officer, Darren Eales, but the club are still on PowerPlay mode and want to see the rewards and success for their efforts.
“To put it into perspective, we want to be a top-six sustainable club and Tottenham’s latest accounts available (showed the total revenue) was £440m. We are at £250m, so there is a big step even to the lower end of the top six. We have also seen that Manchester City are £710m in revenue in their latest accounts. There is a long way to go in growing those revenues.”
Whilst all that may be true, fans always need to bear in mind with account releases that they are always out of date and of themselves are not that useful, and having finished fourth last season and earned a place in the prestigious Champions League competition in 2023/24 – some Premier League revenue will not have factored into those numbers. Neither would any of our now gained European revenue, so whilst a £73 million loss is quite stark, it will not be the current financial picture and of course, these are official club accounts, and for those who delve incredibly deep they may provide some Financial Fair Play hints that fans care more about in the modern game, but those accounting procedures are wildly different.
So it is no surprise to see that our owners had put in well over a million of their own money for various reasons during this time – and it is notable that they are interest free loans that have been unpaid, so could obviously be turned into additional equity at a later date.
But whilst the accounts do reflect the playing squad investment (post take over we have, of course, signed the likes of Alexander Isak, Anthony Gordon, Nike Pope, Bruno Guimaraes and amongst others that spending alone is in excess of £400 million), they also show positives, there was a £70 million rise in turnover in their first year (39 percent on the previous year), and we already know that will naturally rise next year simply down to our Champions League involvement.
Equally, the Sela shirt sponsorship deal is not included, nor is the new kit contract.
From a fans perspective when it comes to further playing squad investments and potential January transfer window signings, we are back to the unknown question of where we sit on a Financial Fair Play front as additional spending could well, at this moment in time, now rest on sales and cashing in. Eales, for the record, denied that was an issue and that we were ‘compliant’.
With Newcastle preparing for the very high profile clash with Manchester City this coming Saturday, we are yet to enter our winter break in 2023/24, but there is no denying that this year has been more disappointing than any of us hoped for given the optimism after last year. We are out of the Champions League and are sat in ninth place in the table and that has inevitably led to speculation that Sven Botman, Bruno Guimaraes and Alexander Isak, in particular, could be off for the right price.
That speculation will only increase with these losses being announced, and whilst there will undoubtedly be some tough decisions to be made if tempting offers come in, the club know the true position and will know what needs to be done.
It is not like we are Chelsea or Manchester City in our spending after all.
“Any decision we make will always be against the backdrop of the medium to long-term benefit for the club. It’s difficult to say specifically on certain players, but I can say that, if we’re going to get to where we want to get to, at times it is necessary to trade your players.”
Fans will read that with their own perspective in play, but if we do have an FFP issue, a high profile sale might be a quick fix – but it is not the only option available, so we will see what the remainder of the month holds.
Image Source: unsplash.com