Newcastle United 2014 full accounts statement
Posted on May 31st, 2015 | 22 Comments |
Some personal notes on the accounts
Turnover
The overall turnover figure of £129.7 million is the highest in the club’s history. This was also true of many other Premier League clubs though due to the commencement of the new blockbuster broadcasting deal. On the £129.7 million turnover, the club made a profit after tax of £18.7 million, and an operating profit of £4.7 million. However, Ashley is yet to pay any tax at Newcastle United as losses from previous years have been deferred once again.
The new three year TV contract which kicked in during the period for these accounts saw Newcastle United media revenue leap a huge 53.3% from £51 million to £78.3 million, meaning they are now a huge 60.4% of total turnover. The corollary of the above at most PL clubs is that local fans who actually go the the games are becoming more peripheral as their share in the club’s income becomes ever smaller. If this continues apace, they are almost in danger of becoming just a piece of colour and noise to make games more entertaining for TV viewers around the world.
Looking at the matchday figures, average attendances were negligibly down from 50,517 to 50,395. Matchday revenue is down from £27.8 million to £25.9 million, and is now only 20% of the club’s total turnover (down from 29%). This small decline has been blamed on the lack Europa League football which the club enjoyed in the previous season, which is certainly a very big part of it, alongside mediocrity and boring ‘route one’ football.
Commercial revenue has grown significantly, by almost 50% from £17.1 million to £25.6 million, which to be fair isn’t too bad. However it is still lower than it was when Ashley bought the club and there is still the Sports Direct issue. Despite the fact that Newcastle United have provided a level of free publicity to Sports Direct which has been worth £10s of millions of pounds every season, Newcastle United still had to pay Sports Direct £2.8 million (up from £841,000) for goods purchased on “normal commercial terms.”
Debt
Though the club’s net debt figure is now down to £94.9 million (from £133.5 million), the club still owes £129 million to Mike Ashley as it did in the previous year. However, this is counterbalanced by something which caused much controversy when the figures were released, the fact that the club has around £34 million in its coffers due to a cash inflow of over £38.5 million over the year, the fourth biggest cash balance in the Premier League, behind Arsenal, Manchester United and Tottenham according to the Swiss Ramble piece I mentioned above.
False economies?
Mike Ashley managed to cut the costs of Directors’ pay even further, from £261,745 to £189,771. To put this in perspective though, this is a fraction of the salary of ONE half decent first team player. Previous Managing Director Derek Llambias left in June 2013, and it seems that the club was rudderless for several months until Lee Charnley was announced as Managing Director in April 2014, along with John Irving as Finance Chief. Promoting from within has saved Ashley further £10,000s, with the aggregate renumeration for the highest paid Director falling from £176,894 to £106,793. However, Lee Charnley’s almost catastrophic decision to retain the similarly cut price John Carver as the club’s head coach after the depature of Alan Pardew might have cost the club tens, or even hundreds of millions of pounds if the club were relegated and coundn’t get promoted again. It shows once again that Ashley’s policy of appointing cheaper but sub-standard staff like Charnley, Carver and others to top positions, all to save relatively small amounts, is highly risky, with the club standing to lose far more than they could ever gain. The recent huge increases in Premier League broadcasting rights has left this policy looking even more misguided. This penny wise, pound foolishness has undoubtedly been one of the main reasons for Ashley’s failure at Newcastle United since he bought the club in 2007.
With the steep rise in broadcasting revenue and turnover, though the club’s wage bill has gone up from £61.7 million to £78.3 million, the wages to turnover ratio is down 4% to 60.3% (from 64.3%). On it’s own, this seems like a healthy figure, if the club is well run and doing well like Southampton (59.3%), Chelsea (60%) or Swansea (64%). However Newcastle have been performing more like Aston Villa (59%), Hull (64%) or Sunderland (67%) (all figures from the Telegraph). They need to up their quality, or risk losing the biggest prize of all, Premier League football and Premier League money.
Although depleted, Newcastle still have a decent mid table squad about the same as West Ham, as well as a similar turnover (West Ham’s was £114.8 million over the same period). One must ask again after yet another relegation struggle if it is being hobbled by the misguided economies in the coaching staff mentoned above, most notably the Manager / Head Coach. The idea of John Carver being the manager of a club like Newcastle United, with sacked Championship manager Steve McClaren being viewed as aspirational is clearly absurd. You have to pay dozens of players, but you only have to pay one manager and one Manging Director, so it’s usually worth getting really good ones.
Newcastle United Accounts 2014 (PDF)
NUFCBlog Author: workyticket
workyticket has written 1095 articles on this blog.
Headlines has Patrick Viera as the favorite for the NUFC head coach job, that plus rumors of all kinds of money being spent on bringing in player reinforcements.
Strange the timing seems to coincide with the more recent extension for season ticket purchases.
Personally the two leading candidates just don’t thrill me, one never having managed anything, the other a mediocrity recently let go by Derby, where he failed at a promotion attempt, from the second tier.
As for players, I say put your money where your mouth is Ashley, then some of us may believe some of what you say.
I would advocate that the fans give up on Season Tickets altogether and only pay at the turn-style so to speak, putting more pressure on the club to perform, but I know few want to go in that direction, other than those with lousy seats.
It will be business as usual and yeah there may be a few bucks spent on players, certainly not enough to field a side that’s really competitive, but enough for most fans to get their football fix at every home game.
McClaren will show up, Carver will stay, along with the other coaches, who have failed to arrange a decent defense or score from a set piece during their brilliant coaching stay here, most their first coaching jobs ever.
The old adage “you get what you pay for” fit’s this club
perfectly, from the list of know nothings that have been hired because they came cheap, Mort, Wise, Llambias, Pardew, Carver, Stone etc., Charnley and NEXT! McClaren, forget Viera, he’s only a distraction.
That’s your future Newcastle fans, whether you like it or not.