Newcastle United: £32.6 million profit after player trading.Newcastle United’s annual accounts were finally released to the public today by Companies House.
These, of course, are the accounts which cover last season, our first since being promoted back to the Premiership at the first attempt. As previously announced in a PR statement by the club’s Managing Director, Derek Llambias, operating losses before player trading fell to -£3.9 million, which is significantly down from a loss of £33.5 million for the period which covered our season in the Championship. However, the club’s overall profit after player trading was a mighty £32.6 million. This of course was due largely to one man, not Mike Ashley, or Derek Llambias, but Andy Carroll, whose sale to Liverpool FC brought in a huge £35 million to the club’s coffers. This is up from a loss of -£17.1 million in the previous year. According to the report, this profit “has been transferred to the club’s reserves.”
Newcastle United debt
On the matter of the club’s debts the report and financial statements reports:
“The overall level of net debt (including shareholder support loans and net of cash) has fallen from £150 million to £130.5 million.”
Basically, this figure is a £140 million pound debt to the club’s owner, Mr. M.J.W. Ashley, minus a positive bank cash balance of £9.5 million. This is still significantly higher than it was when Mr. Ashley took over the club in 2007, when it was around £70 million. However, this £70 million figure did not include the mortgage on the ground which had to be paid off, which took the true level of debt to around £124 million. (more…)
Derek Llambias: The PR offensive continues.As Mike Ashley’s current PR offensive continues apace, Newcastle United’s managing director, Derek Llambias, claimed that the club have had some “nibbles” from “tyre kickers” expressing interest in the club’s stadium naming rights offer.
In the latest chapter of the offensive, planned on the back of an announcement of reduced losses in the club’s annual accounts after the sale of Andy Carroll, he claimed to “sympathise” with fans concerned over the stadium’s latest name change. I’m flattered to say that he also took a swipe at my own hypothesis as outlined in several previous stories on this blog. My hypothesis being that the sponsorship offer, including the highly questionable “showcase” idea, has broken so many rules of the golden rules of sponsorship, and is so overpriced in comparison to similar sponsorship deals (with one rather dubious exception in the North West), that it seems to be a ruse, something which has been planned to fail from the start, as it has for well over two years so far to Sports Direct’s benefit. (more…)
Displaying financial acumen?Newcastle United are set to announce strong financial results, have settled a dispute with the tax office and have frozen season ticket prices for 9 years.
According to an article in The Telegraph, Newcastle’s results for the 2010/2011 financial year – which are due out later this week – are set to show that the club is in good shape. The Telegraph goes on to suggest that they will show the club has made a profit for the first time since Mike Ashley bought it in 2007.
Apparently said results will not include player trading, although we should still have change from the £35m windfall we received from Liverpool for the sale of Andy Carroll.
In a separate article, The Telegraph goes on to say that the results will also confirm that we’ve reached an agreement with the tax office over ongoing disputes we’ve had with them.
The main dispute with HMRC has been about players’ ‘image rights’. This was a kind of tax avoidance scheme where payments to players were labelled as ‘image rights’ rather than ‘salaries’, which meant that such payments could be made to companies rather than individuals and thusly attract 26% corporation tax rather than 50% income tax. This is something that at lot of Premier League clubs have been up to and most have reached agreements with the tax office about it. Allegedly the settlement agreed by Newcastle has already been accounted for by a contingent liability put aside in the previous year’s accounts. (more…)
Toon in Europe - Be careful what you wish for?Ok. So at this point, with 12 games of the season left and 43 points, we are looking to head to Europe; although that could tempt the “Be careful what you wish for” saying.
The squad we currently have is most certainly unable to cope with so many games in such little time if we were to get to the Europa League. Maybe we would follow the same route as Spurs, play almost a reserve team and ‘concentrate on the league,’ but that would be a waste of a flight, wouldn’t it? But is the Europa League good for us? Because after all, its second best, like the League Cup. Would we get any money from it? Not a great deal probably. We would have to somehow get the money to buy in a lot of good players (not just satisfactory) to strengthen the team during the Summer, because put simply, Perch, Williamson and Guthrie aren’t good enough. (more…)
Pardew: More sponsorship, or the players will go!In a move which may or may not be coincidental with the kerfuffle over the club’s recent stadium rename, Alan Pardew has told the Sunday Mirror that though Mike Ashley and Derek Llambias have put the club in a much stronger position finacially, it still needs to bring more sponsorship in.
He also added that if the club failed to bring in more sponsorship, we may lose our best players. The grey gaffer started with praise for Mike Ashley and Derek Llambias’ financial stewardship the club, though it is still in more debt than it was when Ashley gained control of the club in the summer of 2007.
