The depth of Newcastle United’s financial problems has been revealed with the first set of accounts from Mike Ashley’s spell as owner. The club made a pre-tax loss of £34.1m in the year to 30 June 2008. Of the annual turnover of £100.9m, £73m was accounted for by wages, or 72 per cent by the club’s income. About 60 per cent is generally accepted as the safe limit. The accounts confirm that after buying Newcastle for £134m, Ashley had spent another £100m to keep them afloat, including £20m on cutting debts.
The depth of Newcastle United’s financial problems has been revealed with the first set of accounts from Mike Ashley’s spell as owner. The club made a pre-tax loss of £34.1m in the year to 30 June 2008. Of the annual turnover of £100.9m, £73m was accounted for by wages, or 72 per cent by the club’s income. About 60 per cent is generally accepted as the safe limit. The accounts confirm that after buying Newcastle for £134m, Ashley had spent another £100m to keep them afloat, including £20m on cutting debts. Ashley has admitted publicly that he was unaware of the financial difficulties that faced him, having chosen not to study the club’s books before his purchase. The accounts show that £21m was spent on compensation to former directors. Douglas Hall and Bruce Shepherd for ‘loss of office’, which is a very large amount for a company the size of Newcastle. The dismissal of Sam Allardyce, the former manager, reported in a payment of £4.6m to him and his backroom staff.
The financial picture is unlikely to improve this financial year. Season ticket sales and home crowds have been dropping appreciably. Income from corporate boxes is also falling and a low finish in the Barclays Premiership seems unlikely, affecting prize money. The Newcastle United Supporters Club has been promoting a boycott of all official club merchandise.