Newcastle have announced a post-tax profit of £9.9m for the year ending June 2013. The figure represents an £8.5m increase in profit on the previous 12 months and, according to Newcastle, is down to “player trading, a strong commercial performance and a significant reduction in operational losses”. This is the third profitable year in a row for owner Mike Ashley.
Newcastle made a £10.6m profit on player sales, the bulk of which came from the sale of Demba Ba to Chelsea, although £28.7m was paid in transfer fees on the likes of Mathieu Debuchy, Yoan Gouffran and Moussa Sissoko.
Newcastle have announced a post-tax profit of £9.9m for the year ending June 2013. The figure represents an £8.5m increase in profit on the previous 12 months and, according to Newcastle, is down to “player trading, a strong commercial performance and a significant reduction in operational losses”. This is the third profitable year in a row for owner Mike Ashley.
Newcastle made a £10.6m profit on player sales, the bulk of which came from the sale of Demba Ba to Chelsea, although £28.7m was paid in transfer fees on the likes of Mathieu Debuchy, Yoan Gouffran and Moussa Sissoko.
A 24.2% increase in commercial revenue drove overall turnover up to £95.9m from £93,3m, while matchday turnover was also up and operational losses significantly down – from £5.1m to £616,000.The wage bill fell to £64.1m, with the wage-to-turnover ratio down four per cent to 64 per cent. This is still well above the recommended 50 per cent level but compares favourably with many clubs. Debt remains static in the form of a £129million interest-free loan from owner Mike Ashley.
A statement from the club’s directors made it clear they believe a long-term strategy of financial responsibility will bring rewards – despite renewed criticism of owner Mike Ashley in the wake of Yohan Cabaye’s recent departure.
The statement read: “As supporters will be aware, finances are a significant issue for all football clubs given the introduction of Financial Fair Play into the Premier League in addition to UEFA’s Regulations.
“Complying with FFP continues to be a key influence on strategy and something we have been working hard at over a number of years.
“Everyone at this club wants to finish as high up the Barclays Premier League table as they possibly can. If the club can sustain itself as a ‘top ten’ team year-on-year with a stable structure and the right finances, it gives itself every chance of pushing even further.
“Matchday and commercial revenue is a key driver because that’s where the club can compete with – and outperform – its competitors to enhance its spending capabilities.The process requires patience but we remain absolutely committed to growing the club in a responsible and sustainable way.”
This statement is unlikely to reassure supporters who have accused Newcastle owner Mike Ashley of showing a lack of ambition because of the reluctance to spend money to improve manager Alan Pardew’s squad.
The argument that lacklustre spending by Ashey will be justified by the arrival of financial fair play rules is something of a gamble. It still remains to be seen how these complex rules will be implemented in practice or whether they will be subject to a legal challenge.