Newcastle United have reported a profit for the second successive year of £1.4m. For most companies of their size, that would be disappointing, but in football it’s a good outcome to be in the black. The new Premier League television deal that begins next season should lead to even better financial results.
The wages-to-turnover ratio is over two-thirds and hence well above the recommended 50 per cent level, but it is still much better than at many Barclays Premier League clubs.
Newcastle United have reported a profit for the second successive year of £1.4m. For most companies of their size, that would be disappointing, but in football it’s a good outcome to be in the black. The new Premier League television deal that begins next season should lead to even better financial results.
The wages-to-turnover ratio is over two-thirds and hence well above the recommended 50 per cent level, but it is still much better than at many Barclays Premier League clubs.
In the last few years Newcastle have adopted a value model of buying young players from France and elsewhere rather than vanity signings. Stability and self-sufficiency has been the goal.
The current position in the Barclays Premier League is disappointing, but they have been stretched by their success in the Europa League which involves more matches and less in the way of financial rewards than the Champions League.
Managing director Derk Llambias commented, ‘We don’t have some sort of oil well under our pitch. We have a bit of coal, which we can’t dig up. We’re not Manchester United. What we want is to play entertaining football.’
The club said in a statement, “While last year’s figures, which included an overall profit of £32.6m, were significantly boosted by the £35m sale of Andy Carroll to Liverpool, this year’s figures give a clearer indication of the club’s positive performance overall with profit after player amortisation standing at £1.4m.
“The club has also re-entered the list of the world’s top 20 revenue-generating clubs after increasing turnover to £93.3m – representing a 5.4% increase on last year.
“Turnover has been boosted by last season’s strong performance on the field, with a fifth-place finish in the Barclays Premier League swelling TV income by 14.6%. That figure is set to continue rising next year courtesy of improved broadcast agreements.
“While the average attendance at St James’s Park has risen to 49,936 – an increase of 2,190 on last year – ticket revenue has fallen by 7% after the club froze season ticket prices with its 10 and nine-year season ticket deal and continued its commitment to making football affordable through a variety of ticketing initiatives including a 50 per cent season ticket deal and regular special offers during the season.
“As a result of these initiatives the club saw a hugely significant increase in the number of season ticket holders and members. The number of season ticket holders reached its highest level since 2007.
“Commercial revenue fell by 12.7%, though the latest figures do not include income from the club’s new partnership deal with Wonga. That partnership, which is effective from the 2013/14 season, represents a significant increase on the club’s previous commercial agreements.
“While operating costs have remained steady at £21.6m, operating profit is down from £13.3m to £7.5m. A key factor is an increase in the club’s wage bill, which has risen by 20% to £64.1m following the signings of a number of key players, including Cabaye, Marveaux, Santon, Ba and Cisse. That puts the club’s wages-to-turnover at 68.7%, an increase of 8.1% rise relative to last year’s ratio.”