How easy is it to spend £35 million?

Black or red?
The first thing to say is obviously I’m not talking about blowing the aforementioned sum on yachts in Monaco, call-girls nor blowing it Mike Ashley-esque at a casino.

Given the nature of this blog I’m clearly referring to the ludicrous sum that Liverpool paid to Newcastle for massively over-hyped English football battering ram Andrew Carroll.

The question should really be: “How easy is it to spend £35 million employing expensive and often surly football players, without getting the sack when they fail to produce?”

Newcastle have clearly got previous when it comes to effectively flushing money down the toilet – see Albert Luque, and Jean-Alain Boumsong for reference. But where do you start with a treasure trove of cash if you are a football manager of a club with a massive and fervent fanbase with a penchant for attacking football? Say also that you cannot offer European football despite the draw of playing in the third biggest stadium in England, and that your owner, despite being a billionaire is unwilling to subsidise you any further following an acrimonious separation from a local hero who was the last person to achieve really get close to fulfilling the ambitions of said fanbase. Where do you start?

Well lets look at the numbers first off. Playing football in the Premier League pays well. Really well. Newcastle’s income is made up of:

TV money – makes up the biggest chunk of money. You get around £18 million from the domestic audience and £13 million from the overseas rights. You also get money from the Sky lot when they feature you on Super Sunday or whatever, with at least £6 million guaranteed even if you aren’t shown on TV 10 times a season. So all in that’s about £37 million from the last year in the Premier League

Match day revenue – Newcastle have the third biggest (and best) stadium in the country. This makes the club £21million in a year. This sounds like loads, but then Manchester United made £100 million from the same thing last year, which is mind blowing!!

Commercial – When you spend your hard earned green (even though only £5 notes are green here!) in the club shop you contribute to players wages. All those pencil cases for your kids and shirts with names on the back for 5-a-side go together to raise a further £15 million for the club. That is £66 million less than Man Yoo make and one of the reasons why Liverpool were such an attractive option for Fenway Sports to buy was because their commercial income dwarfs our own.

The figures above paint a pretty rosey picture. I reckon that to be around £73 million pounds in the coffers from last year. However now comes the bad news. Player’s wages were around £73 million at the time of relegation.

The bill was shorn to £47 million whilst in the Championship and has subsequently gone back up following promotion, for example with better contracts for Andy Carroll, paying £3.5 million for Tiote, half a million on his wages until January and £1 million since he signed on for 6 years in January. Add in paying out £6 million on Ben Arfa plus around another £3 million in wages, and £1.5 million on Dan Gosling and suddenly the money seems to be slipping through your fingers like a colander. Andy Carroll was also on about £2 million a year when he left for the bin-dippers.

Let’s add in the new boys. Yohan Cabaye is apparently on £40k/wk which is about £2 million a year. Ba is on about £50k/wk, as is Marveaux. So all in that’s around £7 million in wages in a year, plus the £4 million for Yohan’s former employers Lille.

In total then I don’t have a clue what the outgoings are, anymore than you lot do. I certainly have no idea what it costs to run a stadium, upgrade a training ground or pay all the other members of staff at SJP and Benton. I don’t know what Chris Hughton was paid when he left, or what Alan Pardew gets in his weekly payslip. Everything in this article is based on speculative conjecture from papers and ‘blogs, so it might all be very wrong.

As a guess I’d say that we probably just broke even last year or squared away a little of the massive loan to Mike Ashley, plus we got the Andy Carroll money. Spending £35 million on player fees would result in a massive loss as the wages aren’t going to pay themselves so I reckon we’ll not see more than about £15-20 million spent on player fees and and the rest will be swallowed up by wages of the squad as it is now, with better contracts being dished out, and those coming in.

For what it’s worth I reckon after a lot of low balling we’ll probably see Erdnig, N’Zogbia and Neil Taylor as the last of the signings over the last two months of the transfer window. One thing is for sure – “Sign Sturridge for £12million, simple LOL” is anything but.

Is anyone able to make a better stab of interpreting the figures than me? Do you feel like I’m underselling the clubs finances, and should we be speculating to accumulate?

Thanks to Michael82 for submitting this article. In the light of Pardew revealing yesterday that all of the money will stay within the club I though that perhaps now was the time to discuss it.

About toonsy

A lifelong Newcastle fan and current webmaster of this very 'blog who has the sole aim of creating a place by Newcastle United fans, for Newcastle United fans.

61 thoughts on “How easy is it to spend £35 million?

  1. Whilst we may not know the detail it’s clear that clubs wish to get player wages down to about 70% which equates to £51.1m of £73m or effectively £1m pw total spend on wages and £20m + on the rest of the club. Hence the problem of Smith & Xisco.

    Also we can assume that the £35m includes sign on fees, agents fees, and the 1st year of wages. A Free agent costs the same as he would if he were bought at the nominal value, eg BA say £5m it’s just that WH don’t get the £7m Ba and his agents do. Hopefully NUFC get a cut as well.

    Question if we have £35m do we increase the £1mpw wage bill and what do we do when the £35m runs out?

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  2. “For what it’s worth I reckon after a lot of low balling we’ll probably see Erdnig, N’Zogbia and Neil Taylor as the last of the signings over the last two months of the transfer window.” – Can’t see this happening.

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  3. David can se those three either turning up or their backup on the shopping list..

    also sorry about inconsistany of £5m or £7m take you pick.

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  4. I can see Bendtner and Long ending up at the Toon. Not the preferred choice of many but better than what we had last season.

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  5. So by that reckoning we’re turning over £25m less now than the last time we were in the PL, although the TV and Sky money has gone up?

    I cannot work that one out to be honest.

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  6. The money has been spent on new dug outs,grass seeds for the pitch,tea bags for the canteen,cutlery,training facilities etc so don’t expect many new signings or anyone over £1.5m.

    I heard that the price of ASDA own brand tea had shot up as well so expect the sale of Jose Enrique to cover mounting costs. 😉

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  7. @7 – Odds mean nowt. Just proves there’s a lot of silly Geordies betting we’ll get N’Zogbia.

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  8. The odds on Novielty markets such as player transfers mean notw , if i placed £50 on Zogs to go to Barcelona the odds would be slashed. The sport traders in the bookies dont look after these markets.

    I remember when I was working for the bookies we get a heap of money fro Brian Kerr to be named as next Leeds boss. And it was all from a the place in dublin where Kerr grew up. We slashed his odds to like 10/1 on yet Kerr was never mention for the job that I ever read.

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  9. what about wages off NUFC balance sheet, Nolan £50k a week, Campbell £45k a week, kuqi and all the kids weve just let go, Enrique soon £50k a week. TRANSFERS should be from the same pot, who the [email protected] pays wage a full year in advance ??? And if we are paying wages a fullyear in advance why hav’nt we come to some agreement with that useless [email protected] smith???

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  10. robledo says:
    July 5, 2011 at 13:30
    what about wages off NUFC balance sheet, Nolan £50k a week, Campbell £45k a week, kuqi and all the kids weve just let go, Enrique soon £50k a week. TRANSFERS should be from the same pot, who the [email protected] pays wage a full year in advance ??? And if we are paying wages a fullyear in advance why hav’nt we come to some agreement with that useless [email protected] smith???

    We arent paying wages in advance , we are budgeting for wages in advance from what I can tell. I know a crazy idea trying to live within a budget.

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  11. Training ground improvements – 1 million max (it’s only undersoil heating ffs)
    BA signing on and agent Fees – 4 million
    Cayabe signing on and agent fees – 3 million
    Marveaux signing on and agent fees – 4 million

    presumably Joses improved contract is another 500k – 1 million a year depending on bonuses so we can take another 3 million off although I always thought wages were an operating cost rather than a capital expenditure

    Thats 15 million max, wages should be covered by savings from Nolan, Cambell and Kuqi

    Still leaves 15 million out of the 30 million cash we received up front for Carroll.

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  12. I run my own business and i don’t pay my staff a year in advance and neither do NUFC. This club needs to show AMBITION not marquee signings not many want fan to see this we all know we need progress year on year.But in business you must speculate or you stand still. A middle of line stategy is needed LETS SHOW SOME AMBITION. 😀

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  13. Great article. It doesn’t matter if you put the facts in front of people though. Much easier to demand 35mill spent than try and look through the books and see it is being used wisely.

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  14. Robledo – no one in their right mind would run a business on a month to month basis not knowing whether you were gonna be running at a profit or a loss come the end of the financial year.

    Unless your name is Fat Freddy Shepherd! 🙄

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  15. David says:
    July 5, 2011 at 13:20
    @7 – Odds mean nowt. Just proves there’s a lot of silly Geordies betting we’ll get N’Zogbia.

    OK, i’ll have to remember that the next time there’s a 100/1 shot in the Derby. It’s sure to win!

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  16. @17. I wonder though, how much immediate ambition you would show if the business was hemmoraging money and required you to loan it a fortune to keep it running. Would you not want to steady it finacially first?

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  17. I’ve constantly said that I couldn’t give a toss about the £35 million as such, but one thing that gets me what goes on from here? Say it’s kept in the club and is used on hidden costs 🙄 what then happens to next year when those costs aren’t required and so on? Do the club have no concept of growing an income?

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  18. @19 – yeah pretty much although I’ve been very generous to the players, their agents and training ground improvements, Cayabes actual fee was covered by Nolan sale although no doubt we gave him a big lump to sign the dotted line
    I can’t imagine we gave the players or agents any more than this and as many people have said wages are an operating cost for this financial year, as long as we’re lower than 60% of revenue they should be covered by incomings (TV, gate money, etc etc)

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  19. Toon Chicken says:
    July 5, 2011 at 13:59
    Robledo – no one in their right mind would run a business on a month to month basis not knowing whether you were gonna be running at a profit or a loss come the end of the financial year.
    Unless your name is Fat Freddy Shepherd!

    The club have fixed income ie SKY and sponsorship. They will use projections in the budget for the income like match day revenue, merchandise sales and arguably they know what income is coming from season ticket sales in advance. As long as the fixed costs are covered by that income they should be laughing.

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  20. Exactly. Which is why the salaries are being talked about on a yearly basis, not because they get paid in a lump sum up front, but because they need to offset that expenditure against their projected income for the year ahead.

    Its not rocket surgery!

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  21. Budgets, fees, wages, renovations, rocket surgery… I can’t wait to see the lads kick a ball around again… 😥

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  22. “Rocket Surgery”

    A mixed metaphor describing a non-existent, yet implicitly high level of qualification. The greatness of this term is in its subtle ability to call someone stupid twice in one euphemism. The irony may go over someone’s head and they would call out that this field of study doesn’t exist.

    😉

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  23. Toonsy- this happens to me every summer. At the start I get excited at the prospect of who might come in. Soon after all the speculation gets me frustrated to the point that I take a holiday myself from it. Check the news to see official announcements then fck off to enjoy the nice weather… 😎

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  24. Toon chicken- GREAT!
    now how do I tell the youngun he can’t be a rocket surgeon after I just got his hopes up… 😕

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  25. Aye – sooner we start kicking a ball the better, at least then we can see how decent a team Pards is putting together, I’m fed up of this transfer window already and we still have two months to go
    Ashley has already stated that the money will go into the club and I’d imagine some of it will go to clearing down debt to him – fair enough its not brain science to know we have to clear down debt

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  26. What happened to the moussa sow link?!
    When I was watching Lille to scout gervinho I was pretty impressed with sow.
    He doesn’t ooze class but his work rate is tops and obviously has a finish.
    Has a bit of pace and a decent touch. I think he would be a good add.

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  27. @toonsy – Neuroscience is one:
    neurotic – a person who is afflicted with a neurosis or who tends to be emotionally unstable or unusually anxious

    Pretty much describes every toon fan, especially around transfer window time 🙂

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  28. @jerseyG

    You say;

    Erding saying he’s staying at psg and fighting for his spot.

    . Another reason I dont need to show my arse in Fenwicks window. 😛

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  29. @20 not monthly yearly. My business has grossed £12.5m last year,but thank you for your wonderful advice.

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  30. Johno – Only Spain mate. Richietoon is going to get a shock when I rock up on his doorstep 😈

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  31. I wouldnt turn down a week in two are spain at this moment in time 🙂 Not going anywhere ourselves this year , new baby n that , so be looking forward to next year big time! By the way loving the new layout of the site!

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  32. Johno – Cheers man. Been tweaking it all day pretty much so it may change again at some point. Making it a bit more “Newcastle” 🙂

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  33. Emma – Do us a favour yeah kiddo? Please stop spamming the board with links to your group. If you some publicity just ask. Stop being a twat about it!

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  34. In response to a few points:
    ROBELDO – The wage bill may have been trimmed by letting Campbell and Kuqi go, but they wouldn’t have been counted as part of the £47m during the champo season anyway. I was simply trying to illustrate that despite income going back up (although to about £20m less than before relegation) costs also go up dramatically. It’s probably also worth remembering that we ran at a loss of something like £20m the year we were in the championship.
    Also you have too much money.

    Stuart79 – we probably are making less than before we went down. Coupled with the fact we still don’t see much sponsorship money yet as Freddy Shepard spent 5y income into the future.

    AngelofDeath – That Everton kit is shocking, but I bet nobody spots the keeper off his line. 😆

    ToonChicken – Rocket surgery! Absolute comic genius… Who’d you steal that from then?

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