NUFC reveal latest financial results

Llambias and Ashley hard at work
Newcastle United have today made available the latest set of accounts for the year ending 30th June 2011.

The headline figure is that is a small loss of £3.9m was recorded during this period – our lowest loss since the days of Champions League football!

Turnover increased from £52.4m to £88.4m largely due to our return to the Premier League and the increase in TV revenue that promotion to the Premier League brings with it. Ticket sales are also up 16% with the club citing an increase corporate hospitality income being the main reason behind this, which figures as season ticket prices were frozen on our return to the Premier League.

Player wages are currently running at about 60% of our turnover (60.6%to be precise) which brings us roughly to what is considered to be a “safe” level of wage commitment. In the Championship wages accounted for 90.5% of our turnover while wages in our relegation season wages accounted for 82.7% of our turnover.

In terms of player sales, which is what most people really want to know, we made a profit of £5.4m.This includes the sale of Andy Carroll, so even after the famous £35m we only made £5.4m by the time we paid for everyone else. The club say that since then they have spent a further £25m on fees and wages for players. We’re also owed £5m from somewhere (Andy Carroll probably) and do all of our buying and selling in cold hard cash, which may explain partially why we get good deal for players as we pay everything up front.

The debt level is the same – £140m owed interest free to one Michael James Wallace Ashley although we have now cleared all third party debts such as the rather large overdraft we had during the Championship season.

I haven’t been able to check this all out by looking at the accounts myself yet. They’ve been submitted to Companies House today and usually take a while to appear as available on their website. Once they are available though I’ll get my £1 out and have a look to see if it all matches up or if there is anything hidden in the detail. In my experience the headline figures usually match, but there are usually some hidden bits that don’t get published, such as any plans for debt repayment. The devil is inevitably in the detail.

Derek Llambias was suitably pleased with the results however. he took time out from kissing Ashley’s rear end to say this to the club website. Please note, it’s quite long-winded and basically says everything that I’ve said anyway.

“The Club’s financial results for the year end June 2011 are extremely strong. We can now count ourselves amongst very few clubs across the UK and Europe who are operating at close to break-even.”

“What is particularly pleasing is that we have achieved this whilst also ensuring we have a strong squad sitting firmly in the top third of the table and currently pushing for a European place.”

“Some of the key financial principles we set in place when Mike bought to the Club back in 2007 are now beginning to reap rewards. Most notably, our adherence to a strict transfer policy which avoids, or limits wherever possible, the acceptance of dated payments for players bought or sold. We believe it is a far healthier financial model to settle full transfer fees for players up front, not dated over a period of years.”

“We have dealt wisely in the transfer market and reinvested the income received from player sales into improving the squad. Our net cash spend on player transfers to June 2011, which includes the sale of Andy Carroll, was a receipt of £5.4 million, with a further £25 million in cash spent on transfers and players’ wages since June 2011.”

“We have also worked hard to address an inherited wages-to-turnover ratio which was unsustainable. Wages now account for just over 60 per cent of turnover and we feel this is a healthy and affordable level.”

“A further significant achievement has been to clear all of the Club’s interest-bearing debt, which in 2006/7 was costing £6.5 million a year just to finance the debt. Mike Ashley continues to provide loans totalling £140 million interest-free, for which we are extraordinarily fortunate. Once again, Mike has not taken any money out of the Club.”

You can say whatever you like about Mike Ashley, but the fact is that he is turning the finances of our club around. He may have done it in a ham-fisted way with a sledgehammer approach, but you could argue that tough approach has been needed. The results speak for themselves. We’ve gone from losing £37.7m a year when he first took over to losing £3.9m now, via a stint in the much less lucrative Championship.

The gutting thing is that our loss would have been less that £1m for the year had we not collapsed against West Brom in the final game of last season! Fine margins…

The promising thing is that next season could be even better. With a new sponsorship deal with Virgin Money to add to the mix, higher gates with more corporate revenue, more TV games, higher prize money for finishing higher in the league and chance of European qualification to boot we could in actual fact reach break even or even better next season.

Things, financially, are looking up!

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.

92 thoughts on “NUFC reveal latest financial results

  1. What ****ing idiots man. Those responsible should be ashamed of themselves, charged with criminal damage, interrupting a sporting event, made to pay for any damages and banned for life from any NUFC fixture.

    Knobheads :-/


  2. bedsheets and brickwallers cannit help themsevles .. its cus hes not from the north east and they suspicious of him ..


  3. …there are some right tossers following the toon these days case in point tonight. Don’t care what anybody says it’s true and anybody thats been to games knows it. People call the mackems scum, but there is sadly scum in our own backyard now and nobody has the balls to sort them out. People forget women and children go to football games as well, not that the average man with more than 2 brain cells should have to put up with it either like.


  4. Anyone that went to Darlo in pre season will agree with me..what a ******* disgrace, they need more stewards with cameras and more police at these ‘friendlies’ and reserve games, coz these are the times that the morons come out and try this ****, well be there to pounce on them next time, how many times is this going to be allowed to happen? Make an example of the c###s, name and shame and tell their friends and family.


  5. I call it the “****head factor”
    Alcohol does not turn someone into a ****head, they are a ****head before they drink and as they consume more alcohol, they become an even bigger ****head.
    It is the same as when a group of ****heads gather together in one place. Collectively they become an even bigger bunch of ****heads as a result..
    Really poor form is you ask me… 👿


  6. Well the financial results are certainly welcome news. It shows that Ashley finally seems to be getting a handle on things.

    I know some are proclaiming that its proof that he has known what he’s doing all along and that he was just making tough unpoular decisions for the good of the club. That may certainly be true of the last year or so but it definitely hasn’t been the case from the beginning.

    Ashley has admitted himself that he made many mistakes initially. He has admitted that he didn’t really understand what he was getting into.
    A lot of the bad decisions earlier were just that – bad decisions. Things have, to his credit, been improving significantly lately though.

    Ashley has taken the loan on interest free because it is expedient to him, not because he is some loving benefactor.
    There is no way he would want to pay the interest to a bank.
    He could have charged the club interest payable to himself, but to what end?
    The club isn’t operating at a profit so he would just be increasing its debt by paying himself interest. That would be counter-productive particularly if he plans to sell it some time in the reasonably near future.


  7. Ripping down the signs was a bit futile. He’ll just put them back up again.

    Then again Ashley could have just called it SportsDirect Arena @ St James’ Park, left the St James’ Park sign up and stuck more SportsDirect signs up. I doubt anyone would have really said anything.

    It’s clear Ashley wanted to initially buy Newcastle as a kind of marketing tool – he told SJH when he bought it that he wanted to use it to help him break into markets like the far east.
    I guess the SportsDirect signs will give him value as free advertising.
    There was, however, no real need to remove ‘St James’ Park’.
    It comes across as quite provocative, whether intentional or not, and to then spin it with the whole “demonstrating the name change to potential advertisers” was about as crass a way to handle the situation as anyone could concoct.


  8. Pootle – Futile, and also law breaking. Criminal damage no less 😯

    Makes me laugh you know. people bang on about SJP being “defaced” yet we’ve now had paint swashed all over the walls from fans and now other fans ripping stuff off the wall inside the ground.

    Different when they were Shepherd Offshore signs though for some reason. Reet classy firm that one is also…


  9. Pootle @ 82
    Has Ashley made mistakes in the past 😯 Wow that is news, I haven’t heard it mentioned before now…. Thanks for rehashing it once again.. There is always a black lining to every silver cloud I guess 😕


  10. @88

    Did I say it was breaking news, you Antipodean ass?

    I merely posted it as a refresher for those who think Ashley has been scheming the clubs rise this way from the beginning. Also as a reminder to those in the ‘he’s a successful businessman so everything he does must be right’ camp, that in fact Ashley himself has admitted that he made big mistakes.

    Good to see you up your usual high standards of thoughtful riposte. :mrgreen:


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