Charnley issues warning as NUFC’s annual accounts are released

Today has seen the release of Newcastle United’s annual accounts, representative of the year ending June 30, 2016.

While today’s figures do not show accounts for the club’s current season, managing director Lee Charnley has delivered a warning regarding the ‘unacceptable and totally unexpected’ relegation last season, suggesting that, despite Mike Ashley’s continual investment to finance this year’s promotion bid, June 2017’s accounts could be a sight for sore eyes.

Here are the key points, facts and figures taken from today’s announcement:

  • Profits down 28% over this period (Operating profit down from £19.1m to £0.9m)
  • The club have received just £720k from their 18 Championship matches this term, against the £12m revenue from 16 live TV games in the Premier League last season.
  • Net debt increased from £80.7m to £127.3m
  • Net cash spend on players was £70.7m, against £23.8m the previous summer (Due to money invested on Mitrovic, Wijnaldum, Mbemba, Thauvin, Saivet, Shelvey and Townsend)
  • During the relegation season (2015/16) the clubs profit (after tax) dropped substantially from £32.5million to £4.6m year on year.
  • Ashley’s investment this season has enabled the club to maintain a significant budget, allowing the retention of  Rafa Benitez on a yearly wage of £5m.

Lee Charnley released the following statement after today’s announcement:

“The 2015/16 season was extremely disappointing for everyone connected with the club.

“Significant sums of money were spent to strengthen the playing squad in the summer 2015 and January 2016 windows, which also resulted in an increase in our annual wage bill. In the context of this spend, relegation was both unacceptable and totally unexpected.

“The financial impact of relegation is difficult to overstate and this will become evident in our next set of financial results for the year ending June 2017.

“The biggest impact by far is the dramatic reduction in centrally distributed income that comes with dropping down a division; the reality being our income in this area is forecast to fall by over £30m compared to 2015-16.

“To highlight the differences, our 16 live TV games last season earned us £12m in revenue. Contrast this with 2016/17 EFL live fees which, based on our current number of confirmed appearances (12 away and 6 home), will earn us a total of £720k.

“To illustrate further the cost of relegation, 2016/17 marks year one of the new Premier League TV deal and the team that finishes in 18thplace this season is expected to receive in the region of £30m more revenue than we did for the same place finish last year.

“Our approach, following relegation, was to make further sizeable investment in our playing squad in preparation for the EFL Championship season ahead and our annual wage bill is, we believe, still above and beyond many current Premier League teams. Whilst not without financial risks, this strategy was adopted in order to maximise our chances of promotion at the first time of asking.

“Outgoing transfers will ultimately generate a significant net player trading surplus for the summer 2016 transfer window but, due to the cash profile of the deals, this will result in a net cash outlay in 2016-17.

“Our adopted strategy has therefore only been made possible by the cash injection from our owner, who continues to provide interest free funding to support the club’s operations, never more important than during this financially challenging season.”

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About Olly Hawkins

Olly has been a Junior Magpie from birth. As a season ticket holder and avid Newcastle United fan - he eats, sleeps and breathes all things NUFC.