Newcastle United have finally released their annual accounts for 2016/17 (albeit it over six weeks late), confirming a huge loss of £90.9m, also confirming that the club’s £112.2m wage bill was the biggest ever in Championship history.
As stated by the Chronicle, the loss is believed to have been driven by the ‘dramatic reduction’ in TV revenue (which is claimed to have dropped by a third), as well as the club INCREASING their wage bill by £37.5m, despite relegation – taking it from £74.7m to a whopping £112.2m:
To put this into context, this means our wage bill last season was treble Brighton’s and SIX times Huddersfield’s – with it being claimed that it was the equivalent of that of a mid-table Premier League club (although we were not receiving any of the big top flight income from TV deals).
This does show just how important it was that we sealed promotion at the first attempt, with Lee Charnley describing it as a ‘financial gamble’, but the worry from all of this is what it could now signal moving forward..
Are we (Ashley and co.) about to use this as another excuse as to why we won’t (or ‘can’t’) spend much this summer? That’s what so many NUFC fans are thinking in reaction to the news – and I don’t blame them.
Here’s Lee Charnley’s full statement in response to the annual accounts being released today:
“After an at times challenging season in the Championship, everyone connected with the club was delighted when, with two league games remaining, we secured automatic promotion.
“Even taking into consideration the fantastic levels of support during our Championship season, such is the huge disparity in central broadcasting and commercial revenues between the Premier League and EFL, we are reporting a drop in annual income of almost one third.
“An immediate return to the Premier League was vital to restore the financial stability and future prospects of the club.
“With the support and backing of the owner we took what was, in essence, a financial gamble on securing immediate promotion.
“Statistics show how difficult this has been to achieve in recent times, with only five of the 18 teams relegated over the previous six seasons having come straight back up (one via automatic promotion and four via the play-offs). We were the only relegated club to achieve an immediate return to the Premier League.
“We were therefore under no illusion as to the scale of the challenge we were facing.
“Retention of the manager and key members of his coaching team, together with a significant spend to reshape the squad for Championship football, gave us what we felt was the best possible chance of success.
“There were some high profile departures including Moussa Sissoko, Gini Wijnaldum, Daryl Janmaat and Florian Thauvin.
“In addition to Dwight Gayle, Matt Ritchie and Matz Sels, who joined us in June 2016, a further nine players followed in the financial year 2016/17 – Christian Atsu, Ciaran Clark, Mohamed Diamé, Jesús Gámez, Isaac Hayden, Grant Hanley, Achraf Lazaar, Daryl Murphy and DeAndre Yedlin.
“Whilst sizeable transfer fees were earned for the players who left, the cash profile of these deals resulted in the fees being receivable over periods of up to four years.
“Our ability to withstand the financial impact of relegation, and adopt the approach that we did, was therefore only made possible by the continued financial support of our owner, who injected a further £15m interest-free loan into the club in 2017.
“Gaining promotion was the first priority and retaining our Premier League status was the second, both of which were achieved through considerable hard work, at all levels of the club, across every department, and thanks in no small measure to the magnificent support of our fans. “
What do you make of all this folks??
Does this explain why we didn’t spend much last summer, or is this just their next move towards justifying why Rafa can’t have much money to spend this summer?