Newcastle United Finances Ending 30th June 2011

[Christmas Tree 4725]

Newcastle United Limited today filed its annual accounts for the year end 30 June 2011.

 

2010/11 was a landmark year for the Club financially, achieving close to break-even for the first time in its recent history, whilst at the same time retaining and building a strong squad which is currently sitting sixth in the Premier League.

 

The overall operational loss for the year after amortisation was just £3.9m, compared to a loss of £33.5 million in 2009/10 and £37.7 million in 2008/9.

 

Promotion to the Premier League resulted in a 69 per cent increase in turnover, from £52.4 million in 2009/10 to £88.4 million in 2010/11, principally the result of a three-fold increase in TV revenue.

 

Ticket sales revenue rose 16 per cent, from £20.9 million in 2009/10 to £24.3 in 2010/11, largely the result of an increase in corporate hospitality income associated with the Club's return to the Premier League. Just under a million fans visited the stadium in 2010/11, the third highest attendance in the country.

 

The Club has worked to bring its wages-to-turnover ratio down to a long-term sustainable level. In 2008/9 wages accounted for 82.7 per cent of turnover, rising to 90.5 per cent in the Championship season 2009/10. For the year 2010/11, wages accounted for 60.6 per cent of turnover.

 

The net cash spend on player transfers to June 2011 was a receipt of £5.4 million, which includes the fee for the sale of Andy Carroll to Liverpool FC in January 2011. The Club has since spent a further £25 million in cash on players and wages.

 

The Club has a strict policy in respect of player transfers, with the emphasis on paying and receiving full transfer fees up front rather than accepting dated payments over a number of years. When Mike Ashley acquired the Club in the summer of 2007, he inherited outstanding deferred transfer payments totalling £36 million for players past and present. Under the new policy, the Club is now owed £5 million.

 

Thanks to the financial support of the owner Mike Ashley, the Club has now cleared all of its third party debts, which stood at £76 million in 2006/7 and incurred finance costs of £6.5 million. The debt to Mike Ashley remains £140 million, which continues to be provided interest-free by the owner.

 

The Club secured a new two-year shirt sponsorship deal with Virgin Money in January 2012 and announced plans to sell full naming rights to the stadium in order to maximise potential revenue streams.

 

Newcastle United's Managing Director Derek Llambias said: "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."

 

The full annual accounts, including the financial statements of the Group and the Independent Auditors' Report for the year have been submitted to Companies House today.

[Happy Face 29]

Overall good news. Do I bite my tongue and say "wonderful" or do i point out the rose tint to some of the statements?

[trophyshy 7083]

£5.4 million POCKETED

[Christmas Tree 4725]

Overall good news. Do I bite my tongue and say "wonderful" or do i point out the rose tint to some of the statements?

 

bite it

[Happy Face 29]

Some other amounts...

 

Mike Ashley’s Magpies finished the financial year - which ended on June 30, 2011 - with an operating profit of £13.3m.

 

the value of playing staff dropped by £17.2m in the period

 

This meant the club made an operational loss of £3.9m.

 

The club sold players worth £36.7m

 

spent more than £25m on bringing talent to Tyneside.

 

http://www.chroniclelive.co.uk/north-east-news/evening-chronicle-news/2012/03/08/newcastle-united-reveal-annual-accounts-for-2010-11-72703-30490016/

 

Not sure how the last 2 tally with £5.4m net receipt.

[ewerk 30611]

Agents fees and signing on fees probably account for the difference.

[Craig 6682]

Regardless, we're being reported in a positive light for once which is extremely refreshing.

[south_cheshire_toon 0]

As I'm not from Newcastle nor live in the area, I don't know the day to day goings on at the club nor what the 'feeling' is of the people of the ground.

I would imagine no matter what happened there will always be people who will hate / like Ashley and that has to be excepted.

Someone just posted a 'Pocketed' post, and not knowing the details I can't comment.

 

But what I would say is that this, of the face of it, looks good and is a positive way forward regarding the finances and the fortunes of the club.

 

If people are moaning at not spending any money because of the Carroll affair then imagine what the sentiment must be like at Arsenal ?

[Guest Your Name Here]

 

It's cost the club over £60m to get into a position where it is almost breaking even. Could be argued that's a bit shit considering the club broke even in 2005 and made a profit in the two years before that. Also worth considering how much money we lost through a completely avoidable relegation... DL claimed it cost the club £50m. Oh, and there is of course the lost revenue from apparently giving away our bluechip advertising package to SD for nowt.

 

The improvement in the clubs wages to turnover ratio shouldn't be dismissed, but the 'hey aren't we doing a great job with the finances thing' isn't as clear cut as the propaganda would like everyone to believe.

 

There's also the question of whether or not 11/12 is going to represent the peak of our league position curve under FMA. It's hard to see how we overtake the big clubs with big ambitions.

 

 

[Howmanheyman 33221]

It's cost the club over £60m to get into a position where it is almost breaking even. Could be argued that's a bit shit considering the club broke even in 2005 and made a profit in the two years before that. Also worth considering how much money we lost through a completely avoidable relegation... DL claimed it cost the club £50m. Oh, and there is of course the lost revenue from apparently giving away our bluechip advertising package to SD for nowt. The improvement in the clubs wages to turnover ratio shouldn't be dismissed, but the 'hey aren't we doing a great job with the finances thing' isn't as clear cut as the propaganda would like everyone to believe. There's also the question of whether or not 11/12 is going to represent the peak of our league position curve under FMA. It's hard to see how we overtake the big clubs with big ambitions.

Good point.

 

We are still in debt to Mike Ashley as well, payable on demand. We are not debt free.

[Happy Face 29]

For 8 years matchday income was getting on for £35 million.

 

£24 million is 2000 levels. It's up on the championship year, but disappointing for a PL season.

 

Any report on how the revenue breaks down? Interested in commercial income.

[Guest Your Name Here]

For 8 years matchday income was getting on for £35 million.

 

£24 million is 2000 levels. It's up on the championship year, but disappointing for a PL season.

 

Any report on how the revenue breaks down? Interested in commercial income.

 

And with most ST holders on the ten year deal the revenue stream from gate receipts can only increase through an increase in prices for 'casual' supporters. With little scope for our on pitch performance getting better match day revenues therefore look unlikely to increase. There is the Europa Cup option but its a shit competition and supporters across the board seem to have little interest in it.

 

[Tom 14011]

There'll be 75000 at Old Trafford tonight for a Europa League match & I'm fairly sure they had the same a couple of weeks back, with City getting 40'000.

 

If you can get through the group stages it's worth it.

[Baggio 0]

Interesting points being the wage bill, they've done a fantastic hob of improving the squad while shaving so much off it. Also how they demand fees up front when selling and buy the same way, with the financial fair play rules kicking in I don't think many clubs will have that sort of cash to hand to purchase our best players while we will hopefully be in a position to pick up a few bargains from clubs desperate to get money in in one go.

[Kitman 2207]

Great. Looking forward to the team being strengthened further in the summer.

[Christmas Tree 4725]

Fao Ewerk

 

The Club has a strict policy in respect of player transfers, with the emphasis on paying and receiving full transfer fees up front

Edited March 8, 2012 by Christmas Tree

[Happy Face 29]

[Happy Face 29]

 

2011 Media income based on Villa's released details, commercial based on difference between Turnover and the sum of Media/Match.

[Kitman 2207]

Graphs are fucking fantastic, aren't they? Almost as interesting as accounts.....

[Baggio 0]

There'll be 75000 at Old Trafford tonight for a Europa League match & I'm fairly sure they had the same a couple of weeks back, with City getting 40'000.

 

If you can get through the group stages it's worth it.

 

I think it was Fulham who announced they made something like £9 million from there run in Europe a few seasons ago, more so in gate receipts than prize money I would have thought.

[Happy Face 29]

Graphs are fucking fantastic, aren't they? Almost as interesting as accounts.....

 

Aren't they though?

 

.....hang on, are you being sarcastic?

[ewerk 30611]

Didn't the club make a huge fuck up when they outsourced the catering at the stadium? IIRC they lost a lot of revenue because of the deal.

[Kitman 2207]

Graphs are fucking fantastic, aren't they? Almost as interesting as accounts.....

 

Aren't they though?

 

.....hang on, are you being sarcastic?

 

 

Me? Never!

[Kitman 2207]

Didn't the club make a huge fuck up when they outsourced the catering at the stadium? IIRC they lost a lot of revenue because of the deal.

 

S'pose it's that old revenue vs profit argument. Possibly the reason they outsourced it in the first place was it wasn't making any money.....

[Happy Face 29]

Graphs are fucking fantastic, aren't they? Almost as interesting as accounts.....

 

Aren't they though?

 

.....hang on, are you being sarcastic?

 

 

Me? Never!

 

They're great man.

 

That commercial drop-off is what I was wondering about earlier. If that estimate for 2011 is close to being right it's shocking. It would mean our commercial income is almost a third of what it was when Ashley arrived. It's been said money is tight, but in the same period villa have almost trebled theirs from £6m to £18m and arsenal have added about 50% to go from £30m (where we were) to £45m.