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Tyne Talk

Sacking Managers and Selling Players – The Newcastle Utd Way?

10 years ago

The recent financial figures have to be seen as good news, before player trading was taken into account the club almost broke even, due largely to dragging the wage bill down.

The story of recent years, both under Ashley and before his reign, was one of financial madness with £14m paid out to sacked managers in only three years(!) and players sold every year to try and balance the books.

The following is taken from the excellent Swiss Ramble Blog which explores the finances of football clubs but get the kettle on if you are going to read his full exploration of Newcastle United’s recent trials and tribulations. It is really good stuff but once the Swiss Rambler gets his teeth into something he goes into great detail.

Although the overall profit of £32.6 million is a notable performance, it is evident that this is largely due to the sale of Carroll. Excluding the £36.7 million profit on player sales, the club would have made a loss of £4.1 million. Newcastle’s reliance on player sales is nothing new, as they have made £86 million profits from this activity in the last four years, including £10.8 million in 2008 (mainly Kieron Dyer), £23.4 million in 2009 (James Milner, Shay Given, Charles N’Zogbia and Emre) and £15.4 million in 2010 (Sebastien Bassong, Obafemi Martins and Damien Duff).

However, the big difference in 2011 is that Newcastle very nearly broke-even without the benefit of player sales. Llambias was justly proud of this feat, “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 close to break-even.”

This is very different to previous years when profit on player sales was nowhere near enough to cover large operating losses. In the four years up to 2010, the annual “clean” loss (excluding player sales and exceptional items) was between £27 million to £35 million, which was a recipe for disaster.

By far the largest reason for these exceptional charges was the severance payments made to departing managers, including Graeme Souness, Glenn Roeder, Sam Allardyce and Keegan, which amounted to a staggering £14 million between 2006 and 2009. Not only did this hire-and-fire policy disrupt the club on the pitch, but it also damaged it financially.


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