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Most Premier League Clubs Heading Into Profit But Will Newcastle United Be A Long-Term Loser?

8 years ago
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The very heart of football is of course opinions and The Mag website is the absolute proof of that.

I do regular/irregular articles and love the feedback they produce, both good and…bad.

I don’t think any of us who write stuff on here (come and join us, sure the editor would welcome all of you onboard Ed; all contributions welcome to [email protected]) think our opinions are better than anybody else’s. It is just a case of getting what you think down on the modern equivalent of paper and off you go.

What about facts though?

Well, the other day I did an article entitled[intlink id=”32069″ type=”post”] ‘Why Champions League Qualification Would Terrify Mike Ashley’[/intlink].

Included in that piece was the following –

‘My point is that these days every club in the Premier League should now make a profit unless they decide not to (Manchester City etc – spending massive amounts on transfers that they know will = a massive loss but don’t care)’

The article produced much debate but one comment from ‘Steve’ said;

‘Absolute nonsense, you’ll be lucky if 2 clubs make a profit this season’

Well I felt I had a pretty good grasp of what I was talking about but thought I’d pull a few facts together to give a bit more weight to what I’m saying.

In April the excellent journalist David Conn did a great piece for the Guardian. He write an article examining the 20 clubs who were in the Premier League in the 2010/11 season and then examined the latest available financial figures available. These figures were for the 2011/12 season and the figures/facts(!) taken from the annual reports that have to be lodged at Companies House.

David Conn revealed all kinds of financial information about each club but one of them was whether each club had made a profit or a loss before tax.

The following all made a profit;
£37m Arsenal
£4m  Blackburn
£1m  Newcastle
£16m Norwich
£17m Swansea
£1m  West Brom
£4m  Wigan
£2m  Wolves

The other 12 made losses as follows;
£18m Aston Villa
£22m Bolton
£4m  Chelsea
£9m  Everton
£18m Fulham
£41m Liverpool
£99m Man City
£5m  Man Utd
£23m QPR
£10m Stoke
£32m Sunderland
£7m  Tottenham


The financial figures aren’t available for all of the clubs for the latest (2012/13) season but certainly the likes of Swansea have reported massive profits again and I’m guessing it could be a similar story as to what is shown above generally for the 2011/12 figures.

Moving forward , next season the popular estimates are that every club will get around £20m extra from the new broadcasting deals.

So my point of clubs now making a profit unless they choose not to is very relevant, if 8 clubs could make a profit in 2011/12, what will the position be now if everybody has an extra £20m handed to them at the end of the season.

On a very simplistic basis, if you added £20m to each club’s 2011/12 figures then seven of the twelve (making 15 Premier League clubs in total!) would have made a profit, two would pretty much have broken even (QPR and Bolton) while the only real basket cases would have been Manchester City, Chelsea and Sunderland!

The two clubs guaranteed this coming season not to make a profit would be clearly Chelsea and Manchester City, plus bizarrely it would appear, very likely Sunderland again.

However,  with the other seventeen I wouldn’t bet against any of them not making a profit.

You only need to look around and see the ever increasing number of American owners, just look at who now owns Fulham.

They aren’t doing it for some mad vanity (or another dark/bizarre) reason as appears to be the case at Chelsea and Manchester City, though even City could potentially make money in the long-term if they get into a dominant position and the riches increase ever further into football.

The Yanks aren’t here to save us, they are here to turn a profit, one way or another.

(To read more quality articles such as this one you definitely need to read our best selling magaazine, pre-order our very special 25 year Silver Anniversary issue of The Mag. Alternatively, order a subscription here – click ‘next issue’ when ordering if you’d like to start with the Silver Anniversary special issue.)

Football is indeed a business these days and each owner(s) will have a different idea of the best way of running their business/club. With the broadcasting deals all Premier League clubs will now be increasing in value and look ever more attractive propositions to ‘investors’, that is while of course they remain in the Premier League.

While all other clubs are spending significant sums to try and ensure they stay in the cash rich Premier League, at the moment Newcastle stand alone, having made a profit(!) so far in the transfer window.

Will that change? We’ll soon find out.

A parting thought.

Newcastle United made a profit of £1m in the 2011/12 figures but the previous season it was £33m profit, thanks to the Carroll sale.

If something  similar happened this season (a minimum spent on incoming players and a significant sale of a player/s)then taking into account the extra £20m broadcasting money, Mike Ashley could knock (take out) £50m off the debt he’s put against the club, a debt comprising of what he paid for it and the debt ran up thanks largely to Ashley helping the club to relegation.

These are serious sums of money and the outlook for owners is only looking ever more positive, so long as you stay in the Premier League.

Mike Ashley gambled last summer when he gave Alan Pardew/Graham Carr no transfer kitty at all, the scant spending on Anita/Bigiramana financed by a sell-off/release of fringe players such as Smith, Best, Lovenkrands, Forster etc.

When relegation loomed, Ashley panic bought in January, the kind of strengthening most of us felt he should have done in the summer of 2012.

Moving forward 12 months, so far we have seen the sell-off/release of players such as Harper, Perch, Simpson and others such as Abeid and Gosling who are clearly trying to be helped out of the door.

My feeling is that we are back to that position of a year ago, a few sensible additions could see Newcastle fly again but instead there is more or less zero kitty. I feel the mini clearout is aimed at potentially financing a Darren Bent or some other striker, with possibly another one or two Bigirimana type signings at best – such as the PSV reserve keeper etc.

This would be a massive gamble in my opinion and one that could see us all lose our (Wonga) shirts.

(To read more quality articles such as this one you definitely need to read our best selling magaazine, pre-order our very special 25 year Silver Anniversary issue of The Mag. Alternatively, order a subscription here – click ‘next issue’ when ordering if you’d like to start with the Silver Anniversary special issue.)

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