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Tyne Talk

Disastrous Results For Newcastle As Deloitte State Commercial Revenue Is Now The Key Area

6 years ago
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Dan Jones, partner in the Sports Business Group at Deloitte and the main man behind their ‘Football Rich List’ was interviewed today (Thursday) on BBC Radio 4, regarding the latest 2014 Deloitte report which covers income for football clubs in the 2012/13 season.

This is what Dan Jones had to say;

“For the first time ever we’ve got most of the clubs on our list making more money from commercial sources than anywhere else.

“Historically, matchday was always the biggest earner for clubs, then it was TV, now for these biggest clubs around the world it is commercial – which includes sponsorship, shirt sales, partnerships, licensing deals; basically everything that isn’t TV and tickets.”

So putting it really simply, if you started going to matches pre-Premier League, back then pretty much all of a club’s income came from ticket money.

Then as the Premier League era progressed, TV money grew and grew until that was easily the biggest earner for pretty much all English clubs in the top division.

Now we are moving beyond that to where commercial revenue is going to play an ever increasing important role.

As an example, when the current broadcasting deals were negotiated, the Premier League actually settled for a smaller amount than they could have demanded for North America, because the deal agreed has seen matches available on terrestrial TV and so the watching audience has massively grown.

This isn’t due to Premier League bosses simply getting a thrill out of more people watching the English matches, it is because the increased TV audience means that commercial partnerships have become massively more lucrative for the clubs and so every club worth its salt is driving as hard as possible to get as many commercial tie-ups as possible.

Apart from seemingly Newcastle United, preferring every possible space plastered with Sports Direct or the other Mike Ashley brands, the only notable exceptions that Puma make the kits and Wonga is on the shirts.

These are the commercial incomes for the six English clubs in the 2014 Deloitte report, the first figure is the new commercial total for last season (2012/13) and the figure in brackets is what the previous (2011/12 season) commercial total was;

£152.5m (£117.6m) Manchester United

£143.0m (£112.1m) Manchester City

£83.9m (£70.5m) Chelsea

£62.4m (£52.5m) Arsenal

£97.7m (£80.2m) Liverpool

£44.9m (£41.5m) Spurs

Newcastle have dropped out of the Deloitte Top 20 ([intlink id=”38810″ type=”post”]see this morning”s article[/intlink]), down to 25th, so there is no breakdown of their new total into Matchday, Commercial and TV revenues.

However, last season Newcastle United’s total income was £93.3m (115.3m euros) and split into Matchday £23.9m, TV £55.6m and Commercial £13.8m.

We know that the new total is 111.9m euros (down 3.4m euros) which in terms of rough comparisons with last year would be around £91m.

In his infamous programme notes, Joe Kinnear has stated that the Commercial revenue is £17m for the season just gone, so in Newcastle’s case it seems clear that Commercial revenue will still lag way behind Matchday revenue and probably be around about one third of the TV revenue.

Tottenham’s Commercial revenue may have ‘only’ gone up £4.4m but their starting point was over THREE times higher than Newcastle United’s in that 2011/12 season.

There is no good way of dressing up these figures, while every other club is trying desperately to punch above their weight we have Newcastle United as simply a tool for the rest of Mike Ashley’s empire.

What could/should Newcastle United’s commercial revenue be? That is anybody’s guess but it should clearly be much higher than what it is and the potential is massive.

Many of you might say you don’t want to hear about boring off the pitch stuff but when yet again we are lectured as to why we can’t afford to buy players, just stop and think for a minute about the money we could be making.

The head bloke from the Deloitte report says Commercial Revenue is the key growth area for successful clubs, I suppose if you see no wrong in how Ashley is running Newcastle United then you’ll think Dan Jones and Deloitte have got it wrong as well.

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