Newcastle United finances leave £28.5m unexplained
The Newcastle United finances from the 2013/14 season have just been announced.
The headline figures that they have announced are;
Broadcasting revenue up to £78.3m from £51.0m
Matchday revenue has fallen from £27.8m to £25.9m
Commercial revenue is up to £25.6m from £17.1m (new deals with Wonga/Puma)
Club turnover has risen from £95.9m to £129.7m
After playing trading and tax, there is a profit of £18.7m which is up from £9.9m
The operating profit is £4.7m compared to a £0.6m operating loss the previous season
Mike Ashley has not reduced the club’s ‘debt’ of £129m to him.
The glaring thing that isn’t explained stands out like a sore thumb.
The revenue has gone up by £33.8m (from £95.9m to £129.7m)
The operating profit has improved by £5.3m (a loss of £0.6m becoming a profit of £4.7m)
So what the limited information released by the club doesn’t explain is how costs have gone up by a massive £28.5m!
The club have given us the broad picture of where the money has come from – in other words the TV deal, cash on matchdays and money from sponsors.
However, there is absolutely nothing to tell us where the money has been spent and to account for a near increase of £30m in costs, before player transfers in and out is added/taken away.
So the club are telling us that the normal costs of running the club have increased from £96.5m to £125m.
What is very telling, is that the club have not told us what the ratio of wages to turnover is, something that they have been very keen to tell us in the past as that amount has been reducing as wages have stayed relatively the same in recent seasons whilst the turnover has gone up.
If we had been told the wages to turnover ratio then we could have worked out what the wages had actually been and whether the wages had somehow gone up by a massive £28.5m in one season, or we’d be asking where else that money has gone….?
Of course there is no suggestion that anything illegal/untoward has happened, just that we are not being told where the extra £28.5m of costs have come from.
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