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Must Read – Newly released Newcastle United Accounts raise more questions than answers

4 years ago

The club have just released the latest Newcastle United Accounts headline figures.

This is basically the club (Mike Ashley) presenting the headline figures in the way that he wants them to be seen.

Other seasons are bad enough in terms of trying to make sense of them but these headline ones today for the Championship 2016/17 are the most smoke and mirrors ones yet.

It is the equivalent of being handed the most difficult jigsaw puzzle imaginable, with no box to see what the final completed puzzle should look like, and then realising that half the pieces are missing…

Sometime next week there will be more details available when the 2016/17 Newcastle United accounts are able to be viewed online at Companies House, they won’t tell us everything but we should get more details/explanation via them.

Also, be very aware of the timing of the release of these headline accounts figures.

The 2016/17 Newcastle United Accounts should have been filed at Companies House over seven weeks ago but have been held back until now, I wonder why?

Seeing the immediate reaction from both media and fans, Mike Ashley knows he was guaranteed this reaction.

The newspapers will just repeat the club narrative without questioning how the headline figures are arrived at.

This release has been timed perfectly for people now to be more understanding why Rafa shouldn’t be expecting so much, rather than if accounts had been filed 6 or 7 weeks ago when they should have been..

It is 24 hours after the transfer window opened and do you really think this is a coincidence?

Down below is the official Newcastle United announcement but here are a few points and questions to consider.

Aston Villa had a bigger wage bill in the relegation season, spent more money on buying players than Newcastle in the 2016/17 promotion season, didn’t offload nearly as many top paid players as Newcastle did, and yet their wage bill for the 2016/17 season is £61.5m – whilst Newcastle’s is £112.2m. How can this be?

The club do say that over £30m of the Championship season wage bill is for ‘promotion bonuses and onerous contract provisions’, this constitutes almost all of the £37m increase in wage bill on the previous season. I find it very difficult to understand even how our wage bill is higher than Villa’s but this £30m+ figure? Maybe £10m on bonuses for the team/staff but what about the other £20m+? Bonus for Mike Ashley and/or Justin Barnes & Keith Bishop? What and who do the ‘onerous contract provisions’ refer to?

Without answers to questions like these, we can’t all just be saying ‘Eeeh, isn’t it terrible, look at all that money Newcastle has lost, nee wonder Rafa is only allowed to sign loan players.’

Accounts can be presented in various different ways and nothing illegal about it but they can be intended to tell a certain story and confuse the issue…

A lot of coverage will obviously be given to Newcastle ‘losing’ £90.9m in 2016/17 but as well as the club presenting that ‘paper loss’ figure, you have to look at other factors.

At the start of the 2016/17 season, Newcastle had £1.7m in the bank and ended it with minus £8.3m, so £10m worse off in that respect.

Mike Ashley did put some of his money into the club to cover losses in the Championship season but that figure is ‘only’ £15m. So it appears that when it comes to actual cash going in and out in the Championship season, then it is more like a £25m deficit, rather than £90.9m.

The way Mike Ashley chooses to buy and sell players can’t be overlooked either.

The club had already put an extra note in the 2015/16 accounts saying that Rafa Benitez had made a £40m profit on transfers in and out in Summer 2016. However, they also stated that most of that money would be paid over future years.

Mike Ashley is happy to pay for incoming transfers up front but when selling is happy to be paid in instalments. Clearly that approach suits him when it comes to running NUFC and in presenting the accounts, though handicapping the manager.

So for example, Rafa Benitez might sell Moussa Sissoko for £30m but then reportedly that money is to be paid over five years, so only £6m for Rafa to reinvest immediately from that player sale (Are we supposed to believe that Liverpool and Tottenham couldn’t afford to pay more than a small downpayment on Wijnaldum and Sissoko?).

So once again, these Newcastle United headline accounts figures below, don’t give us any idea of how the club have included/used player buys and sales/amortisation.

All of this isn’t to claim that relegation wasn’t a bad thing financially, of course it was, but plus also remember it was Mike Ashley’s fault we ended up going down for the second time in the space of only seven Premier League seasons (plus a couple of near misses).

It is more to say that whilst the figures were never going to be good, the true financial state of the club is nowhere near as bad as these headline figures are trying to convince you that they are.

Newcastle United Official Announcement:

The results reported below reflect very clearly the financial consequences of relegation and the approach we adopted to help secure a return to the Premier League.

(These are the 2016/17 headline figures with in brackets the equivalent ones for 2015/16, then the change between the two seasons)


£85.7m (£125.8m) £40.1m worse off

Operating (loss)/profit

£90.9m loss (£0.9m profit) £91.8m worse off

Loss/profit after tax

£41.3m loss (£4.6m profit) £45.9m worse off

Wages to turnover ratio

130.9% (59.4%) 71.5%


£144.0m (£129.0m) £15.0m worse off

Cash at year end

-£8.3m (£1.7m) £10.0m worse off

Average home league attendances

51,108 (49,754) 1,354 better off

Wages & salaries

£112.2m (£74.7m) £37.5m higher

Playing squad costs are the most significant cost in any football club. There is probably no better evidence of the financial impact of our approach than the wage cost we are reporting for last season.

Whilst the headline figure of £112.2m includes promotion bonuses and onerous contract provisions totalling just over £30m, the underlying annual wage cost remains the highest ever seen in the EFL and is comparable with many Premier League teams for the 2016/17 season.

It is far in excess of Brighton (£40.4m) and Huddersfield (£21.7m), who were promoted alongside us.

Managing director, Lee Charnley, said: “After an at times challenging season in the Championship, everyone connected with the club was delighted when, with two league games remaining, we secured automatic promotion.

“Even taking into consideration the fantastic levels of support during our Championship season, such is the huge disparity in central broadcasting and commercial revenues between the Premier League and EFL, we are reporting a drop in annual income of almost one third.

“An immediate return to the Premier League was vital to restore the financial stability and future prospects of the club.

“With the support and backing of the owner we took what was, in essence, a financial gamble on securing immediate promotion.

“Statistics show how difficult this has been to achieve in recent times, with only five of the 18 teams relegated over the previous six seasons having come straight back up (one via automatic promotion and four via the play-offs). We were the only relegated club to achieve an immediate return to the Premier League.

“We were therefore under no illusion as to the scale of the challenge we were facing.

“Retention of the manager and key members of his coaching team, together with a significant spend to reshape the squad for Championship football, gave us what we felt was the best possible chance of success.

“There were some high profile departures including Moussa Sissoko, Gini Wijnaldum, Daryl Janmaat and Florian Thauvin.

“In addition to Dwight Gayle, Matt Ritchie and Matz Sels, who joined us in June 2016, a further nine players followed in the financial year 2016/17 – Christian Atsu, Ciaran Clark, Mohamed Diamé, Jesús Gámez, Isaac Hayden, Grant Hanley, Achraf Lazaar, Daryl Murphy and DeAndre Yedlin.

“Whilst sizeable transfer fees were earned for the players who left, the cash profile of these deals resulted in the fees being receivable over periods of up to four years.

“Our ability to withstand the financial impact of relegation, and adopt the approach that we did, was therefore only made possible by the continued financial support of our owner, who injected a further £15m interest-free loan into the club in 2017.

“Gaining promotion was the first priority and retaining our Premier League status was the second, both of which were achieved through considerable hard work, at all levels of the club, across every department, and thanks in no small measure to the magnificent support of our fans.”


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