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Opinion

What am I missing?

7 months ago
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Here we are again, who would have thought it…..

Every day I wake up with that hopeful excitement that when I check my phone, there will be a sensational breaking news Newcastle United headline coming out of St James Park.

I am sure that is a common disappointment that many endure at all clubs at this time of year. Last year, when promotion was secured and seemingly positive times were ahead, we were all left a little flat on what was a less than positive summer window. We had in Rafa, a manager with at least a decent track record in the transfer market. Atsu became a Toon player and in Florian Lejeune was a player that seemed to be a real decent signing. Merino on loan, Manquillo and Murphy secured – they were signings that held promise but certainly did not set the Tyne alight with passion. We were outspent by almost everyone and even teams in the Championship, which just seemed expected by the end of the window.

Heading out that summer were also some big earners and overall, after the banked instalments on the deals for Sissoko and Wijnaldum and others from previous season, something close to break even or not too far off it. I have forecast last season’s wage bill to have been somewhere close to £65m including payroll taxes and coaching staff. The January window brought some improvement with three loan signings. Dubravka and Kenedy in particular proved to be vital. Mitrovic heading out on loan, maybe cancelled out by the largely impactless Slimani.

All things considered, I see the club having operated on a total cost of much less than £100m and maybe a £15m maximum net transfer spend. I know many might argue with this but I am a logical person and I have thought this through and simply can not accept the club had a net spend (on transfers) of anything more last year.

The simple numbers are an estimated approximate £115m maximum in costs last season and an estimated £180m in revenue. Of course, that leaves a £65m net surplus after all factors are considered. This is also against a backdrop of the previous year where close to a balance was achieved. Many reported on a £30m plus profit (on transfers in 2016/17) as is also shown on transfermarkt – but it fails to record that the deals for Sissoko and Wijnaldum were paid in instalments.

The financial records show a huge spend on wages in the 2016/17 Championship season which points to mismanagement. From a base wage bill at that point including all of the players that headed out on loan, I am guessing we ended up still paying large chunks of their wages. So to simplify this, the club lost £30m in the promotion year but made £65m last year.

We entered this summer with what should have been around £35m in cash on hand, assuming the negative of the previous year has been addressed. The current season will see us forecast another £180m £in revenue with an estimated wage bill including payroll taxes, coaches and youth players of around £65m. For clarity on where I get this (wages) estimate, ***see the notes at the bottom of this article. Some may be off a little but it is simply a guide and I am confident it is within 10% of accurate overall. Club operating costs are always within £30m I believe, so we have a less than £100m predicted spend.

In terms of transfers, we can already add in (this financial year) more than £10m from Sissoko and Wijnaldum (and others) instalments. Sales of Mitrovic, Sels, Mbemba and Merino have generated close to £40m depending on how the payments are made. The current spend is a maximum £18m assuming fees for the loan of Kenedy, as well as the Muto signing is completed. That is £50m in and less than £20m out, so a 30m surplus. Add to this the £35m cash on hand at the start of the season and before we even begin to think about the £80m surplus for the coming season, we still already have a £65m balance and that includes the loss of the championship year being paid back.

Does anyone here think we will net spend £145m from this point this season? It seems even spending £20m on a player young enough to be sold on in a few years for at least a similar amount, is even off the table. Nothing makes sense anymore at Newcastle United. Not even to those that try to see the glass as half full.

(***Estimated current weekly wage per player per week for this season.

(Shelvey 80, Diame 40, Lejeune 40, Lascelles 60, Gayle 40, Joselu 25, Ayoze 30, Dummett 25, Kenedy 40, Ritchie 50, Dubravka 35, Darlow 25, Elliot 20, Clark 30, Woodman 15, Yedlin 30, Manquillo 20, Sterry 10, Lazaar 25, Atsu 30, Murphy 20, Aarons 10, Muto 40, Armstrong 10, Ki 40, Saivet 40, Hayden 25, Schar 25, Coaching staff 120, youth team 20

(Close to £1m weekly or £52m annually, plus payroll taxes etc close to £60m annually.)
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