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Essential reading as Chris Holt dissects the Newcastle United 2017/2018 accounts

3 years ago

There are very few revelations in the Newcastle United 2017/2018 accounts released on Thursday (18 April 2019).

Deloitte had already released turnover, matchday, commercial and Media incomes.

The fans forum had told us Ashley intended to recoup his loan and anyone looking at the squad since promotion can see there’s been little expended on increasing the wage bill.

The exact wages, other costs, profits and structuring of loan repayments are clarified though, so here follows an overview of the figures from 17/18 and how they fit the trend since the year after Ashley bought the club.


Broadcasting of course makes up the vast majority of income. At £126.4m this is now five times the amount the club received when Ashley bought the club in 2007 (£25.9m), this remains the only revenue stream to have grown in Ashley’s tenure.

Matchday income of £23.9m is down almost £1m from our previous Premier league season ending in 2016 (£24.7m). Both seasons had 21 home games but the club attracted over 55,000 more spectators in 2018 (1,062,622) compared to 2016 (1,006,917), but given the matchday totals, the average ticket cost last season was £22.49, compared with £24.53 the season McClaren was fired and Benitez arrived.

Matchday revenue still falls well short of the levels the club commanded when Ashley bought the club, almost £10m less. Cheap tickets are excellent for supporters of course, but we all know the dwindling prices reflect the dwindling product rather than offering value for great quality and investment made on the pitch.

Commercial income of £26.7m fell £1.5m shy of the £28.2m Deloitte reported ahead of the official figures. There’s no indication at the moment as to why the discrepancy, but it means that what we thought was going to be a record commercial performance for the club ultimately fell shy of what the club could generate in 2007. As always, we have to remember that the club outsourced the catering operation from 08/09, allowing it to be more profitable from a smaller turnover, but this only allows for a one off drop. Subsequent falls have to be justified by something else.

The accounts don’t tell us what has led to the fall but clearly a toxic relationship between owner and fans and the perception that merchandising is run for the benefit of his own shop rather than the club contributes to a significant fall in the clubs earning potential from stay away supporters. Less significant is the free advertising that continues to be provided to Ashley’s shops. The accounts include a promise that in future payments will be made to the club, but a similar promise appeared in the 2015 accounts and nothing materialised in 3 years after that so this remains to be seen.

By comparison, Everton have not only outsourced catering but also merchandise and still been able to report year on year growth of financial income. In 2007 Everton earned £7m commercially, four times less than Newcastle’s £28m. Now Everton have not only reined the difference in but surpassed Newcastle to earn over £30m commercially.

Totting those income streams up, Newcastle earned £178.5m in the 17/18 season, £50m more than in any previous season. Of the other 14 (outside of the top 6) in the Premier league, only Everton surpassed this with £189m.

In any normal circumstances, regardless of diminishing matchday and commercial income the earning power of the club remains among the best of the rest and provides no excuse whatsoever for the club to be scraping around the bottom half of the league.


Before July 2017 the club applied a paper cost of over £20m that covered the wages of players that would not get another game (Colback, Lazaar etc) up to the end of their contracts. That (along with a £9.9m promotion bonus) lifted the wage bill to £112m. I’ve left that paper charge out and looked only at actual wages paid. Which shows that rather than a fall there’s been a small increase in the annual wage bill.

Whether this included a bonus for finishing in the top ten is unclear. It’s been stated that Lee Charnley received a 100% bonus lifting his remuneration from £150k to £300k, still very low for a Premier League Chief Executive. But unlike in 2017 when the promotion bonus was confirmed as being £9.9m, there’s no corresponding note in the accounts for 2018.

After wages, all the other costs incurred by the club dropped by £2.6m in 2018. I suppose this could have been a result of fewer games being played than in the championship. 2011 also saw a drop following promotion in 2010 so it seems to be a pattern. Regardless, costs have not varied out of a £7m range of £21m to £28m in the decade since Ashley’s program of outsourcing and cost cutting when he arrived and we remain in that range. A move which has saved the club an average £6m a year, almost £62m since 2008.


The £17.6m Operating profit is the second largest in the club’s history. The only time the club turned a higher profit was in 2015. The following summer Steve McClaren was handed £80m worth of bargain basement players that couldn’t be organised into a coherent team that would survive relegation.

If the tight ship, the wage management and penny pinching transfers have put us in a position to invest reasonably large sums again, then let’s hope we don’t repeat the same mistake of bringing in the wrong players and giving them to the wrong manager.

When player trading is included, three previous seasons have been more profitable and in 8 years the total profit has been £76m.


Within the accounting period debt remained unchanged. Ashley put in £10m for wages but had it paid back before the year end. However at the end of the accounting period the club had £33.8m left in the bank. Almost as if by design. Exactly enough to pay off all the short term loan outstanding to Ashley and reduce the debt to him to the level it was in 2009 prior to relegation, £111m. It’s claimed that Mike Ashley will not seek to be repaid any more of this debt before he sells the club.


It’s all well and good looking at what happened a year ago, but where does that leave us this summer? To ballpark the financial position in June 2019 we can use the figures from 2018 which should not change much in terms of revenue streams.

Everything on the left is income, everything on the right is outgoings or savings. These have to match as Ashley won’t spend what we don’t have. What we were told today is the income on the left added up to £178.5m turnover and on top of that we received £22m of income from transfers made prior to the financial year (Wijnaldum & Sissoko mainly). A total of £200.5m to spend.

We were also told the outgoings and cash balances on the right. All of these figures appeared in the accounts except what was remaining for transfers. From now on I’m ball-paking and happy to be corrected. Charnley’s press release claimed the net spend was £53.3m (£62.2m spent, £8.9m recouped). If it was I don’t know where they found the extra money. The accounts say that acquisitions for the year cost £50m but disposals recouped £30m which would be a £20m net spend and make more sense of the £16.7m the club has said was left over.”

So that was last season, and allows us to ballpark this season, which we haven’t received all the income from as yet and don’t have any accounts for.

We started the season with almost £34m in the bank, but Ashley wanted his loan repaid so that was wiped out. That left us in the same position as last season with about £200m to spend, but without an overdraft to repay and having ended up spending much less this year than we did last year, there should be about £70m swilling around come the summer.

Again, it’s very much like summer 2015 again. It was last year too, but then Ashley prioritised half the kitty going to himself. We’re assured that won’t happen again. If not, ensuring Rafa Benitez is the man to spend this money is of paramount importance. The idea that we’ll blow another opportunity for significant growth by investing cheaply in the wrong people, player and manager, rather than doing things the right way is too awful to contemplate while at the same time has the feeling of horrible inevitably given Ashley’s history.

You can follow the author on Twitter @bigchrisholt

You can also keep in touch with all of Chris Holt’s blogs via NUFC Miscommunication, NUFC-Ashlies Blogspot and BigChrisHolt on Tumblr


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