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‘Great start but…Newcastle United owners need to be doing a lot more’

2 years ago

What a start to the new season for Newcastle United.

For the first time in seven opening fixtures at St James’ Park, we have taken all three points. Not since Spurs were dispatched in August 2012 with goals from Demba Ba and a late Hatem Ben Arfa spot kick, have we started the season so well.

The difference this time, is that we will surely end the season higher than we did back then, which was a lowly 16th and only five points above the relegation zone.

A lot has been made of our opponents on Saturday and how poor they were. They might have been, but let’s not forget, they were making their first appearance in the Premier league in over two decades, were backed by over 3,000 travelling fans and so much wanted to make an impact.

On that basis, I’m going to conclude that we were all the more impressive, almost two-thirds possession with 11 corners to 1 and the crucial statistics, two goals for, and none against. We were patient, controlling and totally dominant. And even at 1-0, yours truly wasn’t anxiously watching the clock. “Never in doubt” was what I said to my son as we left the ground.

And all of this, against a backdrop of rumour and speculation as to whether we can get some further signings over the line before the end of the transfer window. I for one have been advocating that we should. Maybe I’m impatient, but having waited for CAshley to exit the scene and considering our only silverware in my lifetime was won in Budapest when I was six months old, I think I’m entitled to want things expediting a little.

So, let’s analyse the window.

We’ve bought a keeper, who personally, doesn’t look like too much of an upgrade on Dubbsy. I hope I’ll be proved wrong, but if nothing else, we now have two competent keepers rather than one.

We’ve not really bought a left back, Matt Targett having been such an influential member of last season’s turnaround.

In Sven Botman we have acquired a quality centre half (if Maldini wanted him, that does for me) and given Elliot Anderson isn’t going off on loan (or so it would seem) then we’ve maybe acquired a very good midfield asset, through the backdoor, so to speak. All told, £50 million? The January window saw Chris Wood, Trippier, Bruno and Big Dan Burn arrive, all told, £90 million. So we’ve forked out around £140 million since the takeover, according to my calculations.

That is some outlay, let’s be honest. CAshley might have spent a tenth of that, and before anyone hammers me for suggesting this, I’ll caveat it by also saying, if we were lucky.

However, it’s not the comparison with CAshley that we should be making. Or if it is, it should be the 14 years of serial under investment on the pitch, if not right throughout the club. Put another way, we have ground to make up. Lots of it. Add the fact that we have been acquired by these new Newcastle United owners, led by the Saudi PIF, and are reported to be the wealthiest football club on the planet, I don’t think £140 million is that much personally. Chelsea paid £100 million for Lukaku and Man City paid the same for Grealish.

I’m not advocating that we should be gambling £100 million on a single player but we’ve made ourselves public enemy number one by embracing the new Newcastle United owners, so it has got to be worth it. Finishing top ten or even as high as eighth this season doesn’t cut it for me, and despite the fantastic manner in which we’ve come out of the blocks, a few injuries and suspensions in key areas will adversely impact our prospects. Look at our substitutes yesterday and I hope you get what I mean, Sean Longstaff, Ryan Fraser, Chris Wood and Jacob Murphy.

There has been much said about FFP on this forum these past few weeks and how we are at, or close to, our limit. I really question this. Sure, our spending is limited by these rules but we are allowed a £5 million loss per year, which can be boosted by a £30 million equity injection. So, that’s £105 million over a three year period.

Now, what follows might not be totally accurate, but it hopefully gives a sense of why I think we can (and should) be spending more. I’m also happy for it to be ripped apart and for me to be put right, if it isn’t a fair representation, after all, it’s what I’ve gleaned using Google!

Using information for the period 2019 to 2021, the club made a £1 million pre-tax profit over these 3 years (made up of a £41 million profit in 2019, a £26 million loss in 2020 and a £14 million loss in 2021). However, the impact of Covid-19 has led to an addendum to FFP regulations in an attempt to ease the financial and regulatory burden on football clubs during this exceptional time. I’ve seen reference to this being estimated to provide £40 million in allowable losses for NUFC during 2020 and 2021 (equivalent to the actual losses posted, although it’s not clear to me exactly how this is calculated and the numbers being the same is no doubt a coincidence). Anyway, assuming this is in the right ball park, this can be further adjusted by £30 million relating to something described as ‘good’ expenditure which covers stuff like deprecation, women’s football, youth and community development etc. So that would imply a ‘budget’ of £176 million (£41 million plus £30 million plus £105 million).

To understand what £176 million means in practical terms, we need to understand our often discussed friend, player amortisation, which is how the transfer fee is written off over a player’s contract. So, Chris Wood over five years would account for £5 million per year. The full £140 million outlay since January would equate to £28 million, assuming five year contracts. Further, assuming we’ve increased the pay bill by a further £50 million per annum (taking into account some players who’ve left e.g. Gayle and Clark) that’s £78 million, which is comfortably below the aforementioned ‘budget’ of £176 million and for me, surely provides headroom for at least two more quality signings.

Add to this the fact that CAshley’s frugal approach meant that he didn’t grow commercial revenues during his tenure means that should the new owners make inroads into that, FFP gets more than a helping hand. During CAshley’s time, the so called big six increased commercial revenues by between £100 million and £200 million. In the past decade, whilst Man City have gone from £58 million to £246 million, Chelsea have gone from £57 million to £170 million. Even Everton have upped their game and more than doubled their commercial revenues in the past couple of years (from £30 million to £76 million, between 2018 and 2020).

Our Fun88 deal is worth £6.5 million; the top six are earning £35 million from their equivalent shirt sponsor. We should be looking (and hopefully the new Newcastle United owners are) at all kinds of sponsorship deals and trying to be as creative as the likes of Juventus whose shirt sponsor, Jeep, is part of Fiat and therefore the Agnelli family who own the Old Lady.

My final point concerns TV revenue. Finishing eighth will not mean European football and that is where there are even further riches on offer. In addition, without European football, we also get into that Catch 22 situation where we are less likely to be able to attract top players. Bruno Guimares is being lauded as possibly our best ever midfielder. That’s maybe going a little far, for now at least, but will he stay if we cannot offer European football?

The new Newcastle United owners have been a breath of fresh air (despite my personal misgivings over the political allegiances of those based in this country) but I really think they should be doing more. Time will tell, but I’m hoping there’s more fantastic news before the window closes.


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