Financial Mismanagement
Newcastle United today released their annual accounts statement for the period July 2014 to June 2015.
Were Newcastle anywhere other than the bottom three the accounts would give some cause for optimism, at face value anyway. With the mega TV deal just around the corner and the promise of another £40m-£50m clear profit for Premier League teams next term, then the club would have been looking very healthy.
In June 15 NUFC had £48.3m in the bank, cash reserves that were up on the previous year. Although they also state that they continue to owe Owner Mike Ashley £129m in the form of an interest free loan. This figure remain unchanged from the previous year.
The headline numbers also make good reading (until you scratch the surface) with operating profit up from £18.7m to £32.4m.
The headlines, once more, hide a nasty truth however. Whilst almost every other club in the premier league continues to grown it’s commercial, media and other non ‘on pitch' related business income Newcastle are going in the opposite direction.
Overall revenue is down, driven by reductions in Media and Commercial income. In an era where English football is the hottest market in the sporting world it seems incredible that a club the size of Newcastle United has actually managed to reduce its overall income in these areas.
Only a significant reduction in players wages and a profit in that period on player sales makes this result look positive. And we all know the consequences of this approach.
With further reductions in ‘TV place’ money, the £80m spent on transfers (far too late), the associated increase in players wages, the cost of sacking McClaren and his backroom plus the costs of Rafa and his team all still to be taken into account, things look grim indeed with the dark cloud of relegation hanging over us.
Only significant player sales and wage slashing will go any way to stemming the haemorrhage that a fall to the Championship will bring.
Yet more evidence that the continued penny pinching, poor financial management and ineffective leadership that has led us to a place where, once and for all, we are done for! What 'business' of this size doesn't even have an FD on the Board for gods sake?
What a joke of a club. What a mess!