By Paul Nicholson
March 28 – Newcastle United have recorded only their second year of profit since billionaire Mike Ashley bought the club in 2007 for £135m. The £1.4m profit is a drop on the previous year’s £32.6m profit, but substantially better than the finances at Coventry (English Championship) and Dunfermline (Scottish Division 1) who both fell into the hands of administrators yesterday.
Newcastle’s figures again show the importance of trading well in the player transfer market on the financial bottom line.
Last year the £32.6m profit included, and was largely made up by, the £35m that Liverpool paid for Andy Carroll.
Newcastle were active in the transfer market but the biggest impact on the finances are player wages. High-profile signings like Yohan Cabaye, Marveaux, Papiss Cisse, Demba Ba (now at Chelsea) and Davide Santon, have pushed the salary bill up to 20% to £64.1m. That puts the club’s wages-to-turnover at 68.7%, an increase of 8.1% rise on last year.
The club’s turnover increased by 5.4% to £93.3m which pushes England’s north-eastern giant into the world’s top 20 revenue generating clubs.
The main driver of increased turnover has been a 14.6% increase in TV income, driven by a fifth-place league finish.
Commercial revenue dropped by 12.7% and although average attendances were up 2,190 to 49,936, revenue was 7% lower due to various ticketing initiatives and cheap season and half season ticket offers. The figures do not take account of the new Wonga partnership agreement which will become effective next season.
Coventry cling on as Birmingham sail close to the edge
English Championship club Coventry City FC flirted with administration order as the owners of the Ricoh Arena brought and administration order against the club for the non-payment of £1.3m in rent, but then withdrew that order. An independent administrator for the business has been appointed and is hopeful that a compromise can be negotiated between the club and the Arena owners, while aloowing the club to continue to play at the Ricoh Arena. While the club has an administrator it is not technically in administration and so could escape the Football League’s 10-point deduction penalty for clubs in administration.
Meanwhile there are concerns over the state of the finances of near-neighbour Birmingham City, also in the Championship. Hong Kong-based owner Carson Yeung is currently awaiting trial in Hong Kong on money-laundering charges. Rumours have continually circulated that the club is out of cash.
Unforgiving financial wind north of the border
A Scottish court yesterday appointed accountants PKF as interim administrators of Scottish Division 1 club Dunfermline Athletic. The court order protects the club from the immediate threat of being wound up over a £134,000 tax debt.
The 128-year-old club has accumulated debt over several years, according to the administrators, “mostly from existing and past directors”. Money will now need to be raised to fund the club’s day to day operations while PKF talks with “creditors and potential buyers of the club to try to ensure it has a viable future”.
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