By David Owen
February 25 – Newcastle United has announced an after-tax profit of £9.9 million for the year to June 2013, after booking a £10.6 million profit on player trading. If the business continues to progress in the same way this year Newcastle look set for a serious profit in 2013-14. Maybe as much as £30 million.
The figures include the period in January 2013 when a clutch of Francophone players, including Mathieu Debuchy, Yoan Gouffran and Moussa Sissoko joined the Tyneside club, currently lying eighth in the Premier League, in quick succession.
Consequently, as it explained on its website, the club’s cash outlay on players during the year was “significantly higher”, at £28.7 million, than the £11.1 million recouped via player departures.
The £10.6 million trading profit takes account of any unamortised transfer fees originally paid for the departing players. These included strikers Demba Ba and Leon Best, sold to Chelsea and Blackburn respectively, and goalkeeper Fraser Forster, now enjoying a fine season with Celtic*.
The recent sale of star midfielder Yohan Cabaye to Paris Saint-Germain for a reported £19 million suggests both that cash generated through player disposals should be higher this year than in 2012-13, and that the club may again be able to report a significant profit from player trading.
Turnover climbed to £95.9 million, powered by a 24% advance in commercial revenue. Similar commercial growth is forecast for 2013-14.
With an average Premier League home gate of more than 50,000, the Magpies are blessed with phenomenal and loyal support – a fact reflected in a near 16% increase in matchday turnover to £27.8 million.
With the club managing only a 16th-place league finish, however, media turnover fell 8% to £51 million.
Operational losses were trimmed from £5.1 million in 2011-12 to just £616,000, virtually breakeven.
The club’s total wage bill fell from £64.1 million to £61.7 million, with the wage-to-turnover ratio dipping four percentage points to 64%.
Debt remained static in the form of a £129 million interest-free loan from owner Mike Ashley.
The board said that complying with Financial Fair Play regulations “continues to be a key influence on strategy”.
Everyone at the club wanted “to finish as high up the Barclays Premier League table as they possibly can. If the club can sustain itself as a ‘top ten’ team year-on-year with a stable structure and the right finances, it gives itself every chance of pushing even further.”
* My guesstimate of how much each contributed to the £10.6 million player trading profit – and it is only a guesstimate, based on reported contract lengths and transfer fees – would be: Best £2.5 million; Forster £2 million; and Ba £6 million-plus.
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