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Improvement? Yes, but let’s not turn into Everton, please, and thank you.
Newcastle United filed their financial results for the 2021/22 financial year last Friday… with good and bad outcomes baked into them.
The figures published by the organization cover the financial performance since it was acquired by an ownership group comprised of PIF, PCP Capital Partners, and RB Sports and Media in October 2021, along with the three months before that and still under the Mike Ashley ownership.
A loss after tax of £70.7m was reported by Newcastle United for the 12 months ending 30 June 2022. Most of the losses were “driven mostly by the investment in the playing squad during the January 2022 transfer window,” according to the note published by NUFC.
On a brighter note, there was a revenue increase as it went from a figure of £140.2m in the previous filed year to a sum of £180m in the last 12 months leading up to June 2022.
One important factor for that to happen, as noted in the original post, was the return of crowds to St. James’ Park with the COVID-19 pandemic and on-location attendance restrictions in the rearview mirror and boosting matchday revenues.
There were also improvements and increases in the “commercial and media rights,” with those linked to “the club’s league standing improving through the season.”
It is also fair to highlight how the new ownership “has injected additional capital into the club” since the end of the accounting period, aiming at “improving the financial position of the business” of Newcastle United.
Darren Eales, appointed CEO of the organization after the takeover, said that “this is an ambitious, long-term project,” although he warned all parties involved with the club that the financial success of everything “goes hand in hand with our performances on the pitch.”
Eales believes Newcastle “have come a long way in the past few months,” although he acknowledges there is still “a long way to go” for NUFC to succeed as a sports organization. “We are looking to the future with confidence,” he finished.
Newcastle better watch out and avoid further losses if they want to comply with the Financial Fair Restrictions. The club spent £90m+ in Jan. 2022 (five players signed), although that is expected to not-so-negatively impact the accounts of the organization as Newcastle starts featuring better players that can later be sold for higher fees, balancing the numbers a bit.
Dan Ashworth, the sporting director of Newcastle, had already admitted in the past that the vast investment in players carried out through past transfer windows was always going to be “unsustainable,” making it clear that it’s going to be a slow developmental effort going forward.
Another thing to keep in mind is the wage bill, which in the past few months has skyrocketed from £106.8m to £170.2m because of those transfer signings, along with the wages paid to Eddie Howe and the rest of the staff he brought into Newcastle. No need to mention the new owners had to pay a fee to former Magpies manager Steve Bruce to get rid of him before landing Howe, which also hurt their accounts.
Newcastle’s owners know they will need to increase revenue streams if they want the club to keep growing. “Our long-term objective remains unchanged,” they said.
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