Newcastle United’s accounts for the last financial year show a healthy increase in profits but the relegation-threatened club acknowledges that this surplus has since been spent and, right now, football results are all that matter.
The results show the club had £48.3m in the bank at the end of their accounting period, but the club’s net spend on players during the subsequent transfer windows amounted to just under £80m.
After announcing a post-tax profit of £32.4m for the financial year ending 30 June 2015 – a significant rise on the £18.7m figure achieved 12 months earlier – the managing director, Lee Charnley, put the figures in context, with Rafael Benítez’s team second bottom of the Premier League and in real peril of missing out on the £100m available to top-tier clubs under the terms of next season’s broadcasting deal.
“We appreciate that at the present time, football results and not financial results are what our supporters want to see from us,” Charnley said. “That said, it would be wrong for the club not to acknowledge the submission of our accounts for the period July 2014 to June 2015
“We understand, however, that what you want to see are results on the pitch. There are still 21 points to play for and lots can, and likely will, happen over the next seven games. We of course acknowledge the seriousness of our situation. However we must remain positive and retain the belief that we can secure our Premier League status and we are doing everything we can to support Rafa and the team.”
With this season’s £80m spend on new players having wiped out their cash reserves and Newcastle’s first-team players lacking relegation clauses which would reduce their wages by around 50% in the event of the team dropping into the Championship, it is clear the impact of dropping out of the Premier League would be devastating.
A financial report released along with the latest accounts said: “During the year ended 30 June 2015 Newcastle United generated a profit after tax of £32.4m (2014: £18.7m) and a net cash inflow from operating activities of £39.1m (2014 £32.9m). Of the £39.1m cash generated £23.8m was spent during the financial year on the playing squad (net of disposals). The remainder (which formed part of our cash balance at 30 June 2015 of £48.3m) has been spent (or has been contracted to spend) in full since 1 July 2015.
“In total, the summer 2015 and January 2016 transfer windows have seen a net spend on the playing squad of just under £80m, and a significant increase in the club’s annual wage bill.”
The accounts also show that Mike Ashley, Newcastle’s owner, has not used any of the profits to reduce the £129m debt he is owed by the club in the form of interest-free loans from him and companies under his control. None of this sum has been repaid and the Sports Direct founder has not taken any other money from Newcastle during the accounting year or since its end.
