Newcastle United Limited released their financial reports for the 2009-10 fiscal year Wednesday, and the big story is that they posted a net loss of £17.1 million. The loss does not come as a surprise, as the fiscal year covers Newcastle's season in the Championship and does not include increased television money from promotion to the Premier League or money from the sale of Andy Carroll, as previously speculated here.
To say that the impact of relegation following the 2008-09 season on the finances would be an understatement. TV & media revenue fell 57% while season ticket sales and gate receipts dropped 29% and 18%, respectively. (Most of these figures come courtesy of F.C. Business) The total income fell 39% to a meager £52.4 million, which necessitated a 24% drop in operating expenses.
The other day it was reported that the management had slashed an impressive £21 million of their wages from year to year, and the actual number was even larger, at £23.6 million. Add in other cost-cutting measures, like this report from Lee Ryder of the Chronicle that a full £10,000 was saved merely by shutting off an escalator, and even though a significant net loss was reported, the management of the relegation crisis seems almost...responsible.
Follow the jump for some praise of Mike Ashley (!) and a poll
There is, of course, the issue of Mike Ashley loaning money to the club. He poured another £42 million into the club, interest free, bringing the total amount of money loaned by Ashley to Newcastle to £139.8 million. (ESPN Soccernet) Mike Ashley is not - nor will he ever be - a man that inspires my confidence when it comes to making football decisions, but you've got to give him this: he puts his money where his mouth is. It'll be a while before you hear me singing, "Get out of our club."
Compare Newcastle's financial situation to that of West Ham United (loss of £21 million), Sunderland (loss of £27 million), and the Bolton Wanderers (loss of £35 million), and things actually look pretty rosy going forward, assuming that Alan Pardew can prevent the unthinkable and assure survival for next season. (Thanks to Luke Edwards of The Journal for the info on the other clubs; the entire article is well worth your time.) I wrote earlier this week that this club is set up favorably to comply with the new financial regulations coming down the pipe, and while the club is going to have to stop relying on Ashley to bail them out, I'm even more encouraged by this report. Next year's report will have significantly more income built in, and it seems that the return to frugal ways has actually become the norm. Who knows? Maybe we'll even see a report of profit at this time in 2012.