Newcastle United have filed their latest set of accounts for the year ending June 30, 2023 and here are five things we learned as CEO Darren Eales sat down with reporters
Newcastle United’s revenues have risen to more than £250 million, according to the club’s most recent financial statements.
That is a 39% increase, with Newcastle’s turnover rising from £180 million to £250.3 million in the fiscal year 2022/23. The Magpies reported a loss after tax of £73.4 million for the fiscal year ending June 30, 2023.
Here are five key takeaways from the accounts and CEO Darren Eales’ Zoom call with reporters.
Newcastle are growing – but there’s work to do yet
Newcastle United had more than just a fantastic season on the pitch in 2023. This significant increase in turnover follows a similar percentage increase in 2022, and there is considerable potential for additional growth in 2024. As Darren Eales stated, “We are seeing an increasing number of commercial partners wanting to be a part of this journey.” “It’s a snowball rolling down the hill.”
However, while commercial revenues have increased by 66%, there is still a significant gap to close. In Manchester United’s most recent set of accounts, the club earned £302.9 million in commercial revenue alone. This sum is not only more than Newcastle’s total turnover, but it is nearly seven times the Magpies’ commercial revenue of £43.9 million.
According to the club’s reports, the average number of employees, including directors, was 200 in business operations in 2023. A lot of crucial hiring have been made; there were only 143 employees in company operations the previous year, but this is still a tiny quantity when compared to their competitors.
Player trading may be needed to unlock further spend
It’s there, in black and white. Newcastle’s profit from ‘disposal of players’ registrations’ was only £2.8 million in 2023/23. This sum was £3 million lower than the previous fiscal year.
It’s no surprise that ‘creating headroom’ was one of Darren Eales’ most common expressions when the club’s CEO spoke to the media about player ‘churn’ and ‘trade’. Eales even mentioned, unprompted, how West Ham sold Declan Rice; how Liverpool let Philippe Coutinho leave; and how Aston Villa let Jack Grealish to join Manchester City.
These moves enabled that respective teams to’reload’ with large payments reinvested in several positions, with the signings’ transfer fees spread out over the duration of their individual contracts. While Newcastle are not particularly interested in bids for valuable assets such as Sven Botman, Bruno Guimaraes, and Alexander Isak, the Magpies may have to do business in the long run. As he said, “If we’re going to get to where we want to get to, at times, it is necessary to trade your players.”
Hopes for the future with Adidas date confirmed
It is crucial to emphasize that these financial accounts do not encompass Newcastle’s lucrative front-of-shirt sponsorship deal with Sela, the substantial prize money obtained from participating in the Champions League, expected to generate a minimum of £37 million for the club, or the forthcoming collaboration with Adidas as the official kit partner from June 24, promising a substantial increase in revenue.
Newcastle is actively seeking a training kit sponsor, and the operational expansion of St James’ Park, referred to as St James’ Stack, is anticipated to become a seven-day-a-week operation, presenting a new avenue for revenue potentially before the conclusion of this season. Additionally, the club is currently conducting a stadium feasibility study, with the hope of enhancing matchday revenues in the future, expressing a preference to remain at St James’ Park if a comprehensive expansion proves feasible.
FFP is being taken very seriously
Newcastle’s £73.4 million deficit was consistent with the club’s previous year’s financial performance, and was mostly driven by ongoing investment in the player team. It was a submission in accordance with the Premier League’s profit and sustainability criteria, and these laws will continue to limit how much the Black and Whites can spend in 2024.
It was intriguing that Eales basically poured cold water on the potential of big business this month, when value is tougher to come by, and the CEO stated ‘we always have to be cautious of the PSR issues and making sure we are always going to be compliant long-term.’
Everton’s recent 10-point drop has ‘definitely focussed minds’. “The Everton judgment showed that there were teeth to the PSR regime,” he said.
Amanda Staveley’s loans
According to the records’ related-party transactions section, part-owner Amanda Staveley received loans totaling more than £1.25 million. On November 7, 2022, a £600,000 first loan was made ‘in respect of certain legal fees’. The loan was interest-free and remained outstanding as of June 30, 2023. Last summer, on August 31, a fresh loan of £659,056 was made.
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