NUFC Club Accounts 2023-24

Andy Trobe is on hand, as always, to explain the key points from the club's recently published accounts

Newcastle have won a major domestic trophy for the first time in 70 years. That’s got absolutely nothing to do with this article but I thought I’d just mention it.

This article is about the NUFC accounts which were recently released for the season 23/24. A brief reminder. This was the season that we played in the Champions League for the first time in 20 years and despite a crippling injury list, managed to finish 7th in the Premier League.

Bottom line was an £11m financial loss which was a significant improvement on the previous year’s loss of £72m. But let’s get under the headline numbers. What do the accounts tell us about the past, present and future for the club?

Here are my top 8 takes.

1. Based on squad cost, Eddie Howe is over-achieving

The media narrative (and that of some of our more excitable supporters) is that NUFC should be winning trophies as they’ve spent fortunes. The reality is slightly different.

There’s no doubt that NUFC have spent heavily since the takeover. But in terms of squad costs, they’re still miles behind other PL clubs. I’ve taken the “squad cost” as the annual wage bill + amortisation costs. Amortisation costs are essentially transfer fees divided by the length of players’ contracts.

Newcastle, in fact, only have the 8th highest squad cost in the Premier League. And did I mention that they’d just won a major domestic trophy? Not exactly Leicester in 2016 admittedly but still impressive all the same. Eddie Howe is over-achieving given the resources at his disposal.

2. Newcastle’s revenue is behind the Big Six... but that gap is closing

Newcastle’s revenue has leapt by £70m to £320m, a new record income for the club. That’s the 7th highest in the PL. However, they are still £149m behind the 6th placed club.

That’s a significant gap but that gap has reduced by £40m since the takeover. For Newcastle to continue to compete, it is essential that we continue to close it. Unfortunately, our failure to qualify for Europe will have a significant negative impact on our 24/25 figures.

3. PSR is a pain in the arse

Newcastle had to sell Anderson and Minteh in June 2024 to comply with the Premier League’s profitability and sustainability rules (PSR).

And they only JUST complied. After sales on players, the Swiss Ramble calculates that NUFC were only £1m below their allowable three-year rolling loss. You can see why there was panic at the club last June!

4. There should be a decent transfer pot in the summer

The summer transfer pot will, again, be dictated by PSR. The good news is that there should be a decent pot of money available. This is helped by the sales of Almirón in January and Kelly (when the purchase obligation is triggered) as well as the new shirt deal with Adidas.

The Swiss Ramble has calculated that NUFC could make an (allowable) loss of £80m in 24/25 and I calculate a £74m loss in 25/26 whilst still complying with PSR. That gives a lot of wiggle room in the summer for improving the squad.

5. Champions League football is definitely worth achieving

Newcastle returned to Champions League football for the first time in 20 years. This earned us an extra €34m (£30m) in revenue despite getting knocked out in the group stages. Not bad but only a fraction of what our rivals generated.

With Aston Villa qualifying for the Champions League and progressing to the latter rounds, it’s likely they will surpass our income in 24/25. That means we’ll probably drop to the 8th highest revenue in the PL.

If we are going to compete regularly with the “Big Six”, we need to qualify for the Champions League, progress beyond the Group Stage and improve our European co-efficient.

6. Newcastle’s future is intrinsically linked to their commercial revenue

I can’t emphasize enough how crucial it is for NUFC to grow their commercial revenue over the coming years. In fact, without going over the top, I’d suggest it’s one of, if not THE, most important key to our future success.

The gap between NUFC’s commercial income and the rest of the Big Six is huge. Until we close it, we’ll continue to struggle to compete. The PL is determined to prevent NUFC from doing so. Every regulation that they have introduced since our takeover has the sole purpose of stopping NUFC close this gap in commercial revenue.

The 23/24 season saw the introduction of a new shirt sponsor (SELA) worth a reported £25m per season. From the 24/25 season, Adidas has returned as kit supplier in a deal reported to be worth £40m a season. These are massive increases on the disastrous Ashley era. But they are still some way behind the Big Six.

The next couple of years will be crucial. If Man City win their Tribunal case against the PL (on Fair Value and Associated Party Transactions), expect NUFC to sign some eye-watering commercial deals.

7. A new stadium could double match day revenues…

…according to chief operating office Brad Miller.

As with Commercial and Broadcasting revenue, NUFC lag behind the Big Six in terms of match day income. The opportunities here, I’d suggest, are slightly lower than the potential wins offered up for Commercial and Broadcasting revenue. A new stadium would cost over a £1b. The increased revenue that investment would generate is relatively low.

With PSR, any increase in income is welcome. The decision to be taken here is whether that increase in income is sufficient to cough up over a billion quid to up sticks to a new stadium. I have my doubts but we await the club’s decision with interest.

8. PIF are fully committed to funding the club

PIF have injected £303m of capital up to the end of the 23/24 accounting period (with another £48.5m since these accounts closed) making £351.5m in total. After paying £305m to purchase the club, that means that a total of £656.5m has been spent.

However, the club was recently valued by financial analysts at Bloomberg at north of £1b. This suggests that PIF have got a bargain with NUFC. If only Mike Ashley had had such foresight.

This sort of owner funding is not unique. In fact, PIF’s funding has been dwarfed by other PL owners. In fact, there are 7 other PL owners that have invested more than PIF (as at the end of the 22/23 season).

Summary

Did I mention that NUFC have just won a domestic trophy? Their first in 70 years?!! Newcastle’s future on and off the pitch is rosy.

Andy Trobe

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With thanks to Swiss Ramble for the charts