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Renton

NUFC's finances next year

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A friend directed me to this article, pinched from the nufc finances site. It doesn't make for pretty reading, but nevertheless it is essential reading. Perhaps it will stop some of the unrealistic transfer speculation we keep hearing about. Particularly interested in comments from Gemmill (as an accountant) and Rob W, who thinks we are safe on pie sales alone. :rolleyes:

 

Crystal Ball time

 

This rest of this site has set out to use only figures produced from the accounts published by Newcastle United. This is to ensure that no accusation of making up numbers can be made.

 

A number of people have contacted me to ask about the future. This has been prompted by the amounts spent on transfers in August 2005, by the club's non-appearance in European competition, and by the side's poor league position. The Daily Telegraph ran a story on 12th January concerning the NUFC financial position. This page is therefore totally based on estimates made using last season's published figures and some knowledge of changes to the club's status. Where a judgement has been made on a particular figure the best effort has been made to make the situation as rosy as possible. But again the emphasis has to be that these are estimates.

 

Gate Receipts

 

There are two fewer home League Cup games in 2005-2006. Assuming that the club again reach the FA Cup semi-final, and have a total of 3 home games in the run, there will be no difference to last season. In Europe the difference is four home ties. Using a ticket price of £20 the drop in gate receipts will be £4m across all the missing games. The drop will be higher if there are fewer FA Cup games at home this season. If there was only the Mansfield Cup game at home this season then that would be a further drop in gate receipts of £2m compared to 2004-05.

 

TV Money

 

SKY make a merit payment that relates to the finishing position of the team at the end of the season. In 2005 with the club at 14th this was down markedly from the previous year. For this exercise the assumption is that the club will again finish 14th, so no change in payment. Payments are also made for live games covered. In 2004-05 season nine games were shown live, with a further 5 on PPV. This season the number of games televised is reduced. The club state that the Uefa and FA Cup games contributed in 2004-05, which will again be reduced this season. The TV Money was £27.9m with reduced games shown this season this could be expected to drop, to say £26m.

 

Others

 

The club also make money from sponsorships, merchandising and catering. Some of these will be related to number of games played but it is difficult to measure so it will be assumed to be unchanged. The catering/conferencing operation seems to be doing well, but this may well be balanced out by lower sponsorship from having no European games.

 

Total Revenue

 

The total drop in income would seem to be roughly £6m, giving an expected income of £81m

 

Payroll

 

This is a difficult one to estimate. Off the payroll are Bellamy, Robert, Kluivert, Jenas, Butt, Hughes, O'Brien, Bernard, Ambrose and Milner. New to the payroll are Parker, Emre, Luque, Moore, Clark, Owen and Solano. Boumsong, Faye and Babayaro are also being paid for the full season rather than just half in 04/05. The respective salaries are impossible to estimate. It may be best to guess that overall nothing has changed, and the payroll will still be £47.8m. The 2004-05 payroll costs had an extra £2.4m of costs in due to compensation required by the change of management. It is not worth speculating on  whether this cost will be repeated before July 2006.

 

Transfer Fees

 

If the club payout say £16m for Owen, they then spread the cost of his transfer fee across the length of his contract. This means that Owen transfer cost is viewed as £4m per year. The listed transfer fees of the summer signings, which will be included in the 2005-06 results comes to about £20m. If all the players signed four year deals this means the club will view this as an extra cost of £5m per season. The departure of some players may reduce this, so lets say an £4m increase rather than £5m. This is shown in the club accounts under the wonderfully named "Player amortisation". In 2004-05 the figure was £11.8m, so this could be expected to rise to around £16m.

 

During 2004-05 there was a big plus for the club's finances when Jonathon Woodgate was sold for £13.4m, there is unlikely to be a similar income in 2005-06.

 

One area that is topical, but impossible to estimate, is the amount of money spent ensuring a transfer deal takes place, so for example fees to agents. The Owen, Luque and Emre deals all involved deals with foreign clubs which may have been costly to arrange. No estimate of these costs has been made.

 

Match costs

 

Six fewer games will be played so the match costs will be reduced. The match day costs are buried in the accounts and difficult to separate out. A rough estimate is that these costs will drop by £2m, to £28m

 

Total Spend

 

The changes to outgoings look to add up to an increase of £2m, (or over £4m if there is a change in management). This would make a total of £98m.

 

Dividends

 

For the first time in 6 years the dividends were paid out as shares rather cash. It is is not clear which policy will be used in the future, the decision is always down to the major shareholders whether to take cash out of the club, or more shares.

 

What does that all mean ?

 

The revenue looks to be down to £81m. The costs look to be up to £98m. The payroll will be roughly £48m.

 

The target of having wages at 50% or less of the turnover will be failed again. The figure looks likely to be over 59% with no managerial change and to over 62% if there was a change of manager.

 

The business would make a loss of £17m. This would reduce the net assets of the business to around £11m, and make the shares worth less than a penny each. If the dividend for 05/06 is paid in cash, and is the same size as the previous 5 years then the assets of the business would be around £7m. (note that in 2000 the club lost £15m and the major shareholders still demanded share dividends costing £3.8m)

 

It is likely that these sizes of losses will also drain the cash the club have in the bank, almost to zero.

 

At this point the club is close to disaster. According to the nufc.com web site Emre, Boumsong, Dyer, Owen, Faye, Milner, Parker, Luque, Ameobi, Taylor, and Babayaro all have contracts with the club that extend to at least the end of the 2008-09 season. This is fine for a side playing in the Champions League, or at least the Uefa Cup, and bringing in more money all the time, not so for a club with no money, and a dwindling income.

 

If season ticket sales look poor for next season expect that the club may have to sell of a large number of the players on long-term contracts.

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25.5m quid to satisfy Souness' ego.....and a worse position for it. These figures are pretty much what anyone could expect given the transfer outlay [and sales] by

this irresponsible fuckwit. As well as saying for months how he was going to feck up the team on the field, we said the sales and buys were unnecessary and wrong,

and it didn't take a crystal ball to see it.

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Guest Sima

The fat ginger buddha signs the cheques at the end of the day.

Edited by Sima

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Seen as Renton is so keen on getting my take on it :lol: I'll have a proper look after work, although on first glance it looks a pretty well-researched piece.

 

What it doesn't take account of is any income from that casino thing (are things going ahead there?), and any royalties we may have stood to benefit from from Goal, although I've no idea what the arrangement was there, and whether we stood to gain anything.

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Seen as Renton is so keen on getting my take on it :lol: I'll have a proper look after work, although on first glance it looks a pretty well-researched piece.

 

What it doesn't take account of is any income from that casino thing (are things going ahead there?), and any royalties we may have stood to benefit from from Goal, although I've no idea what the arrangement was there, and whether we stood to gain anything.

81561[/snapback]

 

I think the casino deal is dead, is it not? I can't imagine Goal would bring in much money if any; it was allowed here chiefly to promote the club but I can't see it doing much good considering the state we're in. There are other outgoings not mentioned too - for instance how much does it cost to put adverts for the game on prime time TV?

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Seen as Renton is so keen on getting my take on it :lol: I'll have a proper look after work, although on first glance it looks a pretty well-researched piece.

 

What it doesn't take account of is any income from that casino thing (are things going ahead there?), and any royalties we may have stood to benefit from from Goal, although I've no idea what the arrangement was there, and whether we stood to gain anything.

81561[/snapback]

 

I think the casino deal is dead, is it not? I can't imagine Goal would bring in much money if any; it was allowed here chiefly to promote the club but I can't see it doing much good considering the state we're in. There are other outgoings not mentioned too - for instance how much does it cost to put adverts for the game on prime time TV?

81563[/snapback]

 

Not very much if Frank's Factory Flooring can afford it. They're only on locally too.

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Seen as Renton is so keen on getting my take on it :lol: I'll have a proper look after work, although on first glance it looks a pretty well-researched piece.

 

What it doesn't take account of is any income from that casino thing (are things going ahead there?), and any royalties we may have stood to benefit from from Goal, although I've no idea what the arrangement was there, and whether we stood to gain anything.

81561[/snapback]

 

I think the casino deal is dead, is it not? I can't imagine Goal would bring in much money if any; it was allowed here chiefly to promote the club but I can't see it doing much good considering the state we're in. There are other outgoings not mentioned too - for instance how much does it cost to put adverts for the game on prime time TV?

81563[/snapback]

 

Not very much if Frank's Factory Flooring can afford it. They're only on locally too.

81573[/snapback]

 

Might be local but it's on prime time as I said.

 

I think it's funny how they always put a positive spin on it. There was one during the Bill for the Blackburn match, and I was wondering how the hell they could be positive given our run of results/performances. The spin was "Can United do the double.....". :mellow: I don't like it personally - very Sunderland tbh.

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I think the casino deal is dead. Especially as Newcastle as a city has at least three large casinos that I can think of off the top of my head. I think if anyone was going to get one of the new casinos it was going to be Sunderland, following hot on the heels of them actually getting a cinema and a KFC last year.

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And Shearer's bar has been open for the whole of this season, charging extortionate amounts for beer, does add anything to the kitty? And what about merchandising?

 

Sorry they are covered in others, but I would imagine that figure would have gone up to be honest

Edited by geordieshandy

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One mistake he makes is to assume sell-outs for the 4 "missing" games this year. We didn't sell those games out last season, which makes that a bit of an unrealistic figure.

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One mistake he makes is to assume sell-outs for the 4 "missing" games this year.  We didn't sell those games out last season, which makes that a bit of an unrealistic figure.

81664[/snapback]

 

That's just details though Gemmill and unlikely to make much of a difference really. I think their estimates are quite conservative in general.

 

They do so they'd like feedback if people think they are wrong mind.

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Weren't even close in the European ties - average attendance was only around 30000.

81681[/snapback]

 

Exactly. Renton, you can't say "that's just details" when it could make a nearly £2m difference to what he's claiming revenue would fall by. It's all "just details" in that case.

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They claim they're working against a predicted finishing position of 14th this season. Well, as far as I'm concerned there is a pretty good chance we'll finish lower than that, and of course, as I've said before, if we get relegated the club goes to the wall.

 

Mind you, perhaps FS will support his manager once again by stumping up yet more cash for another get out of jail card for Souness. I think he might have to, since it seems he isn't prepared to sack the wanker.

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They claim they're working against a predicted finishing position of 14th this season. Well, as far as I'm concerned there is a pretty good chance we'll finish lower than that, and of course, as I've said before, if we get relegated the club goes to the wall.

 

Mind you, perhaps FS will support his manager once again by stumping up yet more cash for another get out of jail card for Souness. I think he might have to, since it seems he isn't prepared to sack the wanker.

81761[/snapback]

 

a predicted position of 14th will be success in some eyes, which confims what some of us said about Souness lowering expectations.

 

Also, if Shepherd has to stump up much more cash to cover up fuckwits incompetence, we might be in the shite anyway

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They claim they're working against a predicted finishing position of 14th this season. Well, as far as I'm concerned there is a pretty good chance we'll finish lower than that, and of course, as I've said before, if we get relegated the club goes to the wall.

 

Mind you, perhaps FS will support his manager once again by stumping up yet more cash for another get out of jail card for Souness. I think he might have to, since it seems he isn't prepared to sack the wanker.

81761[/snapback]

 

a predicted position of 14th will be success in some eyes, which confims what some of us said about Souness lowering expectations.

 

Also, if Shepherd has to stump up much more cash to cover up fuckwits incompetence, we might be in the shite anyway

81846[/snapback]

 

Do you just make stuff up so that you can say "which confirms what I've said all along..." etc. I don't know ANYONE who would consider 14th a success, and I don't believe you do either.

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They claim they're working against a predicted finishing position of 14th this season. Well, as far as I'm concerned there is a pretty good chance we'll finish lower than that, and of course, as I've said before, if we get relegated the club goes to the wall.

 

Mind you, perhaps FS will support his manager once again by stumping up yet more cash for another get out of jail card for Souness. I think he might have to, since it seems he isn't prepared to sack the wanker.

81761[/snapback]

 

a predicted position of 14th will be success in some eyes, which confims what some of us said about Souness lowering expectations.

 

Also, if Shepherd has to stump up much more cash to cover up fuckwits incompetence, we might be in the shite anyway

81846[/snapback]

 

Do you just make stuff up so that you can say "which confirms what I've said all along..." etc. I don't know ANYONE who would consider 14th a success, and I don't believe you do either.

82183[/snapback]

 

I don't think many, if any, people will think 14th is a success. However, I think a lot of people wil now regard 8th as success, which is odd considering we were 5th when Souness took over and have spent £50M. Maybe 14th is success, don't forget Douglas Hall (who must know an awful lot about football being a director and all) said we would have been relegated under Robson.

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