Newcastle United have announced club-record revenues of £320.3m.
The club’s accounts have revealed that the Magpies’ turnover has increased by 28% thanks to Champions League participation last season, a rise in player sales and sizeable commercial growth.
Here are five things we learned.
The Champions League really is ‘transformational’
The £29.8m Newcastle United received in Champions League distributions does not tell the full story. As well as helping the club attract a signing like Sandro Tonali, who was fresh from reaching the semi-finals of the competition with AC Milan, returning to Europe’s top table for the first time in more than two decades had a huge knock-on effect.
Take match day revenue, for instance. Home fixtures against PSG, AC Milan and Borussia Dortmund helped to ‘significantly increase’ match day income, which rose by nearly a third to £50.1m last year.
However, the accounts also offered a reminder of the pitfalls of missing out. After finishing in seventh last season, media income, excluding UEFA distributions, fell by £11.5m to £154m in line with Newcastle’s drop in position and that is before you even get into the Champions League prize money, match day income, etc that the black-and-whites missed out on in 2024-25, which will be evident in the next set of accounts released in a year’s time.
With an extra spot likely up for grabs, on account of English sides’ performances, getting back into the Champions League would be a game-changer for Newcastle, particularly after the competition’s switch to the even more lucrative Swiss model. Just ask football finance expert Kieran Maguire.
“Qualification for the Champions League would certainly release substantial resources, especially with UEFA now moving to a calendar year as a period of assessment,” he previously told ChronicleLive. “Liverpool have already made €100m just from the league phase. It is transformational and Newcastle will want to keep their powder dry until they have certainty one way or the other.”
Commercial income surges
It was the most-eye catching development: Newcastle’s commercial income has surged by a whopping 90% to £83.6m. For context, in the financial accounts for the year ending June 30, 2022, Newcastle brought in a mere £26.5m.
Newcastle have clearly felt the benefit of new and enhanced deals with Adidas, Sela, Noon, Fenwick and InPost, the release of a four-part Amazon documentary and changes in the operating and financial models for the club’s retail and catering activities, and there is more to come in the next set of accounts.
Subsequent deals with Red Bull, Bet365 and VT Markets have further boosted the club’s partnership income while the full results of the club taking control of their own retail operation will be apparent after years of outsourcing. Having noted how the club’s in-house retail operation and partnership with Adidas only commenced on May 24, little more than a month before the end of the financial year, the club’s strategic report stated this is ‘expected to lead to a significant increase’ in revenue, which is an added bonus of the partnership.
(Image: Chronicle Live)
But there is work to do
Newcastle have posted record-breaking revenues, but there will be no back patting at St James’ Park. It is not lost on anyone in the boardroom that Newcastle still have a lot of work to do to bridge the gap on those at the top.
Liverpool’s recently released accounts serve as a reminder of that challenge; the league leaders generated £614m in the same period, which enabled the Reds to spend £386m on wages.
Newcastle’s wage bill has risen – staff costs have increased by 18% following a surge in first-team squad costs and the arrival of around 115 new employees – but the £218.7m the Magpies splashed on salaries last season still pales in comparison to the established order. In fact, champions Manchester City spent a whopping £412.6m on wages on the way to winning the title last season.
In an era where, historically, the higher the salary bill, the more points a club picks up, Newcastle are going to have to be smart to buck the trend.
Trading is the future
There is a reason why Eddie Howe declared that ‘trading takes on huge importance’ as recently as last month. In truth, without moving players out last summer, Newcastle would have faced the doomsday scenario of a PSR breach and points deduction.
The 11th-hour sales of Elliot Anderson and Yankuba Minteh ultimately helped contribute to an increase in the profit on disposal of players and staff registrations of £69.8m, which represents a staggering £67m rise following years of poor trading. In fact, Newcastle averaged just £12m profit on disposal in the previous three-year cycle i.e. before last summer. For context, the average of the so-called top six at the time was £156m while even the other 13 clubs generated north of £60m.
Newcastle are in a better place as a result of trading – the Magpies’ loss after tax for the year was £11.1m compared to £71.8m 12 months previously – and that is without even mentioning the departures of Lloyd Kelly and Miguel Almiron last month. Newcastle, as a result, have ended each of the last two windows in profit and that has put the black-and-whites in a healthy position heading into a new three-year cycle this summer as Howe looks to finally strengthen his side.
Huge stadium and training ground decisions to come
Match day income has risen by 32%, but there is a reason why Newcastle are weighing up whether to transform St James’ Park or to build a new stadium not too far away. There are always caveats when comparing match day revenues with London clubs, of course, but Arsenal brought in more than two-and-a-half times’ more (£131.7m) in match day revenue last season.
The wait for white smoke goes on, but the accounts outlined how the survey carried out by CAA Icon received more than 18,000 responses from supporters, which is informing Newcastle’s ‘initial review’, as the club continue to ‘explore a range of options’. The account’s strategic report also confirms that work is being undertaken to determine the ‘preferred way forward’ when it comes to constructing a new training ground.
In the meantime, investment into the current stadium, training ground and STACK accounted for the majority of the £16.4m tangible fixed asset additions. The accounts reveal that £4m was set aside for improvements to certain hospitality lounges, which has helped ‘significantly enhance hospitality revenue’.
View news Source: https://www.chroniclelive.co.uk/sport/football/football-news/newcastle-united-can-unlock-substantial-31127795
