Newcastle United’s challenges around PSR have been made even clear by the news that rivals Liverpool have recorded record commercial revenues in their latest set of accounts.
The Magpies are facing a serious obstacle in their bid to consistently challenge the Premier League elite. Restricted by the profit and sustainability rules that are in force – and which will remain for next season – Newcastle’s inability to spend on their team has been well documented.
January was a case in point; with Eddie Howe’s squad desperately in need of additions, United instead were forced to allow Miguel Almiron and Lloyd Kelly to depart in the transfer window, with no replacements being brought in. It has strengthened the balance sheet and the PSR buffer, but weakened the team in the short term.
Newcastle can spend less than their competitors because they make less. It’s as simple as that. Despite having arguably the richest owners in world football, United are hamstrung until they can find a way of improving their commercial revenues – sponsorship, matchday and TV income all contributing.
Newcastle’s last recorded commercial revenue (for the 2022/23 season) was £46million. Manchester United’s was more than £300million. On Thursday, Liverpool published their financial results for the 2023/24 accounting period. It included a club record £308m in commercial revenue.
Newcastle trail that figure by an extraordinary distance, although their own 2023/24 financial results – due to be released soon – will show an improvement on that figure after a number of improved commercial deals with the likes of Adidas and Sela were sealed by Peter Silverstone and his team. The challenge remains huge, however, and underlines why Silverstone has claimed they need to have growth which is “unprecedented” in the modern Premier League if they are to achieve their aims.
“The challenge we have – or the opportunity we have – is relentless,” Newcastle chief commercial officer told the Financial Times’ Business of Football event this week.
“It doesn’t matter how much we’ve grown over the last two years, to catch some of the clubs who are way ahead of us we have to keep growing at that double digit growth rate which is unprecedented in the Premier League in this PSR era.”
Liverpool’s results are striking. Despite the record revenues, the Anfield outfit reported a pre-tax loss of £57m, revealing the financial impact of a season without Champions League football. The2023/24 accounting period reflects a period following a fifth-placed Premier League finish in 2022/23 and a subsequent season spent in the UEFA Europa League. The absence from Europe’s elite knockout club competition significantly impacted income, with media revenues falling by £38m year on year due to the lack of prize money.
However, overall revenue reached £614million, an increase of £20million compared to the previous 12 months. The completed Anfield Road redevelopment led to a rise in matchday revenue by £22million, pushing the Reds past the £100million mark for the first time, reaching £102m.
Commercial revenue was boosted by new partnerships with Orion Innovation, UPS, Google Pixel and Peloton, as well as extensions with Kodansha and Carlsberg, driving the club to a record £308m, up £36m year on year. Retail revenues also hit record levels across the club’s seven global locations.
On the field, the men’s squad welcomed four fresh faces during the 2023/24 term – Alexis MacAllister, Dominik Szoboszlai, Wataru Endo, and Ryan Gravenberch, alongside contract renewals for 11 players, including Kostas Tsimikas, Conor Bradley, and Ben Doak.
Liverpool’s chief finance officer, Jenny Beacham, commented on the financial strategy: “Operating a financially sustainable club continues to be our priority and, with the continued increase in costs, it’s essential to grow income streams year on year to maintain financial stability.
“The success of our commercial operations, together with the opening of the new Anfield Road Stand, has increased our revenues during this reporting period which demonstrates our desire to continue to compete at the highest levels of football in the men’s and women’s game.
“The global appeal of this football club continues to be phenomenal and is the underlying strength and opportunity we have for continued growth. We also take our social responsibilities seriously, using our global appeal to increase our community impact and sustainability efforts, in which we are leading the way across the football industry.”
View news Source: https://www.chroniclelive.co.uk/sport/football/football-news/newcastle-united-learn-308m-cost-31101549
