Newcastle United’s calm before the storm

AFTER AROUND a dozen games of the 2021-22 season, Newcastle were being written off as relegation certainties. In their first 11 fixtures, they drew five and lost six. They were scrambling around at the bottom of the Premier League, the fans hated the club’s owner and they were urging on the controversial sale to a group of investors led by the Saudi Arabian sovereign wealth fund.

It was widely believed Newcastle, while a big club in the eyes of their fans and many others, had fallen too far behind the competition. The Geordies get tired of hearing about their lack of success and the fact their glory days are now a very deep sepia, and they’ve had plenty of false dawns since 1969 when they last won silverware.

Their 2020-21 finances revealed their total turnover was £ 140 million, a fraction of the Premier’s top clubs and 8% down on the 2019-20 season. Newcastle under owner Mike Ashley were run prudently and invariably made a profit – over the past 10 years, only four clubs (Tottenham, Manchester United, Liverpool and Burnley) have made a higher consolidated profit than Newcastle’s £ 48 million.

Despite this achievement, a lack of continued investment and, it would seem, a big shortage of ambition, created a stagnant club with disillusioned supporters.

Inevitably, Newcastle are being linked with dozens of players as the 2022 season ends.

In 2020-21, Newcastle made a loss for the second consecutive season, although their pre-tax deficit of £ 13.6 million was modest compared to some of their Premier bedfellows. For a club that can pull in crowds of 50,000-plus, Newcastle’s income is definitely on the side of underachievement and is only a quarter of Manchester City’s and less than half of Tottenham Hotspur’s £ 360 million. The potential is very significant, but will surely require a complete overhaul of the club’s commercial strategy as  the new era gathers momentum.

Newcastle’s commercial revenues fell by 29% in 2020-21 to £ 21 million, underlining one of the key areas where the club is punching well below its weight. Matchday income was almost wiped out, but broadcasting rose by 12% to £ 119 million. When Ashley took over the club, their income was among the top half dozen in the league, but since then they are well below halfway. Clearly Newcastle’s decline has been on and off the pitch.

Newcastle’s wage bill for the season was £ 106.8 million, representing 76% of income. The ratio actually fell in 2020-21, but two seasons ago, it was 55%, despite a rise of only £ 10 million in actual wages. In that time, the club’s turnover has gone from £ 176 million to £ 140 million. Covid-19 has cost the club some £ 40 million, a figure that is actually less damaging than some Premier clubs, notably Everton, who believe the pandemic has had a negative effect of some £ 170 million.

The club shaved £ 25 million off operating expenses, which limited the overall loss for the season, but was also helped by taking advantage of the UK government’s furlough scheme during the pandemic. Ashley used the programme in both covid-affected seasons. However, when the new owners took over, they were shocked at the low level of wages among non-playing staff, and have since raised salaries.

Since buying the club, the new owners have pumped in £ 167.9 million and Mike Ashley has been paid back his £ 107 million loan to Newcastle United. As at the end of 2020-21, their net debt was £ 94.5 million, which was £ 50 million higher than 2019-20.

The January 2022 transfer window saw the club spend heavily to avoid relegation. In November 2021, Steve Bruce was sacked and Eddie Howe installed as manager. The January transfer window saw the club spend heavily to avoid relegation with short-to-medium term signings such as Chris Wood (Burnley £ 25 million), Kieran Trippier (Atlético Madrid £ 12 million), Dan Burn (Brighton £ 13 million) and Bruno Guimarães (Lyon £ 33 million). Howe’s record was enough to keep Newcastle in the Premier, 13 wins and five draws from 27 games taking them to 11th place.

There is expectation the club will spend big in the summer of 2022, although they will have to be wary of Financial Fair Play issues. Inevitably, they are being linked with dozens of players, including the sought-after 22 year-old Uruguayan Darwin Núñez of Benfica and Lyon’s Brazilian striker Lucas Paquetá.

In theory, Newcastle United became the richest club in the world after being bought by Saudi Arabia’s Public Investment Fund, so some fans will expect an instant transformation. At the same time, the debate about human rights and the regime in Saudi Arabia will refuse to go away, so they will have to endure ongoing criticism and plenty of questioning.

The owners have a target of title contention within five years, a sensible aspiration because the football world has changed since Chelsea and Manchester City were bought by Roman Abramovich and Abu Dhabi respectively. It is that much harder to play “fantasy football” and sign everything that moves in today’s environment. Nevertheless, that won’t stop St. James’ Park being the centre of attention in the summer of 2022.

Newcastle United’s 2019-20 finances – worth the wait?

ON THE face of it, Newcastle’s financials for 2019-20 could have been far worse, but they did highlight the lack of commercial progress made by the club over the past decade or so. With a decent level of cash in the bank, reduced net debt and a pre-tax loss of £ 26 million, there’s little high drama in the figures, but over the long-term, the club’s inability to push on and compete must be frustrating for all followers of “the Toon”.

Mike Ashley, the owner, is still keen to sell the club, but the lack of a credible buyer means the unpopular billionaire is still in control. Although £ 26 million could have been higher – compared to the huge losses of Manchester City, Everton and Aston Villa – it has to be remembered that in 2018-19, Newcastle United made a profit of £ 41 million, so there’s been a £ 67 million negative swing. Over the past 10 years, the club’s aggregate pre-tax profit was £ 94 million, a figure bettered by only three clubs. They have made a profit in eight of the past 10 years, hence the club’s comment: “The [2019-20] results do not represent a normal year for the company.”

The club’s revenues were down by 13% from £ 176 million to £ 152.6 million, no surprise given the cost of the pandemic. Newcastle estimated covid-19 cost them over £ 14 million.

Matchday income was down 30% to £ 17.4 million, while broadcasting, which accounts for 70% of overall earnings, was 14% lower at £ 106.1 million. Commercial income, which has failed to keep pace with the club’s rivals, was 1% down to £ 25.9 million. An example of their lack-lustre performance in building a formidable commercial presence is the club’s shirt sponsorship in 2019-20, which was only 10% of Manchester United’s deal and one sixth of Manchester City’s. There could be more energy around commercial business in the form of the club’s new partnership with Castore, who will operate the club’s retail operations.

Against this background, Newcastle’s wage bill totalled £ 121.1 million, representing an increase of 25% on 2018-19. This put the wage-to-income ratio up by 25 percentage points to 79.4%, which was considerably higher than the average for the Premier League (69.3%). 

Newcastle’s wages have doubled over a 13-year period, but this pales into insignificance compared to Liverpool (+320%), Tottenham (+314%) and Manchester City (+866%). Furthermore, Newcastle’s net spend in the transfer market was among the lowest in the Premier (£150 million). Their squad for 2019-20 cost around £ 216 million, again at the bottom end of the division.

More positively, Newcastle’s net debt for 2019-20 totalled £ 45 million, which was a big drop on 2018-19’s £ 98 million and 2018’s £ 111 million. In addition, the club’s total cash was up to £ 62.7 million, a substantial increase on 2018-19 (£ 14 million). 

Mike Ashley is still hoping to sell the club to the Saudi Arabian sovereign wealth fund, a deal that caused a lot of controversy when announced. He is waiting for an arbitration hearing with the Premier League, but this won’t take place until early-2022. Given the potential of the club and its strong regional identity, there should be no shortage of takers for Newcastle United.

Despite the obvious lack of verve in Newcastle’s financials, they are still among the top 30 clubs in Europe, indeed, they are just outside the top 20 by revenues. But they are over-reliant on broadcasting income and their commercial revenues are really disappointing for a club that can call on 50,000-plus supporters in normal times. While Newcastle is not in a precarious position, it has been left behind by the top Premier clubs and in their current state, it is difficult to see the long wait for genuine success – it is now over a half a century since their last trophy. New ownership may provide the fresh impetus that is sorely required, but in the meantime, better communication and accessibility could change the dynamic between the owner and the Newcastle public.

Newcastle failed takeover poses questions around suitability

NEWCASTLE UNITED’s takeover by a consortium including the Saudi Arabian sovereign wealth fund, Middle East expert Amanda Staveley and the Reuben brothers may have collapsed, but the club remains up for sale and there is a chance the transaction could be rekindled.

If that is the case, the controversy over Saudi Arabia, with its suspect human rights record, will rear its head again, dividing public opinion and questioning the ethics of the football industry.

Newcastle fans are desperate to get rid of owner Mike Ashley, but they have to consider the moral questions. On the other hand, should it matter given so many aspects of business life are inter-woven with middle eastern issues?


It does matter. As we have seen in recent years, football has attempted to become an outlet for causes and campaigns, pushing itself to the forefront of virtue signalling. Given the position the game has acquired, being the first port of call for any cause or opportunity for conspicuous grieving or appreciation, how can Saudi Arabia’s human rights abuses be ignored? You are either the moral compass of the people or merely campaigners of convenience.

Naturally, Newcastle fans were excited about the possibility of the club realising some of its potential, backed by Saudi money, but how many people were prepared to sell their soul in the process?

We have seen, since Roman Abramovich bought Chelsea in 2003, resentment of clubs who receive inflated investment from the rich and influential. Clubs like Chelsea, Manchester City and Paris Saint-Germain are hated because of their financial advantages. But is it not true that almost every envious fan would secretly like their club to be patronised in the same way? And when a rich oil sheik, oligarch or Asian businessman drives into town, some people become apologists and grab the opportunity – sometimes blaming Chelsea, City or PSG for creating the situation in the first place. We don’t like this game, but we will play it all the same.

Fans invariably want an owner, in crude terms, who pours money in and keeps out of view, allowing the club to win prizes and become a big-hitter. Some owners, such as Roman Abramovich, do not expect or ask for a return. Abramovich is relatively low profile these days, but he still backs Chelsea in order to maintain competitiveness. He has a past and he’s from Russia, which also has a questionable human rights record. If Abramovich was taking over Chelsea today, he may find the environment a little more stringent than it was in 2003.

Nevertheless, Abramovich is seen as a good owner by Chelsea’s fans – it is surprising what 16 major trophies can do! – even if the plethora of coaches that have gone through the Stamford Bridge revolving door might disagree. Manchester City’s followers will no doubt say their owners are more than decent benefactors after a total of 11 major honours since 2011.

Other clubs are unhappy with their owners, namely Manchester United and Arsenal, two clubs that dominated the era before Abramovich and have struggled to live up to their name since they lost two iconic and powerful managers, Sir Alex Ferguson and Arsene Wenger respectively.

Equally important in the relative decline of these two clubs has been the type of ownership that has controlled their destiny in recent years. Both have US owners and to a large degree, they adopt a business approach that expects to have something to show for their investment. Neither the Glazers at United and Kroenke’s Arsenal are popular with the support base, but a few trophies here and there would change the perception of the club’s owners. Both have picked up silverware, but what is crucial in this debate is that Arsenal and United have lost their position of leadership they enjoyed in the period before Chelsea and City became contenders.

The interest in English football is growing and 17% of the 92 clubs have some form of US ownership. They largely want their businesses to be run properly, low risk and capable of providing a return. This approach is reflected in US Major League Soccer, where clubs are mostly well run and play in good stadiums. It is worth noting that America’s principal sports run on a “closed league” basis, which means relegation is not a concern for owners.

At the highest level, football is no longer “owned” by local business people who love the club they supported as a youngster. Financially, such owners could not possibly compete with the oligarchs and Asian retail tycoons that proliferate the global game today. Therefore, it is a case of biting the bullet in order to compete. But where do you get the sort of money needed to play among the uber-wealthy?


Football has shown many times it can bite-off the hand of any would-be investor, often regretting it later. The current climate has forced many clubs to mislay their traditional values in order to be successful. Some have courted protagonists from the alternative investment world such as private equity and hedge funds, very few of which would have a long-term view on club ownership. Leveraged buyouts, which can land the club with substantial debt on their balance sheet, have been used to make acquisitions, such as the Glazers with Manchester United. Football has certainly moved into the financial world and is seen as a market of opportunity, even though it is an industry that conforms to very few conventional business practices and has added burdens in the form of emotion and expectation.

Where does this leave Newcastle United? Mike Ashley has wanted to sell the club for some time – Amanda Staveley, through her company PCP Capital Partners, tried before to strike a deal – but despite plenty of talk about possible buyers, it just hasn’t happened. Presumably, the intention is to transform the club into a trophy-winning, all-star team that can compete at home and in Europe. It needs to happen soon, because the club could be in danger of losing its cachet – it has been, after all, 51 years since they won anything other than promotion.

That needs serious money and there’s only so many places where that can be found. The Champions League final this year could well be Manchester City versus Paris Saint-Germain, Abu Dhabi versus Qatar. They have the money, but they got in there first. Newcastle’s timing has not been good, hence the microscope has been firmly focused on them as people have questioned the way football is heading. Saudi Arabia may not be the ideal owner of a club, but can the Premier League honestly say, hand-on-heart that its portfolio of owners is clean? Whatever happens, the people of Newcastle deserve greater clarity over the future of their club.