Newcastle United have released their financial accounts for the 2021/22 campaign, posting a loss of £70.7m after tax. The figures unveiled on Friday represent the club's financial results between July 2021 and June 2022, which includes nine months of investment by Saudi Arabia's Public Investment Fund (PIF), PCP Capital Partners and RB Sports following their acquisition of the football club in October 2021.
An overall loss of £70.7m may be the headline figure, but behind the increase in losses and rise in wages is an encouraging picture that shows turnover up by £40m since the departure of Mike Ashley and commercial revenue also rising by £9m, with the club making great strides to improve all facets of the business.
Premier League survival was a necessity for the new ownership after the club's £300m takeover, with Newcastle languishing in 19th when Ashley handed over the keys to St James' Park. The Magpies' surge away from the relegation zone to mid-table security was helped in no small part by vital investment in the playing squad during Eddie Howe's first transfer window.
Newcastle's £70.7m loss was largely driven by that significant January 2022 transfer investment, with Kieran Trippier, Dan Burn, Bruno Guimaraes, Chris Wood and Matt Targett joining the Magpies to the tune of £100m. That relegation-beating recruitment drive saw the club's wage bill increase from £93.3m to £149.2m year-on-year.
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The January spending spree, the arrival of Howe and his backroom team and the impact of a 12-month accounting period as opposed to the 11-month period of the previous year saw the club's staff costs increase from £106.8m to £170.2m.
However, Newcastle's turnover grew by £39.8m from £140.2m, in the 11-month period of the previous year, to £180m in 2021/22. There was also an increase in both match income (£27.3m to £27.5m) and media income (£119.3m to £124.1m).
The first year of the Castore kit sponsorship, increased revenue from Premier League and Club commercial partners, and the return of matchday and non-matchday commercial activities and events also prompted commercial income to increase from £17.6m to £26.5m.
The Covid-19 pandemic wreaked havoc on the previous campaign and the return of match-going supporters in August 2021 and beyond saw the club's operating expenses jump from £14.4m to £33.7m. There were also other costs incurred such as a big leap in the amount paid to the highest-earning director at St James' Park, jumping from £260k to £1m-per-year.
An outlay of this nature is not unusual for a Premier League side, with former Manchester United chief Ed Woodward earning £2.9m during his final season at Old Trafford and Brighton currently forking out £2m-a-year to their boardroom chief.
The new ownership continue to pump money into the north east outfit, with a further £170m of transfer spend since the year end. Cash injections, which have covered transfer expenditure, have been put into the club through the creation of new shares.
Away from the pitch, PIF contributed £676,000 to meet the cost of the first team squad’s warm weather training camp in Saudi Arabia in January 2022.
Ashley's fingerprints have been all but wiped from Newcastle since his 2021 exit. St James' Park hospitality to the value of £44,000 was provided to the high street tycoon's family in the latter stages of that year but the outstanding value was paid in full in November 2021.
In terms of the new ownership, yet more investment is expected in the coming months. Howe admits he has already started looking at potential summer signings and a new front of shirt sponsor is expected in the off-season.
Newcastle continue to impress on the pitch and could realistically finish in the top four this season. Securing Champions League football would do wonders for the balance sheet, with clubs awarded roughly £14m for reaching the competition's group stage alone.
Speaking after the financial accounts were released, Newcastle CEO Darren Eales said: “This is an ambitious, long-term project. The financial success of the club goes hand in hand with our performances on the pitch. We have come a long way in the past few months. There’s still a long way to go but we are looking to the future with confidence.”
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