NUFC specific FFP/PSR discussion

[WilliamPS]

Th income numbers and staffing show the club is now ran as a serious enterprise. A long way to go, but clearly moving in the right direction 

[mouldy_uk]

Just think how much more money coins we’d have if we fired the catering staff and stewards

 

[The College Dropout]

1 hour ago, r0cafella said:

Now imagine what squad cost does to us. I hope that's never adopted. 

I believe "squad cost" in the FFP/PSR sense = yearly wages (players and staff only) + amortisation. That's the yearly accounting cost of the squad.

 

The actual squad cost is always going to be super high.

[Kaizero]

Posted this in the "General NUFC stuff" thread earlier, then realized it probably fit better in this thread than that one so reposting it  

 

Extraction of key information, structure format and chosen highlights are all courtesy of ChatGPT:

 

 

Newcastle United Financial Summary – (Year Ending June 30, 2024)

 

Key Financial Highlights

- Turnover: £320.3m (+£70m / +28% from £250.3m in 2023).
- Operating profit before amortisation & impairment: £28.8m (+£7.2m from £21.6m in 2023).
- Operating profit/loss: £1.2m profit (vs. £64.9m loss in 2023, a £66.1m improvement).
- Loss after tax: £11.1m (significantly reduced from £71.8m loss in 2023, +£60.7m improvement).
- Staff costs to turnover ratio: 68.3% (down from 74.0% in 2023).
- Cash at year-end: £15.4m (up from £13.4m in 2023).
- Average home league attendance: 52,115 (similar to 52,205 in 2023).
- League position: 7th (down from 4th in 2023).

 

Largest Increases & Decreases in Revenue

Revenue Increases:
1. Commercial Income: £83.6m, up £39.7m / 90% (from £43.9m in 2023).
  - Growth due to new sponsorship deals (Sela, Noon, Fenwick, InPost, Adidas).
  - Boost from Amazon Prime documentary "We Are Newcastle United".
  - New in-house retail and catering operations contributed further revenue.

2. Matchday Income: £50.1m, up £12.2m / 32% (from £37.9m in 2023).
  - Boosted by three home UEFA Champions League (UCL) matches.
  - Increase in domestic cup games.

3. UEFA Champions League Revenue: £29.8m (compared to £0 in 2023).
  - Direct result of UCL participation.

Revenue Decreases:
1. Media Income (Excluding UEFA): £154m, down £11.5m / 7% (from £165.5m).
  - Due to dropping from 4th to 7th place in the Premier League.
  - Fewer live TV appearances (24 vs. 26 in 2023).

 

Major Cost Changes

- Operating Expenses: £291.5m, up £62.9m / 28% (from £228.6m in 2023).
- Staff Costs: £218.7m, up £33.6m / 18% (from £185.1m).
  - Increased due to first-team squad costs and 115 new employees.
- Other Operating Expenses: £67.8m, up £27.7m / 69%.
  - Linked to increased commercial activities and stadium operations.
- Player Amortisation & Impairment: £97.5m, up £8.2m (from £89.3m).
  - Reflects new player signings (Barnes, Tonali, Livramento, Hall).
- Profit on Player Sales: £69.8m, up massively from £2.8m in 2023.
  - Key sales: Elliot Anderson, Yankuba Minteh, Allan Saint-Maximin.

 

Strategic Investments & Developments

- Training & Stadium Infrastructure:
  - £16.4m invested in stadium improvements, training ground, and new fan park (St James’ STACK).
  - Further enhancements planned for St. James' Park expansion or a new stadium.

- Retail & Sponsorship:
  - Adidas partnership launched in May 2024, with expected significant revenue increases.
  - STACK fan zone opened in August 2024, already boosting food & beverage sales.

- Women’s Team Growth:
  - Turned fully professional in 2023.
  - Achieved second consecutive promotion, now in the FA Women’s Championship.

 

Other Notable Changes

- Board & Leadership Changes:
  - Dan Ashworth left for Manchester United, Paul Mitchell replaced him as Sporting Director.
  - Amanda Staveley stepped down and sold her shares.
  - Brad Miller appointed as COO.

- Cash Flow & Debt Management:
  - Net cash inflow of £2.0m (2023: £8.4m).
  - Equity funding of £97m received (2023: £127.4m).
  - Loans of £50m in place with HSBC & Deutsche Bank.

- Risk Factors:
  - Premier League performance crucial for revenue sustainability.
  - Player recruitment & retention risks.
  - Compliance with Profit & Sustainability Rules (PSR) under close monitoring.

 

Summary & Outlook

Newcastle United made substantial financial improvements in 2024, reducing losses and significantly increasing revenue, mainly driven by UCL participation, commercial growth, and new partnerships. The club continues investing heavily in infrastructure, aiming for long-term financial sustainability and competitiveness.

[timeEd32]

11 minutes ago, The College Dropout said:

I believe "squad cost" in the FFP/PSR sense = yearly wages (players and staff only) + amortisation. That's the yearly accounting cost of the squad.

 

The actual squad cost is always going to be super high.

 

Yeah, some quick math says we'd be at around 76% with these numbers. If we qualify for Europe we need to be below 70%, though anything less than 80% we'd in the first-time offender small fine territory so we'd have options.

[t00nt00n313]

Hopefully we have enough headroom this summer to splash on a RW, GK, and CB.

 

Ideally I'd have also liked to strengthen LB so we aren't overly reliant on hall staying fit, replaced trippier with someone younger at RB, and replace Wilson with a more reliable second choice striker but we won't definitely won't have the money for those things.

[toontownman]

I thought Eales wasn't at the club anymore and on leave? Is he still working hence the quotes just released on everything? Or has he returned and I missed it?

[JT24]

2 minutes ago, toontownman said:

I thought Eales wasn't at the club anymore and on leave? Is he still working hence the quotes just released on everything? Or has he returned and I missed it?

He is still working a notice period. The ownership are in the process of hiring a new CEO and he’ll be working until they do. 

[mouldy_uk]

Does that mean we are spreadsheet champions again

 

[andycap]

Surely a new striker will be needed aswell. Unless they keep Wilson. 

[gjohnson]

A striker has to be priority...Wilsons a dead horse and EH doesn't seem to have faith in WO. A little niggle on Isak and we're screwed.

[FloydianMag]

 

[Steve Charlton]

Isak’s future, Newcastle’s transfer plans and more – an audience with Darren Eales, analysed

 

 

 

Newcastle United supporters have been seeking answers about the general direction of their club following three successive windows without strengthening the first XI — and now a member of the hierarchy has spoken.

Darren Eales, the outgoing chief executive (CEO), held a video call with the media to coincide with the release of the club’s accounts for 2023-24.

For the first time in the post-takeover era, Newcastle made a pre-tax profit (£1.2million, $1.5m), though that was primarily fuelled by the combined £65m sales of Yankuba Minteh and Elliot Anderson, as the club rushed to satisfy the Premier League’s profit and sustainability rules (PSR) last June. But a 28 per cent year-on-year increase in revenue, driven by a 90 per cent uptick in commercial income, represents what Eales describes as “unprecedented growth in football”.

Beyond the accounts, among the key topics Eales discussed were:

How it would be “crazy” for Newcastle to consider selling their best players

The club’s intention to offer Alexander Isak a new contract in the summer

His view that Newcastle are “in a good place” heading into the next transfer window and are “excited” about the business they can conduct

Why Saudi Arabia’s Public Investment Fund (PIF), Newcastle’s majority owners, are “absolutely” committed for the long term

His expectation that “huge investment” will be forthcoming from PIF either for a new-build stadium or a renovation of St James’ Park, and a decision will come “in the near future”

The ownership “know” they have to build a new training ground “to get where we want to get to”

Eales is “doing well” health-wise and continues to serve his notice, with the search for a new CEO ongoing

Newcastle are “delighted” Eddie Howe is their head coach and “hope” he is going to stay “for a very long time”

This is what Eales said — and The Athletic’sanalysis of what he meant — about the key issues facing Newcastle…

Isak and selling their best players

There was a marked change in tone from last January, when Newcastle’s previous financial results were announced and Eales answered “yes” when asked if every player had a price under the PSR system. Internally, senior figures fretted that, as things stood, they were facing a breach and a possible 10-point deduction.

Fourteen months on and with their resources further bolstered by the recent departures of Miguel Almiron and Lloyd Kelly, Eales was far more bullish about Newcastle’s leading players. Most notably, this means Isak, who has already scored 22 goals in all competitions this season and has developed into a coveted, world-class centre-forward.

A new contract will be discussed soon with the Sweden international. “To be clear, he’s got multi-years left,” Eales said. “We’ll have the discussions in terms of a new deal, just like we did with Joelinton, Bruno (Guimaraes) and Anthony Gordon. That’s something we’ll approach in the summer.”

Newcastle now believe they are in a position of strength with Isak, 25, who still has three full seasons remaining on the six-year contract he signed when he left Real Sociedad in 2022 for a fee of £60m.

“Because we were able to move a couple of players in January that weren’t really impacting on minutes on the pitch (it means) we’ve got that wish and desire to keep our key players,” Eales said. “They’re all under long-term contracts. We have no intention at all of those players being moved on. We’re not under the gun or anything like that.”

He added: “As you know, we’ve got an ownership that is ambitious and wants the best for the club. So from that perspective, it would be crazy for us to consider it.”

Isak has consistently been linked with other clubs, including Arsenal, Liverpool, Barcelona and Paris Saint-Germain. “We have that ambition to be a top club, so there is a sense of annoyance because we’re almost seen as that next category down, so it’s free game to talk about our players.”

What if those players express a desire to leave? “The reality is all of our players are under long-term deals,” he repeated. “They’re committed to the club. We’re not looking to move any player on.”

PSR and whether Newcastle can spend this summer

“Just about compliant” felt like an understated way of outlining Newcastle’s financial position come the end of the 2023-24 season.

Newcastle’s “frontloaded” post-takeover spending still limited the business they could conduct from that moment onwards. For three successive windows, the starting XI has not been strengthened.

“You have to pay the piper (eventually),” Eales said, when explaining Newcastle’s drop-off in business. If Newcastle were permitted to invest more, then they would have done just that. “The ownership has committed to spending to the maximum amount that we can within the rules,” Eales reiterated.

Mercifully, heading into what is a critical summer when significant squad surgery is expected (and in many ways feels necessary), Eales insists that Newcastle are on a stronger financial footing. PSR considerations will continue to influence the club’s dealings — interestingly, should Newcastle qualify for Europe, UEFA’s financial regulations are not believed to be as problematic for the club as the Premier League’s rules are — but they are in a far healthier position to bring in quality additions.

“The amount (available to spend) is going to depend on a lot of factors up until then,” Eales said, citing potential European qualification, and the specific UEFA competition Newcastle end up competing in, as one variable. “But it is a new (three-year PSR) cycle, so that’s good news for us.”

Howe wants a right-sided centre-back, a right-winger and a versatile forward as a minimum, while recruits may also be sought in other positions, including goalkeeper, full-back, midfield and striker. And Eales believes Newcastle can finally benefit from the recruitment expertise of Paul Mitchell, the sporting director, who has felt hamstrung by PSR during his first two windows.

Paul Mitchell, left, could have a busy summer transfer window ahead (Serena Taylor/Getty Images)

“Ultimately, it’s about getting the players that Eddie wants in his positions,” Eales said. “There’s real alignment in that respect. So we’re excited about the summer ahead.”

PIF’s ambition

“We’re an ambitious ownership group that is looking to drive Newcastle to be sustainable, to compete for trophies and, ultimately, we want to be winning the Premier League,” Eales said.

 

This was nothing new. When Newcastle’s takeover was ratified in October 2021, Amanda Staveley, then a minority shareholder, spoke about competing for all the major honours within five to 10 years.

On the pitch, much has happened since then. Off it, Newcastle’s accounts reveal a sharp and sustained uptick, yet in terms of big infrastructure projects, the pace has felt more sluggish. There have also been reports that PIF is re-focussing time and money on internal Saudi investments, raising concerns about the club’s future.

Eales batted those suggestions away. “We’ve got an ownership that’s fully committed to the long term, so the future is bright,” he said.

On this subject, he referenced PIF’s engagement on the stadium issue and the aim of building a new training facility. “Let’s take a step back,” he said. “Whichever path we go down, that (will be) huge investment so the fact that the ownership are taking that very seriously and looking to invest considerable sums shows their ambition.”

Eales returned to the theme of being hamstrung by PSR. “I have a different insight because I’m dealing with ownership day to day, but they are 100 per cent committed to Newcastle United,” he said. “That’s the exciting part; there’s no change in terms of where we want to get to.

“The one thing we would say is that we have to do it within the regulatory regime that’s there and the frustration which we’ve spoken about before is we have that PSR constraint. Because if it wasn’t for that, we could spend more on the team and accelerate our progress on the pitch.”

Stadium plans

“We appreciate the patience on this matter…”

And with that, it was clear that this was going to represent merely the latest in a series of remarks which have pretty much represented non-updates on the stadium.

That is not a criticism of Eales, more just a reflection of the position the club is in regarding the future of St James’ Park: they are simply not yet ready to announce their plans. Despite the CEO stating last year that a call was “imminent”, before an announcement in October that a “decision stage” was forthcoming in “early 2025”, Newcastle cannot confirm what is happening yet.

“It’s a once-in-a-generation decision,” Eales said. “We want to make sure we’ve got everything right. We don’t want to rush and just do something and then think in 20 years’ time, ‘If we’d just spent a little bit more time…’.”

Essentially, the club have narrowed it down to a straight choice between renovating and expanding St James’, or building a so-called “super stadium” on a site close by, which is believed to encroach on to Leazes Park. The latter is thought to be the preference of several key figures inside the club and presentations were made to PIF and Yasir Al-Rumayyan, Newcastle’s chairman, during a meeting at Matfen Hall in Northumberland earlier this month.

Without confirming that Newcastle are edging towards a new-build stadium over a renovated St James’, Eales also did not deny that was the case. He even stressed that a new stadium would not only allow Newcastle to get “more fans in”, but also “help us make tickets affordable to more of the people”. His rationale was that, because Newcastle could provide a higher-end corporate offering, which would raise greater revenue, they could have cheaper ticket prices elsewhere.

“We want to make sure we take everybody on the journey,” Eales said. “So it’s about narrowing which of those is the best option in the long term for the club. But also bearing in mind how important Newcastle United is to the city and the region. So this is something that, if we can get it right, we feel can be something that benefits not only the club, but the wider region.”

His stated desire to ensure all stakeholders are “aligned” also implied that a controversial move away from St James’ is becoming the most likely option.

“We’re looking to try and get something done in the near future,” was as close as Eales got to providing any sort of deadline for an announcement. But, given the Fan Advisory Board (FAB) must be consulted before a decision is reached, confirmation of stadium plans certainly does not appear “imminent”.

A new training ground

If there had been any equivocation over whether Newcastle would eventually build a state-of–the-art training ground, Eales shut it down.

“We know we have to do that,” Eales said, when asked about the timescale for a new venue. “To get to where ownership wants to get to, we need to have a new training ground.”

This statement will reassure supporters — and even some inside the club — who have questioned whether Newcastle were ever going to commit to such an infrastructure investment. There have been several significant upgrades to Benton, costing in excess of £20m, yet Eales has confirmed that is to provide the best facilities possible in the short term, before a move to an elite facility in the “medium term”.

The exact timeframe for construction is unclear, though he suggested that a specific site has still yet to be selected. “We’re at the early stages and have to look at all viable possibilities,” Eales said. “If we could, we’d want to stay in the city.”

However, Eales insists Newcastle are “excited” about the prospect of building a new training ground and that, once they have secured a location, they will move “with full speed”.

That still means that a new training ground is still a matter of years away, but at least the message is that it will definitely be constructed.

Howe’s position

Eddie Howe has led Newcastle to two cup finals in three seasons (Serena Taylor/Newcastle United via Getty Images)

Eales was gushing in his praise for Newcastle’s “wonderful” and “amazing manager” and the “remarkable” job he has done in lifting the club from the relegation positions into the Champions League and to two Carabao Cup finals in the space of two years.

This was noteworthy in the context of last summer, when relationships trembled after Staveley’s departure — she and Howe had worked closely together — and the abrupt nature of Mitchell’s appointment. Speaking to journalists during pre-season, Howe admitted, “There’s no point saying I’m happy staying at Newcastle if the dynamic isn’t right.”

Newcastle is a far less intimate club without the presence of Staveley and Mehrdad Ghodoussi, her husband, and has, by necessity, been far less dynamic in the transfer market. But, from a difficult start, Howe and Mitchell have found a way of working together.

“What’s great about Eddie is he’s super collaborative,” Eales said. “He’s unique as a manager in that he appreciates and understands we’ve got this PSR cap. He knows the club and the ownership are providing the maximum support they can within the rules and that every decision has a knock-on effect, that if we choose to renew contracts of players and keep key players, it means there’s going to be an impact in terms of what you have available elsewhere.

“We’re obviously super pleased that we’ve got Eddie as our coach. We’re delighted he’s with us and hopefully he’s going to be with us for a long time.”

The search for a new CEO

When Eales announced in September that he had been diagnosed with a chronic form of blood cancer, few expected him to still be in post six months later. But the outgoing CEO provided a positive update on his own health, while confirming that he is still serving his notice period.

“I wanted to say thanks to everyone,” Eales said. “The fans have been super compassionate and I’m doing well.”

As encouraging as that news is, the identity of Eales’ potential successor remains uncertain. Although Eales claims it is “business as usual”, the reality is Newcastle’s long-term strategy will be determined by somebody who has yet to be identified. Eales is not involved in the recruitment of his replacement, which is being led by “the ownership” instead.

“My focus is on trying to get as smooth a transition as possible for that new person coming in,” Eales said. “Ownership’s aware of my position and the timeframe.”

So the search continues and, with Eales’ notice period unconfirmed, theoretically it could be a matter of months before a new CEO is in situ.

Ticket prices

Tens of thousands of season-ticket holders are desperate to find out what they will be paying for the 2025-26 campaign, but Newcastle have yet to confirm their prices.

Many fear a significant rise, given Newcastle put up prices by five per cent for some seats last year — and, for those coming off the long-term price plan, which will cease to exist, that represents a further hike on the already substantial increase in cost they will have to pay.

West Ham United, Liverpool, Brentford and Wolverhampton Wanderers are among the clubs to have either frozen season-ticket prices for next season, or limited rises following consultation with supporter groups. With the north east among the poorest regions in the UK, and given the present cost-of-living crisis, the Newcastle United Supporters’ Trust (NUST) wrote to Eales in January and urged the club to “make a statement” by keeping prices the same.

Newcastle United Supporters Trust

@nufctrust

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Clubs that have consulted & listened to their supporters, securing concessions & freezing prices for 25/26 season: Liverpool, Brentford, Wolves and West Ham. Well done to those clubs & their supporter groups / FABs We hope NUFC follow suit and put our fans first !… Show more

7:26 PM · Feb 27, 2025

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“It’s always a balancing act,” Eales said, citing “reflected praise” for Newcastle’s Champions League ticketing bands for 2023-24, before expanding into an answer which appeared to lay the groundwork for potential price increases. “When we speak about PSR and trying to compete with teams that have got much bigger revenues, we want to be a team that’s giving Eddie the resources to compete on the pitch, but we’re also aware of where we are in the country… so we always look at it in the round.”

The new bands will be announced “in the near future” and only then will fans learn if the NUST’s calls have been heeded.

 

[Cristov]

So, does anyone know/guess our position going into this summer and 25/26 season?

[Unbelievable]

55 minutes ago, Cristov said:

So, does anyone know/guess our position going into this summer and 25/26 season?

 

Not even the CEO knows, as per the quote from the article above your very post:

 

Quote

“The amount (available to spend) is going to depend on a lot of factors up until then,” Eales said, citing potential European qualification, and the specific UEFA competition Newcastle end up competing in, as one variable.

 

[Cristov]

1 minute ago, Unbelievable said:

 

Not even the CEO knows, as per the quote from the article above your very post:

 

 

Yeah, I never really read it all, my bad. Ultimately you need various plans lined up going into the next season depending on league finish. That's why these guys are on the board for I suppose

[timeEd32]

Yeah, there really are too many factors. 

 

Going to take Eales at his word, but my prediction is that we will sell at least one of Gordon, Barnes, Bruno, or Joelinton. Not because we need to to be compliant, but because it creates flexibility (and possibly also because they want out).

[Colos Short and Curlies]

2 hours ago, FloydianMag said:

 

 

The £30m can't be for the ASM sale to Saudi, it's more timing differences in when we recognise sales in our accounting year and an UEFA calender which I think spreads the profit over 3 years. So we'll see a £15m positive adjustment in 24/25 and again 25/26 for these sales

[timeEd32]

4 minutes ago, Colos Short and Curlies said:

 

The £30m can't be for the ASM sale to Saudi, it's more timing differences in when we recognise sales in our accounting year and an UEFA calender which I think spreads the profit over 3 years. So we'll see a £15m positive adjustment in 24/25 and again 25/26 for these sales

 

Is it that or is it something to do with the Anderson/Greek swap? That's the G3.5 section.

 

Much better news if it's what you said though as it's a big adjustment.

[Colos Short and Curlies]

29 minutes ago, timeEd32 said:

 

Is it that or is it something to do with the Anderson/Greek swap? That's the G3.5 section.

 

Much better news if it's what you said though as it's a big adjustment.

 

I didn't think FRS102 and IFRS were that different in asset exchange, if they are then it could be Vlads fee being taken off Tue profit but that would then mean it's not amortised so still a benefit on future years.

 

I originally thought it might be that UEFA take a June to May period, but if it was that then both transfers would be impacted and the value would be £60m.

 

Either way the wording on the tweet is wrong

[toontownman]

The club weighing up gambling weakening the squad for long term PSR pain.

 

Making the cup final.... then the last week happens

Fans

 

 

[Colos Short and Curlies]

2 hours ago, timeEd32 said:

 

Is it that or is it something to do with the Anderson/Greek swap? That's the G3.5 section.

 

Much better news if it's what you said though as it's a big adjustment.

 

Thinking on this again, if it is related to Anderson/The Greek then I'm all for it. Get rid of the loophole of clubs helping eachother out with stupid sales.

 

Treat all transactions on a window where players move between the same clubs as exchanges where the profit is reduced on the sale to stop stupid deals being made to help eachother out.

[r0cafella]

5 minutes ago, Colos Short and Curlies said:

 

Thinking on this again, if it is related to Anderson/The Greek then I'm all for it. Get rid of the loophole of clubs helping eachother out with stupid sales.

 

Treat all transactions on a window where players move between the same clubs as exchanges where the profit is reduced on the sale to stop stupid deals being made to help eachother out.

Not in favour of this at all personally. How can someone decide the market price of such things? The market has to decide not someone who looks at transfer market. 

[Harry 209]

Apologies if already asked but our total losses over last three years are 157m, so how have we avoided being penalised?

[JT24]

1 minute ago, Harry 209 said:

Apologies if already asked but our total losses over last three years are 157m, so how have we avoided being penalised?

Not all of it will be classed as PSR losses. 
 

Some will be infrastructure, women’s team etc.