Newcastle United are back in the big leagues. Well, the Deloitte Football Money League, at least. Following a four-year absence, the Magpies have been named among the highest revenue generating clubs in world football.
It is easy to forget that Newcastle were once flying as high as fifth in the financial table in the late '90s, but the black-and-whites dropped out of the top 20 in 2010 and rarely ranked during the Ashley era. That has changed under the new ownership.
“Newcastle have been a powerhouse," Zal Udwadia, assistant director of Deloitte’s Sport Business Group, said. "They're a one-club city and investment will only trigger further growth.”
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There is no doubt about that. Following a 25% year-on-year increase in revenue, according to Deloitte, whose money league remains the industry’s most contemporary and reliable independent analysis of the financial performance of clubs, Newcastle have returned to the top 20 with revenues of £179.8m in 2022. However, unlike the Premier League table, it is worth noting 20th-placed Newcastle are still behind Everton, Leeds United, Leicester City and West Ham in the money league, which hints at the work the Magpies still have to do to boost income streams.
There are obvious solutions and qualifying for Europe would be a game-changer if Newcastle manage to hang on in the second half of the season. Not only would life in the Champions League, or indeed the Europa League, bring in more money, when it comes to qualification fees, prize money and gate receipts, it would also open doors commercially. Justifying lucrative sponsorship deals are of fair market value, for instance, is a lot easier when a club sits at Europe's top table.
Boosting these commercial revenues has never been more important after UEFA's financial sustainability regulations came into force last June. Clubs competing in Europe are now allowed to make losses of €60m (£52.65m) over a three-year period, which is double the previous figure, but the new squad cost rule will eventually limit how much can be spent on wages, transfers and agents fees to 70% of overall revenue.
Newcastle have a tight wage structure in place - for squad harmony as much as anything else - but the Magpies' salary to revenue ratio figure is striking. When speaking about this at the Financial Times Business of Football Summit, last March, part-owner Amanda Staveley admitted: "We are running at about 65% and that is still probably too high."
Newcastle have signed Nick Pope, Sven Botman, Alexander Isak, Loris Karius and Matt Targett (permanently) in the months since while only Federico Fernandez, Dwight Gayle and Freddie Woodman have left the club for good. Deloitte, as a result, have estimated Newcastle's wages to revenue ratio is at a whopping 95%. For context, Man City, who top the table with revenues of £619m, have a salary to revenue ratio of 57% while Spurs' is 47%.
Although it is important to stress Newcastle's accounts will confirm the official figures later this year - it surely won't be as high as 95% - the Magpies will need to trade in the months and years to come. Newcastle, after all, have not brought in a decent transfer fee since losing Ayoze Perez to Leicester City in 2019 and a host of players have been loaned out or had their contracts mutually terminated in the years since to get them off the books. That has to change as sporting director Dan Ashworth hinted a few months ago.
“At some stage, you have to trade," he said. "One of the things around Financial Fair Play is you have to trade. We have to be able to generate some money to reinvest and go again.
“I can’t lie to you and say we’ll never have to sell a player, that we’d always be able to hold on to our top talent. That doesn’t happen anywhere.
“Liverpool sold [Sadio] Mane. You have to sometimes make a pragmatic decision to go, ‘OK, we’ll do that because that’s a way of reinvesting in the football club.' But, as a rule of thumb, I would like to think we’ll be able to hold on to our top talent in order to drive our ambitions of driving up the league and competing for cups.”
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