Inspired by members of the NUFC board saying Sports Direct only takes up unused advertising space at SJP, as well as Newcastle United’s lousy commercial revenue figures, I decided to do a little number crunching and research.
Referring to figures from other clubs using Deloitte’s “Annual Review of Football Finance” and all the other sources I could find, as well as looking at other revenue streams for the club using the club’s last published accounts. I estimate that as per Newcastle United’s last published accounts (for the 2011-12 season), the club is only getting just over half the commercial revenue it should be.
According to my research, if Newcastle United were an average Premier League club with around 27% of the club’s revenue coming from commercial sources such as shirt sales and sponsorship, we should be getting around £25 million per season in total when we are actually only getting only a paltry £13.8 million. Having written that, with the third highest average attendances in the Premier League, some might say that these figures could be skewed somewhat as Newcastle United might be expected to get a higher percentage than normal from matchday revenue. However, they were exactly the same as the average for the whole Premier League, around £21.5 million of £93.3 million, or 23% of total turnover.
This leaves Newcastle United even more dependent than other clubs on revenue from broadcasting revenue. On average, Premier League clubs receive 50% of all their income from Premier League broadcasting rights, though at Newcastle United it is a huge 59.6%. Of course, this is also expected to rise even higher this season with the huge 70% increase in broadcasting rights payments over the next three years. Of all the top twenty richest clubs in term of turnover (where we are now 20th), Newcastle United were the second most reliant on broadcasting revenue, just behind Internazionale. With the above mentioned increase in broadcasting revenue, Newcastle will probably become THE most dependent, but we’ll see.
The club have stated in the past that the commercial revenue figures are indeed “disapointing,” but have recently stated that all of that will change when the Wonga sponsorship money kicks in. This is hard to see though if the club are only receiving around £6 million per season for shirt sponsorship and £1.5 million for Academy sponsorship, a figure which previous Managing Director Derek Llambias confirmed as being “not far off” before he left. As I have mentioned already in a previous piece on my own blog, this is roughly around the average of all Premier League shirt deals (£7.36 million).
Despite what the club say, the amount of Sports Direct advertising at St James’ Park is just so extensive, there wouldn’t be much left if it were all taken away, and it’s hard to believe that a club like Newcastle United has such a problem attracting real advertisers. If they are, there’s something seriously wrong.
My latest post on metro.co.uk.