Newcastle Unitedís prudence to pay dividends
Mon 17th Oct 2011 | Money & Finance
Newcastle United have revealed they are on course to break even over the coming months. Following the club’s bright start to the new Premier League season, Newcastle’s Managing Director, Derek Llambias has announced the club are on course to settle its debts.
A mission statement released over the weekend read:
“In 2008/09 we reported an operating loss before player trading of £37.7m. In 2009/10 that loss was £33.5m. Once audited, our accounts for 2010/11 are expected to show an operating loss of just £4.7m and this year we hope we will be close to breaking even.”
Mike Ashley’s five-year plan to get Newcastle United on a sound financial footing now has the club in far better shape financially than it has been for many years.
“Our aim is to make Newcastle United self-financing. We cannot continue to acquire debt year after year and rely on additional financial support from the owner,” the statement continued.
“We are pleased that the club is working towards being able to operate within the boundaries of UEFA's Financial Fair Play rules, even during these challenging economic times.
“Over the coming year we will continue to build the club sustainably - on and off the field.
“We have a realistic view of what we can achieve at Newcastle and the time-frame required to achieve it. We have a strict spending policy and will not take a reckless approach which permits spending beyond our means.
“It is a sensible long-term plan for success and we have absolute confidence that this is the right model for Newcastle United.”
But Ashley’s prudence has incensed many Newcastle fans during his time as owner, however the club remained bullish over its stance in the transfer market.
“Our priority during the summer transfer window was to secure exciting young players with huge potential that add real strength to the squad.
“There are certain perceived 'big' clubs that have no financial constraints whatsoever. But for us as a club rash, short-term spending is not the answer and the days of Newcastle United acquiring 'trophy' signings who command huge salaries for past successes on the pitch are over.
“Such players have generated excitement and anticipation in the past, of course, but ultimately they have left the club poorer and with little to show for it in terms of our standing in the league and cup competitions.
“Our focus now is to bring in players who can develop and fulfil their potential at Newcastle United. This does not however discount players of any age who we feel can add experience to the squad.”
The statement also outlined the club’s commitment to payment of transfer fees which they say had contributed to the debt Ashley inherited, “We endeavour to pay transfer fees in a timely manner rather than spreading payments over an unrealistic number of years.
“This is a far healthier financial model which gives us greater certainty over spending in future years. When Mike Ashley took over the club, we were still paying fees for players who had already left."
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