Newcastle United could face a 50% drop in income
May 27 2009 by Adam Jupp, The Journal
"Similarly, there will be people who will be prepared to stick it out for one season in the Championship but may drop-off if they don’t bounce back straight away.
"Then, on the back of that, as a Championship club, the sales of merchandise and income from corporate hospitality, will all suffer as well. All of these things will be hit."
United’s latest accounts reveal the club’s income rose from £87m in 2007 to £99.4m last year. That included increased media revenue – primarily television cash – of £41.1m, matchday income of £32.4m and £25.9m in commercial earnings.
Life in the Championship spells a reduction in media money of around £30m, while it is estimated matchday income could be reduced by around 30%. And with merchandising and corporate hospitality also set to be hit, revenue next season could be as low as £50m.
The accounts also reveal the club has an average monthly workforce – including players and management of 425 people, with an extra 1,301 employed on a matchday.
Total payroll costs for the last financial year were £74.6m, which had risen from £56.7m in 2007. There have been comings and goings since the accounts were published, with stars including Charles N’Zogbia, James Milner and Shay Given all being sold. But big earners like Geremi, Joey Barton, Alan Smith, Nicky Butt and Damien Duff are still on the payroll.
Mr Slack said an essential way of cutting costs will be to reduce the wage bill. He added: "There may be players coming to the end of contracts who can be removed from the payroll immediately but of course, the club won’t receive any money for them.
"The ones they are left with, who are in contract, may have clauses meaning their wages are reduced if the club is relegated. I don’t know what the situation is but there are rumours none of the players have these clauses.
"Either way, these players will potentially be difficult to get rid of because they have already demonstrated as a team they weren’t good enough to stay in the Premier League. Then, they may not want to move unless the club they are going to is going to match the wages they are currently on, so it could be harder than you think to change the wage structure."
