So now we do know why Mike Ashley doesn’t want to spend any money in January.
Newcastle United’s financial outlook is bleak, but not nearly as bleak as that of most relegated clubs.
It has been clear that the club will be paying the price for Steve McClaren’s disastrous for nine-month tenure for so many years to come.
The full figures, which are not yet available, will give a more detailed picture of the Championship club’s situation.
Essentially, the results cover the relegation season, and next years’s figures, covering this term, will be much worse given the drastic reduction in TV revenue.
United have issued a yesterday outlining their latest set of financial results.
A company controlled by owner Mike Ashley has also loaned the club 33million, though £18million of this has gone to repay an outstanding personal loan made by the billionaire. The rest has gone on running costs.
But what about the £30million-plus profit the club made from last summer’s transfers?
Managing director Lee Charnley has the answer.
“Outgoing transfers will ultimately generate a significant net player trading surplus for the summer 2016 transfer window,” he said.
“But, due to the cash profile of the deals, this will result in a net cash outlay in 2016-17.”
In other words, Newcastle are still owed a lot of that money – and the club will report a loss this time next year.
Ashley was willing to bankroll the club this season – Benitez alone takes home a reported £5million-a-year salary – but he drew a line in the sand. Promotion won’t transform the club’s financial fortunes overnight, but the financial picture could be a lot, lot worse.
So back to January, when manager Rafa Benitez was left frustrated at the club’s unwillingness to sign Andros Townsend.
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