Fin post på Newcastle forumet i England ang. Vår finansielle posisjon:
OK, here we go, an attempt to find out and explain FFP constraints that we face this year and in the future.
It will be written in 2 parts, this being part 2 where I go over our financial numbers for past and upcoming seasons.
Keep in mind that a lot of the numbers in this post will be estimates.
However, you will see by the end that even with estimates, the money we can spend this year isn't really limited by FFP but rather how aggressive we want to be this year and how much we want to limit ourselves in the future.
As was outlined in part 1, the maximum loss we can sustain in a 3 year period is £105m.
In season 2021/22 we had a total revenue of £180m. Match income accounts for £27.3m, broadcast revenue £124.1m, commercial revenue £26.5m and other sources £1.8m. We also made a profit of £5.8m on disposal of player registrations.
When it comes to losses, total amortisation was £49.7m (increased a lot by January signings compared to year before) and staff wages were £170.2m.
In the end, for FFP calculations we were in a total loss of around £-35.7m for the whole year.
For season 2022/23 we had a projected revenue of ~£231.4m. Projections for match income are around ~£30m (based on few extra cup games and increased ticket prices). Broadcast income was around £163.4m, due to new and more lucrative EPL TV deals, better standings position and more televised games.
Commercial revenue is projected to have been around ~£35m, thanks to noon sleeve sponsorship and a couple of new commercial partners. With other source of revenue at around £3m, total revenue is projected to be around ~£231.4m. We also made a profit of around £13m in player sales.
As for losses, total amortisation was ~£80m due to only Dubravka amortisation of £1m expiring and all of summer and winter signings adding to amortisation costs. Wages have increased somewhere close to ~£180m.
All in all, for FFP calculations, the total loss was around £-15.7m.
Which leaves us the next year with UCL play and new shirt sponsor. Our spend for next year would be allowed up to £54m in losses.
Let's first go over our minimum revenues which I hope is how our management is calculating future guaranteed revenues. We don't want to put ourselves in a Chelsea or Everton situation.
We will do that by calculating REASONABLE worst case scenario. Obviously there exists a scenario where we get relegated, but even in bookmakers the odds for that right now are 500/1.
So, we will choose a scenario where we end last place in UCL with 4 points in group stage and where we finish 10th in EPL. Obviously, we would hope for better results, but we should be prepared for anything.
In that case, our revenues for next year would look something like this: match income at ~£40m (slight increase in ticket prices and extra UCL games), £150.4m in broadcast revenue (10th place in EPL) and commercial revenue around £55m (Sela deal bringing an extra £18.5m).
UCL revenue would be around £30m (would be a lot higher but our UEFA coefficient is very low, hopefully something we improve this year). It can also go a lot higher with a deep run, but we calculate worst case scenario here. With other revenues at around £3m, total revenue would be around £280m. For reference, in season 2021/22 that would have put us in 14th place in the world, right above Inter Milan.
Also, sale of Chris Wood for £15m counts towards this year.
When it comes to costs, total amortisation costs increase to ~£90m. That is because only Murphy's and Krafth's amortisation cost expires, while quite a bit is added by (primarily) Tonali and Minteh. Also, total wages increase to ~£190m.
All together, the profit for this year so far is ~£15m, even when including Tonali and Minteh transfers. Given that we can afford a loss of ~£54m, we still have ~£69m to spend.
Those £69m do not mean we that can only spend £69m on transfer fees. Because of amortisation we could theoretically buy two players for £10m salary and £120m transfer fee each. That transfer fee would count as only £24m for this year per player.
However, that would be very unwise thing to do, as it is very much not a guarantee that we will manage to qualify for UCL next year which those transfers would require. Basically, UCL money gives us extra non-guaranteed money this year. Pushing FFP to the limit this year would require us to qualify for UCL every year for next few years in order to avoid selling any key players.
That is also the reason Howe said that Sela sponsorship doesn't improve our budget this year. It will be very helpful in the future, but for this year, after qualifying for UCL, we weren't going to push the FFP to its limit anyway.
So, how much will we spend this year? Hard to answer. It all depends on how aggressive we want to be. Similar to last year, if an opportunity like Isak opens up, we can take it, but otherwise I would expect a slow summer. Probably around £25m in wages + amortisation. One version of that is 2 rotation level players with a combined transfer fee of £75m.
Oh and also, a revelation in all of this. We don't have to sell anyone. We might if we get a really good offer that we thinks will only come once, but when it comes to FFP: we don't have to sell anyone.
