Business

Newcastle football club losses increase

Newcastle player Danny Simpson
Image caption Newcastle's revenues are expected to be higher now they have been promoted

Newcastle United Football Club sank £17.1m into the red as a result of relegation from the Barclays Premier League in 2009, figures show.

The loss, for the end of the 2008-09 season, compared with a £15.2m deficit in the season before that.

Turnover reduced 39% to £52.4m, according to accounts filed with Companies House.

The accounts also show that owner Mike Ashley put a further £42m into the club despite an increase in gate receipts.

The latest figures do not reflect Newcastle's return to the Premier League at the end of last season, with promotion worth anything up to £60m to successful clubs.

Nor do the accounts include Andy Carroll's £35m sale to Liverpool in January.

Newcastle managing director Derek Llambias said: "Our overriding aim in 2009-10 was to secure promotion back to the Premier League at the first attempt.

"Relegation presented a considerable challenge for us financially.

"With such a marked reduction in turnover, largely due to reduced TV and media revenue, we needed to cut our operating costs accordingly without jeopardising our ability to return to top flight football straight away.

"It has been a significant achievement to keep our overall loss at a level similar to the year before despite the impact of relegation, and our ability to do this has been helped immeasurably by the continued financial support of Mike Ashley, who injected a further £42m into the club last year interest-free," Mr Llambias said.

Sponsorship

Revenue from television and other media fell 57% to £16m, although new sponsorship deals were struck with Puma and Northern Rock.

Newcastle's determination to retain the services of enough Premier League-class players to launch a credible bid for promotion meant the wage bill still amounted £47.5m despite a 33% drop from £71.1m.

As a result, the wages-to-turnover ratio increased to 90.6% from 82.6% earlier.

Club debt was stable at £150m, although bank borrowings fell by £25m and were replaced by a loan of the same amount from Mr Ashley, taking the total he has loaned the club to £139.8m, all of it interest-free.

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