Newcastle United football club has recorded a £1.4m loss in its results for the first half after, spending more that £6m on transfers as it attempted to enter the European Champions League.
The club has spent over £16m on players and made a loss of £6.1m on transfers as players Laurent Robert and Craig Bellamy. Operating profits were up 16% at £7.9m compared to last year before costs related to player trading.
Newcastle FC’s wages, however have been kept down, accounting for only 42% of the company’s turnover compared to 50% in most Premier League clubs. This highlights the crisis which most football clubs are facing as players demand top salaries for their services.
This week Newcastle FC supported its auditor Andersen despite the Enron crisis and announced merger with KPMG saying: ‘At the moment we are very satisfied with the auditor’s work’.
Despite increased bottom-line losses the club’s turnover was up 11% on last year at £35.8m, with a 37% growth in television revenue.
John Fender, non-executive chairman of Newcastle FC said: ‘Our ambition is to get into European football, and we hope that will be the Champions League next season.’
The investment is showing signs of paying off, however, with Newcastle handily placed to grab fourth place in the Premier League, and a money-spinning entry into the Champions League next season.