Andy's here with his usual detailed analysis of our accounts, explained in terms we can all understand
Newcastle have released their financial accounts for the year 2024/25. This was a season where we qualified for the Champions League and won our first domestic trophy in 70 years.
To many fans, I suspect football finances are as interesting as algebra. But please bear with me. These accounts shine a light on the state of the club, the ambitions of the owners and our potential summer business.
Here is a summary of the last 5 years…
…and these are my top ten takes from them.
Headline is a ‘record profit of £34.7m’… but the devil is in the detail
As with any set of financial results, there’s the good, the bad and the ugly. As I’m a glass half full kind of chap, I’ll don my rose-coloured spectacles and try to add my positive spin to the 24/25 numbers.
Record profits, record turnover, comfortably meeting Profit & Sustainability rules (PSR), qualifying for the Champions League and our first domestic trophy in 70 years. What’s not to like?!
Well, there’s a small matter of a Chelsea-esque bit of creative accounting known as an ‘inter-group sale’. Something that the Londoners (amongst others) have used frequently to comply with PSR. Naturally, I’m now in the process of frantically deleting those disparaging articles I wrote about those “cheating Cockney bastards”!
NUFC sold SJP and adjacent land to affiliate PZ Newco Holdings for a profit of £133.1m. If only they’d done it 12 months earlier.
Newcastle United Football Company Limited sold their ground (and adjacent land) to PZ Newco Holdings Limited. Both of which are owned by Newcastle United Limited.
Confused? Well, all you really need to know is that for the purposes of PSR, the sale generated a profit of £133.1m for NUFC and allowed them to comply with PSR in 24/25 (and almost certainly in 25/26).
I shall deploy the “Chelsea defence” here (trotted out by the King’s Road mob over the last few years after selling various parts of their club to other parts of their club). The sale was absolutely within the rules of the Premier League and many other clubs (Aston Villa, Birmingham, Sheff Wed, Derby, Reading) have done similar. Not convinced? Ok, let’s not dwell on it.
Without that sale, the accounts would’ve looked very different. Newcastle would have made a financial loss of £98m and likely have failed the PSR by about £10m.
Frustratingly, had they made this sale 12 months earlier, we’d not have had to sell Elliott Anderson and Yankuba Mintah to comply with PSR in 23/24. Bugger.
From 26/27, the Premier League replaces PSR with a new financial framework called the Squad Cost ratio (SCR). SCR essentially limits spending on player wages, transfers and agent fees to 85% of revenue and player sales. It also prevents clubs from artificially inflating revenue by selling assets to sister companies. So Newcastle got in just in the nick of time! Presumably, Newcastle’s whole Finance department are now busy scrutinising the new rules for any loopholes. If they’re not, they should be.
The Premier League is broadly following UEFA who have already adopted SCR although they have a stricter percentage threshold (70% from 25/26). As a result…
…Newcastle will likely fail UEFA’s Football Earnings and Squad Cost Rules as the ground sale will not be counted as revenue
As a result, NUFC will most probably have to pay a fine to UEFA as Chelsea and Aston Villa did in 2025. Essentially, a slap on the wrist.
Squad cost will increasingly be the key financial indicator for European football clubs. It also provides a good indication as to which clubs should be expecting to win trophies and qualifying for Europe. With a couple of honourable exceptions, we can generally expect clubs with the highest squad costs to win the major trophies.
Newcastle won their first domestic trophy in 70 years despite only having the 7th highest squad cost in the Premier League
When winning the Carabao Cup, Newcastle became only the 2nd club outside (and I apologise for using the term) the “Big Six” to win a domestic trophy in ten years They did so despite having only the seventh highest squad cost in the Premier League.
Leicester (being the other non-Big Six club) are rightly lauded for their achievement in winning the FA Cup in 2021 which is still considered by many to be unique. But it should be noted that Leicester had the 8th highest squad cost in the PL at the time.
Whilst some like to portray NUFC as the richest club in the world and Leicester as tiny plucky underdogs, the reality is that they were both broadly the same in punching above their relative financial weight to win their trophies. The achievement of both clubs (and later Crystal Palace) should not be under-estimated.
Newcastle will continue to have to compete with clubs that have far higher squad costs, in some cases twice as high, in their attempts to win more trophies and qualify for Europe.
To increase their squad costs and still comply with SCR, Newcastle will have to increase their turnover. The key to this is increasing commercial income.
Newcastle’s commercial income is at last growing rapidly…
Commercial income is key to Newcastle’s continued progress and attempts to break into the “Big Six”. In fact, I’d suggest it was THE most important factor.
Commercial revenue increased by £36.3m (42%) in 24/25 to £122.7m. This was mainly due to higher kit & merchandising revenue (Adidas partnership + transition to in-house retail & licencing), new deals with Red Bull and VT Markets, three concerts held at SJP and the opening of the STACK fanzone.
Commercial income has more than quadrupled since the PIF takeover and very little of that growth has come from PIF related organisations. And it will continue to grow with the first ever training ground and training-kit sleeve sponsorship with the deal signed with KNOX hydration (reportedly £6m per year for 3 years).
…But commercial revenue is still lagging behind the “Big Six” and the gap is getting wider.
Whilst NUFC are rapidly increasing their commercial revenue, the Big Six continue to grow theirs at an even faster rate. If Newcastle are going to compete, they are going to have to reduce that gap.
Cast your mind back to last summer when a host of strikers (Joao Pedro, Liam Delap, Hugo Etikite, Bryan Mbuemo, Benjamin Sesko) turned down Newcastle. They did not do this for football reasons. They did it because the clubs they signed for pay higher wages.
And they pay higher wages primarily because they generate much higher commercial revenue.
After 14 years of zero growth under Mike Ashley, it will take time for Newcastle to build up their commercial revenue to the levels enjoyed by the Big Six. In the meantime, they will have to seek out other avenues to close the gap, particularly with the loopholes on asset sales being removed.
The quickest way to do this is through player trading.
We need to improve our player trading
The first thing to note is that player trading should not be seen as a negative. Every club trade players including the “big six”. Done well, trading players can help clubs comply with SCR and still be successful. In fact, I’d suggest it’s essential.
Newcastle must improve in this area. The likes of Bournemouth, Brentford and Brighton have been light years ahead of Newcastle with their player trading strategy routinely generating profits and wisely re-investing in young talent.
Since the PIF takeover, Newcastle have largely only moved on players that are unhappy (Isak and Kelly), at the end of their careers (Almiron and Wilson) or in a desperate effort to comply with PSR (Minteh and Anderson).
So if NUFC have to sell one or more of their “stars” (or expensive flops) then so be it. The trick is to invest any profit wisely and improve the overall value of the squad.
Whilst Chelsea may not be blowing the Premier League away, nobody can dispute that they have been backed massively in the transfer market by Todd Boehly. This has been enabled by their player trading particularly the sale of their academy stars. Tammy Abraham, Mason Mount, Billy Gilmore, Loftus-Cheek, Hudson-Odoi, Lewis Hall have all departed for sizeable fees. These fees are pure profit in the accounts as there’s no residual amortisation to deduct from the fee. In total, Chelsea have banked over £250m from academy sales since 2022.
In 24/25, NUFC generated less than £20m in player sales. Our ability to fund future transfers will be severely curtailed if we cannot generate cash from player sales. We just need to bring better ones in than we sell!
The accounts suggest the new owners are fully committed to NUFC
I’ve seen some suggestions on social media that PIF and the Reuben brothers are not fully committed to NUFC. I’d counter that the accounts tell a different story. The level of investment in the club is substantial.
With their purchase of the club and subsequent investment, PIF and the Rueben brothers have now committed over £3/4b to Newcastle in less than 5 years. I acknowledge that this investment is tiny in relation to PIF’s total portfolio but for a post-industrial outpost in the North East of England, it’s not insignificant.
Additionally, the club have been left virtually debt free compared to other PL clubs since the takeover.
The Newcastle Chair, Yasir Al-Rumayyan, has frequently shared his ambition to make Newcastle the number one club in the world. That commitment will be further tested with the required funding for a new training ground and stadium.
Do the accounts tell us anything about the likelihood of a new ground?
Not really.
It’s been reported that Newcastle are planning to build a new state of the art training facility for £200m and exploring a £1bn+ project to redevelop St. James' Park or build a new stadium, with potential public funding sought for surrounding regeneration.
We’re told that the sale of the St James’ Park leasehold to PZ Newco Ltd was not a PSR workaround but to facilitate financing for either expanding the current ground or moving to a new stadium.
*"The motivation was very much to reorganise our property assets and get them into the correct legal boxes to allow us to go forward with our potential development and to facilitate that with financing"*according to Newcastle's chief financial officer Simon Capper. Er ok Simon.
We shall wait and see.
What the accounts do tell us is that infrastructure investment has returned with the takeover. Capital expenditure (costs related to ground improvements, training facilities etc) had virtually ceased under Mike Ashley. From 2010 to 2020, total capital expenditure was a paltry £7m. To put this spend in context, over the same period Spurs spent £1.4b, Man City £378m, Liverpool £238m and Brighton £181m.
The new owners have already invested about £60m in upgrades to hospitality & concourse facilities at St. James’ Park and improved the first team training ground.
And finally ………..
Do the accounts give us any clues about our potential business in the summer?
The 24/25 accounts will be 12 months out of date by the time the summer arrives so difficult to draw too many conclusions as to what they might mean for business at the start of the 26/27 season.
What the 24/25 accounts do tell us is that NUFC have an estimated squad cost ratio of approximately 83%, right on the cusp of the Premier League’s 85% threshold. That ratio may improve in 25/26 with the income from our Champions League adventures but I think we can safely say that it’s unlikely to be repeated in 26/27.
That means that compliance with the new SCR could be challenging. We can no longer sell our ground to ourselves for a huge profit so we will need to rely on increasing commercial revenue and player trading to comply.
In other words, it may be that we’re going to have to sell before we can buy. That being the case, we can’t afford to make the same mistakes in the transfer market that we did last summer.
If we do, it could set us back years.
Andy Trobe
All graphs courtesy of Greg Cordell @gregorypcordell