Ashley tightens Newcastle purse strings
Newcastle owner Mike Ashley is refusing to put the club at risk by spending heavily this summer.
The Magpies board has revealed there will be no capital expenditure on squad strengthening following the club's promotion back to the Barclays Premier League, meaning manager Chris Hughton will have to generate funds by offloading players or rely on loan signings and Bosman free transfers.
Their announcement comes following operating losses over the last two financial years which could amount to almost £70million.
Newcastle will instead work to a five-year plan as they attempt to establish themselves in the top flight once again, and will look to develop their own players through the club's academy.
In a statement released last night, the board said: "The club presented its financial report to Companies House this April for the year 2008-2009.
"The financial report shows that there was an operating loss of £37.7million for that year and an estimated loss for 2009-2010 of £32.5 million.
"Newcastle United also has an overdraft of £20million that is fully committed.
"It is clear to the board that no organisation can be successful until the financial position is stabilised.
"The board have therefore structured a five year plan in which the ultimate goal will be to ensure that the club is run at a 'break even' manner by the year 2015-2016.
"The first team squad that won the Championship this year will form the basis of the team for next season in the Premier League.
"There is no plan for new capital outlay on players."
The club also moved to end speculation that Hughton could be replaced by a more experienced manager.
The statement continued: "Chris Hughton is the manager of Newcastle United Football Club and has a contract in place until the end of the 2010-2011 season."
Despite the difficult financial circumstances in which they find themselves, the Magpies remain confident that, if they can retain their top-flight status next season, they can rebuild slowly but surely.
But the days of splashing out club record fees for the likes of Alan Shearer and Michael Owen are long gone.
The statement said: "The board and supporters are aware that Newcastle United currently has a footballing academy brimming with talent, skill and dedication.
"As part of Newcastle United's quest for a team that truly represents the values of the Geordie nation, the club will look to promote, where it can, from within and for the academy to become a leading light as one of the best, if not the best, in the UK.
"The days when players such as Alan Shearer, Steve Bruce, Peter Beardsley and Michael Carrick had to leave Newcastle to begin their illustrious football careers elsewhere are over.
"Newcastle United is more than aware of the great passion for the game of football that exists locally and is intent on ensuring that every great Geordie footballer has the opportunity to play for his home team club."
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