Newcastle’s 'financial model' leads to boast of £1.4m profit

Spending structure allows Llambias to show off a club in the black rather than deep in debt

Derek Llambias leaned back in his chair in an executive box overlooking the St James’ Park turf and talked of coal.

“We do not have some sort of oil well under our pitch,” he said. “We have a bit of coal, which we can’t dig up, but we haven’t got an oil well and we don’t have the revenues of, let’s say Man United. They’ve got 350 million global supporters. We have 3.5m. It is one per cent. It is a massive, massive difference so you can’t have that expectation that this club will be challenging year on year. But we are trying to model ourselves as a top-eight club, we try to get full houses, that is where our affordable ticketing comes in, because you have to. The North-east is struggling, football is expensive but we are staying within the format of our model and we are sustaining our position financially.

“How do we challenge the big clubs? By buying the right players. If you look on that pitch on a match day, you would see Moussa Sissoko, who is 23 and is here on a six-year contract – it was a fantastic deal and he is a fantastic player. Then there is Yohan Cabaye. We have some fantastically talented players at this club. They come here because it’s Newcastle United and because they want to play here, it is a big factor.”

Yesterday was a good day for Llambias, Newcastle’s managing director, and Mike Ashley, the owner. The club recorded a profit (for a second successive year) of £1.4m. Football is an industry submerged in red. A team in the black remains the exception. Newcastle, under the guidance of their chief scout, Graham Carr, buy young – and, most recently, from France. Llambias revealed that the five players they signed in January cost £31m but it was all within tight guidelines.

“We’ve maintained a very good standard on the pitch working within our financial model and our transfer policy,” he said. “The new signings all stayed within our model. January for us was fantastic business but we had already done two of those deals [Yoan Gouffran and Sissoko] as pre-contract deals for the summer. The injuries and the position we were in the league [near to the relegation zone] meant we brought those deals forward. Was that good business for me? No. But for the club it was still fantastic business. It cost us an extra £10m in fees and wages but it’s worth it. Our net spend in January was £31m so it’s a huge chunk.

“I think Graham Carr has more company when he is out there now,” he joked. “He’s not wearing a disguise just yet. If he started wearing glasses, he would start looking like his son [the comedian Alan Carr]!”

Newcastle’s turnover for the year ending June 2012 was £93.3m, putting them in the top 20 revenue-generating clubs in the world. Their wages-to- turnover figure had risen to 68.7 per cent. It will be higher after their enforced January investment but the new TV deal, which will be worth around £30m per club, will readdress their desire to reduce the amount to nearer 60 per cent.

“There is still money available,” said Llambias. “There are several positions we are looking at. Next year, we will have the TV money. There is a budget to spend but our transfer policy remains the same. No trophy buys. Basically, we will continue our model as it is. It works so we won’t break it.

“Obviously Mike is pleased with the accounts side of things. He is a little bit disappointed with what is happening on the pitch, which we all are. It has been a freaky year, with the injuries we have had. How do you plan for those sorts of injuries, unless you have so much depth in your squad?

“The club is stable now. We are the guardians. We have to do our best. Generally we are not losing as a business. The club is in safe hands, financially it is in safe hands, it has a very strong backer and we have got a very strong support team.”

Have you tried new the Independent Digital Edition apps?
The Queen and the letter sent to Charlie
Arts and Entertainment
Eurovision Song Contest 2015
EurovisionGoogle marks the 2015 show
Two lesbians hold hands at a gay pride parade.
peopleIrish journalist shares moving story on day of referendum
Arts and Entertainment
<b>Kathryn Williams</b>
When I was supporting Ray La Montagne I was six months pregnant. He had been touring for a year and he was exhausted and full of the cold. I was feeling motherly, so I would leave presents for him and his band: Tunnock's Tea Cakes, cold remedies and proper tea. Ray seemed painfully shy. He hardly spoke, hardly looked at you in the face. I felt like a dick speaking to him, but said "hi" every day. </p>
He was being courted by the same record company who had signed me and subsequently let me go, and I wanted him to know that there were people around who didn't want anything from him. At the Shepherds Bush Empire in London, on the last night of the tour, Ray stopped in his set to thank me for doing the support. He said I was a really good songwriter and people should buy my stuff. I was taken aback and felt emotionally overwhelmed. Later that year, just before I had my boy Louis, I was l asleep in bed with Radio 4 on when Louis moved around in my belly and woke me up. Ray was doing a session on the World Service. </p>
I really believe that Louis recognised the music from the tour, and when I gave birth to him at home I played Ray's record as something that he would recognise to come into the world with. </p>
booksKathryn Williams explores the works and influences of Sylvia Plath
Liz Kendall played a key role in the introduction of the smoking ban
newsLiz Kendall: profile
Life and Style
techPatent specifies 'anthropomorphic device' to control media devices
The PM proposed 'commonsense restrictions' on migrant benefits
voicesAndrew Grice: Prime Minister can talk 'one nation Conservatism' but putting it into action will be tougher
Caption competition
Caption competition
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Bleacher Report

Daily Quiz
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?