Quote of the day

"Matchday and commercial revenue is a key driver because that's where the Club can compete with - and outperform - its competitors to enhance its spending capabilities. Ultimately the income the Club generates, particularly, given the restrictions of the Premier League FFP Rules, from matchday, commercial i.e. non-TV income, will directly impact on the strength and quality on the pitch."

The club's board issue a veiled warning to supporters contemplating a boycott over Jabba's continued ownership of the club: do so (whether by simply staying away or by refusing to give money to club catering services and bars, the course of action proposed by Neil Crossley and Time4Change) and you'll be harming the club and the team rather than the owner.

The comment appeared in the statement accompanying the accounts for the year ending June 2013. Commercial revenue was up on the previous season (24.2 per cent to £17.1m), presumably partly due to the contribution of sponsorship from Wonga, though the purchase of a club-branded onesie for me by my work colleagues will also have helped...

Matchday revenue was also up, by 15.9 per cent to £27.8m. Given that this was partly attributed to the additional Europa League matches, which also contributed to the media revenue, then one does wonder why that competition is apparently regarded with distaste. The answer, I suppose, lies in the fact that media revenue overall was down eight per cent to £51m, that this is tied to our league position and that last season's lowly finish wasn't offset by our European adventure. In this regard, it could be argued that we should prioritise the Premier League and that Europe was a distraction (a source of injury and fatigue) that proved costly in terms of our league position. I'd maintain that we should have built a squad that could cope with the dual demands, but I doubt that's the way the powers-that-be would see it.

One positive (particularly in relation to many other clubs) is that we're no further in debt than we were last year - we still owe Jabba his £129m loan, but it's interest-free and there's no timescale for repayment (though presumably that does mean he could suddenly insist on it).

Update: In his post about our accounts on his Football Economy blog, Wyn Grant notes: "The argument that lacklustre spending by Ashley will be justified by the arrival of financial fair play rules is something of a gamble. It still remains to be seen how these complex rules will be implemented in practice or whether they will be subject to a legal challenge." A very valid point - as laudable and honourable as our apparent determination to play by the rules is, we might be left looking like chumps if others flout them and suffer little or no punishment as a consequence.

A price worth paying?

The BBC's annual Price of Football report has been published and, as usual, makes for interesting reading.

As was the case last year, our club continues to offer the cheapest day out in the Premier League - a day out being defined as the combined cost of the cheapest matchday ticket plus a programme, a pie and a cup of tea. The cost has increased by 20p to £23.20, but the next lowest, for Cardiff, is £28.10, nearly a full fiver more. What's more, it's less than the cheapest day out at no fewer than 18 Championship clubs, 20 League One clubs and 17 League Two clubs.

Liverpool come out at the top (or bottom, depending on how you want to look at it) of the Premier League table with £46.60, though West Ham run them close. As the Hammers' hefty £45.70 indicates, there's little correlation between the status and success of the club and what it charges. A day out at megarich title challengers Man City could set you back as little as £28.10, while the Etihad is also home to the cheapest season ticket, at £299.

Intriguingly, the cost of our equivalent is given as £530, whereas last year it was just £322. There's no specific comment in the article about the reason for the significant discrepancy, but presumably the oddity can be explained. Perhaps we just scrapped our cheapest season tickets? Answers on a postcard. Either way, it means we compare much less favourably to our rivals than we did before - though it's still some way short of Arsenal's eye-watering £985. Talk about a grand day out...

Black and white - and in the black

Two slightly different takes on the club's figures for the financial year ending June 2012 from the BBC and the Guardian. The former led with the fact that our operating profit fell by nearly £6m to £7.5m - but TBW, to her credit, instead rightly focused on the positive, noting that the fact we've turned in a tidy profit at all in these straitened economic circumstances is the real story. Both reports also noted that we've elbowed our way back among the world's top 20 revenue-generating clubs.

Other interesting observations were that our ticket revenue has actually dipped slightly despite healthier attendances due to the commendable decision to freeze season ticket prices, and that our wage bill has rocketed by 20%, now standing at 68.7% of turnover. While that's not ideal (Llambiarse has spoken of the desire to nudge it back down to about 64%), it's nevertheless a far cry from the unsustainable days of 80%+ and much better than many if not most other Premier League clubs. It's not for nothing that we're confident of being in good shape to comply with the Financial Fair Play regulations.

Stability and signings

So, what to make of Llambiarse's recent pronouncements in the Ronny Gill (helpfully collected together here by .com)? Let's examine some of the most interesting (and contentious) comments...

"The club has never had stability. It needs it. This is too big a club not to have stability. Do we want to find ourselves in a situation when we have a manager for 15 to 20 years? Absolutely. If the manager works, we work. You cannot get any better than that. ... We started off with Graham [Carr] and he is a major factor for us. We went through the managers and the coaches, giving them long-term deals, and fundamentally that's what we want to do. ... In reality, we do not work like other football clubs. If other clubs bring in a new manager then there are lots of staff changes. When Alan came here, all of the backroom staff were told their jobs were safe. We mean that. It brings a different atmosphere to a club. People then think 'hang on, they want stability here.' Alan, JC, Stoney, Peter Beardsley - they are all part and parcel of planning for the years to come. We do not work any other way. We do not make knee-jerk decisions - we react but we do not knee-jerk."

So, stability's clearly the watchword, then - something preached by many football club chairmen and owners but actually practised by far fewer. In fairness to Llambiarse and Jabba, they do seem to be paying more than just lip service to it - unlike, say, the Al-Hasawis at Nottingham Forest who have been talking about long-term strategies and five-year plans but parting company with managers more often than ASBO gets himself into a physical or virtual scrap.

However, it's overstating the case somewhat to say we're somehow unique - the lengthy reigns of those in the hotseats at Old Trafford, the Emirates and Goodison Park would suggest as much. And to claim not to make knee-jerk decisions is to focus firmly on the present while glossing over the mistakes of the past (such as employing the Poison Dwarf and JFK).

"We weren't prepared for Europe so soon. It's a very difficult competition for us. Even now we have to concentrate on the Premier League. In reality, this year we aren't as ready for it as we'd like to be. ... Next year we will have more depth and we will have a better foundation. Then we can go for everything, then it's different. Once this squad gels, this squad is capable of achieving great things in a very difficult league. If we have this squad and we can add the depth to it, we can give a run to anybody. I really think that, but do I think we're really ready to be in Europe? Talking as somebody who runs this part of the business, we just haven't got enough depth yet."

Of course the league is our bread and butter, but whose fault is it that we were ill equipped to cope with the rigours of European football? Last season's fifth-placed finish might have been a wholly unexpected surprise, but we nevertheless had all summer to strengthen - and failed to do so.

Again, in Llambiarse's defence, he did also go on to concede that a mistake was made - that mistake being "so fundamentally tight on the model": "We just did not give ourselves enough slack." However, he also sought to deflect criticism by referring to the "horrendous injury list" and the fact that we clung on to our star players in the face of "interest and pressure from agents and clubs" - both valid points, admittedly, but neither should be allowed to detract from the club hierarchy's failure to recruit.

"Looking at our working model, I had planned for two of [the January] signings to arrive in the summer. We missed out on two others by the way. The other two would have been on top of the five we brought in. ... We just had to bring things forward. Normally we would not do that. I spoke to Graham Carr and he said in football you will not see this again. He felt what was happening with our squad was unprecedented as far as injuries were concerned."

This squares with the Silver Fox's comments about us having "accelerated" deals for certain players in January - though interestingly the reason Llambiarse gave for doing so was the acute injury crisis rather than simply our league predicament.

"[The new signings] did not just crop up in November, we identified them a long time ago. If you look at Sissoko, Graham's first report was from 2010. Graham knew about him from when he was 18 - we follow players for years."

Evidence of extensive scouting and due diligence? Very much to be welcomed at a club famed for its short-sightedness. I like the image of Carr secreting himself in bushes and peering at the cream of young European talent through his binoculars, or hailing cabs and saying: "Suivez cette voiture-la, s'il vous plait!"

"At the end of the day [France] is a market which excites us. We have to explore other markets, though, which we do. ... We keep an eye on the UK market too. British players are very expensive, which is a factor for us."

Fair enough - it's not that we wouldn't like a predominantly British squad, it's just that Europe (and France in particular) seems to offer far better value at the moment. Given the strictures of that self-imposed financial model, we haven't got quite the purchasing power of yore so need to make the most of our connections and contacts.

"We put a lot of work into [the Loic £emy] deal. It is like everything else, we do not really want to break our policies. If you do not want to come here and play then it is is your choice. He made the decision, so there you go. What can I say? We put our work in, we lost it and we moved on. We did it before with [Modibo] Maiga. ... Let's not forget Loic is a very good player. Unfortunately he is now injured, but he has had a season of injuries. Sometimes you have to take that risk because you might not get value in a player."

Spot on - it's £emy's loss, and if he'd rather trouser all that cash while QPR slide towards the Premier League trapdoor, that's his lookout. I'm not sure what that last sentence means, though - sometimes you have to take the risk NOT to sign someone with a track record of injuries? Ultimately that's not the reason why the transfer to Tyneside didn't happen. Nice use of the word "unfortunately", mind - I assume (and sincerely hope) this was uttered with a smirk...

Speaking of taking a risk on players with injury records...

"I wish [Demba Ba] well. You have to understand if you go back to the basics of the deal, we took a chance on Demba and Demba took a chance on us. ... People criticise us for the clause, but it was part of the gamble for Demba as well. ... Maybe he wanted to prove himself, but for us I have no regrets on the Demba deal or Demba leaving. We have to move forward. With Demba we had him for 18 months and he scored 29 league goals. He went out of the club his way, and we have replaced him."

Again, this neatly summarises my take on the situation. The initial deal suited both parties (we didn't want to be lumbered with a permacrock on a long-term, high-salary deal) and, while we were entitled to try to renegotiate terms when things worked out well, Ba was within his rights to assess his options and it was no real surprise when we couldn't compete with Chelsea's allure. We should be grateful for those 29 goals and move on.

That said, whether we're moving on with a replacement in position is another matter. Goofy may have got his first goal in black and white (well, maroon) on Saturday, but Llambiarse is counting his chickens long before they've hatched if he's suggesting that the Frenchman is Ba's heir. In truth, given that Goofy's playing out wide, the onus is on Papiss Cisse, now operating in his favoured role through the centre, to up his game considerably and step into his compatriot's sizeable shooting boots.

"The Europa League needs fewer games - that is really the way I see it. The competition needs to be shaved down and reshaped. The incentives need to be different. The Champions League is worth around £44.3m if you win it, but the Europa League is £8m if you win it."

Fair comment I suppose (though the discrepancy will always exist, given the prestige surrounding the premier club competition) - but it would perhaps be nice to have a bit more recognition for the non-financial benefits of European football such as the experience gained by the players, using it as a carrot to entice potential new signings and the simple, good old-fashioned excitement of there being a trophy up for grabs. If Llambiarse was determined to dwell on the monetary value of participation in the Europa League, then he could at least have mentioned the additional gate receipts.

And finally, some comments on QPR following on from the discussion of the failed £emy deal:

"I would not want to criticise the passion QPR owner Tony Fernandes has, he is very communicative and has a flair and understanding of what the fans want and what he wants for the good of the club. ... They played down Chris Samba, but if we were in a similar position? ... If Mike and I were in that position we may sit back and say: 'Do we need two players to push us away from relegation?' We might have taken the gamble too, but not irresponsibly. Tony is not being irresponsible. He is giving himself and his club a chance. If he did not do anything then he would be criticised too."

Aw, c'mon - give 'im both barrels. Quite how signing a player for £12m on £120,000 a week when you're bottom of the table and play in a stadium with a capacity of around 18,000 isn't irresponsible I'm not sure - and neither am I certain how a prophet of stability and financial prudence like Llambiarse can apparently condone it. That said, do I detect a subtle dig at Fernandes in the comment about him being "very communicative"? Better that Jabba stays quiet, using Llambiarse as his mouthpiece only occasionally, than he blabbers on incessantly on Twitter like Fernandes...

Go compare

The results of this year's Price of Football survey, carried out by the BBC, are in - and there's some good PR for us. On the assumption that a matchday involves the purchase of a walk-up ticket, a programme, a pie and a cup of tea, Newcastle offer the cheapest day out of any club in the Premier League, the combined cost coming to just £23. It won't come as much surprise to learn that the matchday experience is most expensive at Chelsea, £49.60, but it is notable that it's nearly twice as much (£45) for newly promoted Reading at the Madejski as it is at St James' Park.

What's more, we offer a cheaper day out than all but four Championship clubs (discounting Cardiff and Derby, who have so-called "dynamic" ticket pricing), all but three League 1 clubs and all but nine League 2 clubs. Quite remarkable. (Of course, it's worth suggesting that the matchday experience of many supporters would be more accurately reflected if the liquid refreshment was lager rather than tea...)

We don't fare quite so well when it comes to comparing prices of the cheapest season tickets, but at £322 ours is still the third lowest in the Premier League. Wigan's is £255 (and yet still no one goes), while champions Man City can boldly boast the next cheapest at £275. By contrast, the cheapest season ticket available at the Emirates is a staggering £985 - £76 more than our most expensive. Little wonder that Arsenal are one of the few clubs in the Premier League who continually make a profit.

Again, this makes us cheaper than 14 Championship clubs (including the Smogs), five League 1 clubs and three League 2 clubs (one of whom, Rotherham, are like the Gunners no doubt keen to recoup the cost of their spanking new stadium).

The headline findings are detailed here, with the full figures here and an explanation of the background to the survey here.

Jabba's Rangers rescue

So, what to make of Jabba's reported investment in Rangers? It's too soon to comment at length, but perhaps a few initial thoughts might be justified.

On the one hand, he deserves great credit for the way he's reversed and rectified decades of financial mismanagement, and what he does with his money is his own business. On the other hand, that doesn't stop me from feeling unhappy at our owner helping to prop up a club who find themselves in dire straits through their own shameful misconduct.

There's no direct conflict of interest in that the two clubs are in different leagues and the possibility of them meeting in European competition looks remote, at least for the next two or three seasons. However, Jabba's interest in Rangers does become an issue if it starts to interfere with his day job at the helm of Newcastle - and, given the conspicuous absence of notable arrivals over the course of the summer, it might be suggested that he should be devoting all of his energies to our cause rather than allowing himself to be diverted to that of another club.

Add to that the fact that there's talk of Rangers borrowing up to nine of our players. What purpose would be served by sending our youngsters to play in the fourth tier of Scottish football? While the benefits to Rangers are obvious, they certainly aren't so to us. Unless, perhaps, the arrangement hints at plans to establish Rangers as a feeder club. The issue has been raised in connection to the Pozzos' recent takeover of Watford - new manager Gianfranco Zola denied that was the intention, though the Hornets then borrowed no fewer than five players from the Pozzos' Italian and Spanish sides Udinese and Granada respectively. I can imagine how Rangers fans might feel about the prospect of being nothing more than a breeding ground for talent which we then hoover up (or a dumping ground for our development squad) - and I doubt many of our fans would be too comfortable with it either.

View From The Home End: summer SWOT analysis

(Image courtesy of cali.org)

So, Paul's taken stock of the season just finished - now thoughts are necessarily turning to the summer ahead, and to the new campaign beyond that. Given that we find ourselves in the strange position of supporting a club increasingly widely hailed as a shining example of prudent (financial) management, it's perhaps an opportune moment to carry out a SWOT analysis to assess exactly where we're at. Here's how that wonderful oracle Wikipedia defines the method:

• Strengths: characteristics of the business, or project team that give it an advantage over others
• Weaknesses (or Limitations): are characteristics that place the team at a disadvantage relative to others
• Opportunities: external chances to improve performance (e.g. make greater profits) in the environment
• Threats: external elements in the environment that could cause trouble for the business or project

So, my aim is to identify a few key issues and attempt to classify them according to the above four categories (though some issues will inevitably refuse to be pigeonholed in just one) - of course, feel free to debate the issues themselves or my classification of them in the comments box, or add anything obvious I've overlooked.

Strengths

Firm foundations
This is equally true of the playing staff and of the business. As last season proved, we have a strong first team that can compete with and defeat the best, and some useful fringe players to step in and do a job where required. Off the pitch, our financial house is now very much in order - something for which even the most fervent Jabbaphobe must give our owner credit. In both respects we're in a prime position to capitalise and build on an unexpectedly successful campaign (the summer won't be swallowed up with torment, turmoil and soul-searching this year, for sure), and it's now down to the quality of Jabba and Llambiarse's decision making and in particular how much weight they choose to give to ambition relative to caution.

Transfer and contract policy
Much of our success has (rightly) been attributed to our transfer policy: essentially, sell star players at a premium (if possible) and bring in younger, superior replacements for lower fees and on lower salaries. It was this policy that saw the likes of Kevin Nolan, ASBO and Jose Enrique packed off down the A1 and Dreamboat, Demba Ba, Papiss Cisse and Davide Santon recruited in their stead. Our scouting network, headed up by Graham Carr, is no doubt now the envy of most Premier League clubs, and we've developed a strategy of moving swiftly, decisively and often under the radar of both rival clubs and the media when it comes to signing players - Cisse being a case in point. The summer recruitment drive, which has already begun with the arrivals of both Romain Amalfitano and Lubomir Satka, promises to be fruitful - and is very unlikely to result in us being saddled with past-it, benchwarming cash drains like Sol Campbell.

Attractiveness
We're an increasingly attractive proposition for potential new signings, able to offer the promise of Europa League football as well as the very real prospect of going one competition better for 2013/4 (and maybe even a domestic cup of some sort) next season. Players of the calibre of HBA, Dreamboat, Cisse and Ba were enticed to Tyneside by little more than a vision, and now that that vision is taking shape there's cause to be optimistic that we can compete for some of Europe's best. The club seems to have grasped the concept of making players feel welcome - even if this is merely a matter of holding international days at the training ground and serving up goat curry - and it's notable how often personal recommendations of the club by current players now seem to be a factor in our transfer dealings. Here's hoping Dreamboat can give the hard sell to his France and former Lille teammate Mathieu Debuchy, and that Tim Krul has a word in Luuk de Jong's ear during Euro 2012.

Weaknesses

Transfer and contract policy
First, our whole transfer model is predicated upon the ability of Carr and his team to unearth quality cheaply, and they've by and large worked miracles so far - but (and perhaps this is the pessimist in me) you have to wonder how much longer can they continue to pull rabbits out of hats? (And, as Paul suggested, not all the rabbits they've pulled out have been quite as remarkable as Cisse or Mr T - Sylvain Marveaux, Obertan Kenobi, Dan Gosling and Mehdi Abeid are all yet to truly impress or even make much of an impact at all.) Second, our relatively modest means coupled with a rigid wage structure (both of which have been made transparently obvious to all around) mean we'll inevitably miss out on the services of desirable players, either because we're outbid for them or because they know they can earn themselves a bigger paypacket elsewhere. And finally, Jabba's determination to play hardball in contract negotiations with current staff could well result in the departure of a dependable first-teamer, Danny Simpson, leaving us even shorter in a position in which we already needed to strengthen.


Integration of youth/academy players
Paul was right to identify this as an area of concern. Krul, Saylor, Big Lad and Rocky have graduated from the youth set-up to the first team in recent years, but we just don't have the same track record as (say) Man Utd, Arsenal or even the Smogs of regenerating from within. It's a problem that needs to be addressed if we're to become a more self-sustainable operation and if cherrypicking young talent from around Europe like Satka isn't to be a pointless exercise. Shane Ferguson, Haris Vuckic and Little Big Lad all showed fleeting glimpses of promise last season, but next season is high time they - and the likes of Michael Richardson, James Tavernier and Abeid - all stepped up to the plate.

Unrealistic expectations
I'm loath to include this, given all the (generally misplaced) accusations of being wildly unrealistic that us Newcastle fans have had to endure over the years. However, for once we have reason for real optimism so there's a danger that even the most characteristically downbeat supporter might start to get carried away with thoughts of Champions League qualification and title challenges. Such expectation levels could potentially create unrest, internal divisions and unnecessary pressure if our summer activities in the transfer market are deemed unsatisfactory or if the team makes a slow start to the new campaign. It's notable, then, that the Silver Fox is ahead of the game, seeking to dampen hopes before thoughts have even fully turned to the season to come.

Opportunities

Europe
I don't know about you, but it irritates me no end when European qualification is talked up as a prized target and yet bemoaned as a burden by the manager as soon as it's been achieved. Let's look at the positives instead: in addition to making us more attractive to transfer targets, our participation in the Europa League presents us with the chance to have a tilt at a fourth trophy and (if the Silver Fox feels it's appropriate) to give fringe players some game time while also blooding youngsters, something I've identified as key above. Most importantly, however, given it's been argued that our prospective development and progress is dependent upon revenue growth, European football will mean more money flowing through turnstiles and greater income from televised fixtures.

Stadium naming rights
Removing the St James' Park signage and inviting corporations to rebrand our ground was a flagrant bid to boost the cash coming into our coffers. The summer is make-or-break for what remains an incredibly unpopular decision - the close season presents the ideal time and opportunity for Jabba, Llambiarse and assorted club suits to pursue and secure a wadge of wonga in return for naming rights. If they can't strike a financially palatable deal in the circumstances - with the club upwardly mobile and once again on the global stage - then the scheme should just be unceremoniously abandoned.

Threats

The circling vultures
Our finances being in rude good health, there's no accountant-prompted imperative to sell players. However, as Jabba has made clear, everyone is expendable given the right price. We're arguably most at risk of losing Mr T, with both Man Utd and Chelsea among those rumoured to be sniffing around him, while all and sundry are well aware of the fee required to trigger Demba Ba's release clause, thanks to West Ham's gobshite chairman David Sullivan. Just as our recruitment drive may be hit by a refusal to fork out a fortune in wages, current members of the squad might be tempted to jump ship if sufficiently sizeable salaries are waved under their noses. However, perhaps we should actually just accept and even celebrate the fact that we now have the ethos of a stereotypical selling club; perhaps we should classify the presence of lurking poachers as an opportunity rather than a threat. After all, as suggested above, that ethos has borne considerable fruit over the last two years and could well continue to do so as long as fees received are reinvested shrewdly.

Euro 2012
This summer's imminent international tournament is very much a double-edged sword - just one that cuts us both ways. Not only will it mean greater exposure for some of our star performers (Dreamboat and HBA in particular, but perhaps Krul too), and therefore increased predatory interest in their acquisition; it will also almost inevitably result in long-term targets like Debuchy coming to wider attention, pushing up prices and alerting those with deeper pockets.


Olympics, Europe and African Cup of Nations
OK, so here comes the complaint I was trying to avoid earlier: our current squad might well struggle to cope with the demands of three domestic competitions plus the Europa League. Factor in the facts that some of our key players are still to face the rigours of Euro 2012 before getting a well-deserved breather, and that Cisse and Ba could yet be pressed into action for Senegal in the Olympics before both accompanying Mr T to the African Cup of Nations in January, and we start to look somewhat stretched. That deficiency will be offset if we can get the most out of our fringe and youth players. However, with the full-back positions not nailed down, Alan Smith and Peter Lovenkrands goners, and Danny Guthrie, Leon Best and Nile Ranger all possibly following them out of the door, reinforcements are certainly needed for us to be suitably competitive on all fronts.

The 'big boys'
As much as we'd like to think this season's fifth place was achieved purely through our own exceptional efforts, the truth is that we undoubtedly profited greatly as a consequence of the shoddy and occasionally shambolic performances turned in by Chelsea and especially Liverpool. If we're to repeat the feat next year, we certainly can't be complacent and expect either club to perform so poorly again - much-improved rivals are very much something for the objective-setters to bear in mind.

Quote of the day

"One good example of successful recovery was Newcastle United, which was relegated in 2008 to 2009 but then moved back up in 2009 to 2010. The team had a strategic recovery plan in place to secure promotion on the first attempt because it recognized the considerable challenge it would face financially without the significant influx of money from the EPL's television contracts. The team reduced operating costs while maintaining a Premier League quality squad, and implemented a marketing plan that maintained memberships, attendance, and sponsorships."

It's official: we're now being held up by academics as a shining model of how to run a successful business. The extract above is taken from a book I happen to be currently working on, Advanced Theory and Practice in Sport Marketing. While we can forgive the US-based authors for the awkward Americanisms, we should perhaps point out that the strategy described above wasn't exactly a stroke of genius - in fact, it represented a huge (albeit calculated) gamble. Still, it paid off and we're now sitting pretty as a result.

A well-run self-financing club: no longer just a pipedream

So we got the Swiss Ramble treatment this week. What are the key points to be gleaned from his characteristically insightful and thorough analysis of our finances?

* Much as we might like to moan about Jabba for his occasional crass/gross errors of judgement, we need to acknowledge his importance in effectively rescuing the club from a serious debt crisis. Not only has he propped us up with his own cash, he's also worked hard to get the club onto a financial footing firmer than the vast majority of our Premier League rivals. We're now close to breaking even - just in time to meet UEFA's new Financial Fair Play regulations.

* Incredibly, we topped the Premier League profit table for 2011, ahead even of Man Utd. Of course, that was partly due to the £35m sale of Rocky to Liverpool, but that remains a huge improvement on the losses we had been posting.

* This profit has been achieved partly by virtue of being the club with the lowest net spend of anyone except Arsenal. Big-name players have been sold for big money, but their replacements have been sourced cheaply and - in many cases - have proven to be as good if not better. As we've said before, though, the continued success of this policy hinges on the work of Graham Carr and our scouting network - but if we can keep turning up rough diamonds on the cheap, then our financial position will only improve.

* We've also made great strides in reducing our wages to turnover ratio, down to a very healthy 61% from the dangerously unsustainable 91% we had in the Championship. That latter figure was partly due to the inevitable drop in revenue, but partly also because we retained several of our high earners - Jabba took a gamble on instant promotion and it paid off, but if it hadn't the consequences are unimaginable. Based on the 2011 accounts we're now 13th in the wages table, so our current Premier League position of sixth represents considerable overachievement.

* We're reaping the rewards of once again being popular, "facility fees" from our televised matches helping to boost revenue. Currently we're in the middle of a six-game streak of gogglebox games. (That said, though the fees were of course lower, we still featured on TV a disproportionate number of times during our season in the second tier - much to the irritation of some other clubs who felt, rightly, that the extra cash we earned was unfair.)

* The one real area for improvement is in growing revenue - we stand some distance behind the top six (or, as we should call them, the top five plus Liverpool...) and real progress is now dependent upon swelling the coffers further. Hence Jabba's determination to press ahead with the unpopular decision to offer the stadium naming rights for sale - though, as is pointed out, this is yet to make any money for anyone except Jabba (through increased exposure for the Sports Direct name) and neither is it likely to, with potential sponsors all too aware of the ill-feeling towards the move on Tyneside.

So the final prognosis is very positive indeed: "For so long the poster boy of inept mismanagement, Newcastle United are now a great example of how you don’t have to break the bank to be successful." Never thought you'd read that from an independent analyst, did you?

Virgin ours for £20 million

Confirmation from the club ahead of last night's game that Northern Rock have been replaced as shirt sponsor by Virgin Money, with immediate effect.

Having taken over the bank, Richard Branson's financial firm has now taken on the sponsorship of the club's shirts, not just for the remainder of the year but for a further two seasons, in a deal which could apparantly be worth up to £20 million for the club.

No mention anywhere about a deal to rebrand St James' Park again, so presumably that's still up for grabs. Although given Virgin Money's chief executive's thoughts on the subject, presumably we won't be playing games at the Virgin Money Arena anytime soon.

Name changer

OK, quick quiz question: who plays their football at the King Power Stadium? (Answer at the bottom of the page.)

Stadium naming is an emotive issue - rebranding something which is synonymous with a club is a difficult task, one which clubs typically tread very carefully around, for fear that they will upset a vast swathe of their fans. Can you imagine the furore if players walked past a sign as they headed for the pitch against Liverpool which instead of saying "This is Anfield" said "This is the [Your name here] Arena"? There's no history there. No soul. No inspiration for the home team or fear for the away team. It just doesn't work.

Until today, the only stadia for which naming rights have so far been granted are those which have recently been built such as the Emirates, the Etihad, the Reebok - all Premier League grounds, all relatively new replacements for antiquated parts of the club's history reflecting the commercial reality of the new chapter in the club's life.

Not for our club, however, where once the club played at St James' Park, officially at least our club will now play its home games at the Sports Direct Arena in a bid to showcase to potential sponsors the kind of profile they can get by sponsoring our ground. Presumably Sports Direct won't be paying for this, though, what with Jabba owning that particular brand (which as a result of this announcement gets a nice bit of free publicity in the run up to Christmas).

We all knew that the good run had to end a some point. It was simply too much to hope that Jabba and Llambiarse had learnt their lessons, that we could all pull together and as a consequence see great things happen. Initiatives to draw fans back to St James' Park (such as cheap season tickets for mates of existing season ticket holders) were working. As a club, while we as fans hadn't forgotten the sins of the past, we were at least moving forward together. Then this bombshell is dropped.

Evidently though, Jabba doesn't care. Llambiarse doesn't care. If they think they can screw a bit more money out of a sponsor (and Jabba can garner a bucketload of free advertising for his own shitty company in the meantime), then the fans, the history, it can all be ignored.

The question is, will it change?

For fans, it will always be St James' Park, in much the same way as the majority still refer to the Leazes and Gallowgate Ends despite the fact that both were renamed years ago. It will be interesting to see how the mainstream media react - will they stick with St James' Park (as they did when Jabba tried the whole SportsDirect.com @ St James' Park rebrand a couple of years ago), or will they be compelled to start referring to the Sports Direct Arena in match reports etc?Hopefully, the groundswell of public opinion will be such that this latest attempt to sell off the soul of our club will die away (and, having just paid for new signage on the East Stand, will a further sign be going up anytime soon I wonder?).

Am I surprised that Jabba has tried again to rebrand our ground? No. Do I think it's disgraceful? Of course. Will I use the new name? Will I fuck. Will anyone else? Who knows?

It's the last question that Jabba is pinning his hopes upon, in his bid to increase income streams. Llambiarse reckons it could be worth £8-10 million per year. If that helps the team grow, I suppose I should grudgingly welcome it, but as with the sale of Rocky I suspect we won't see any of the money being spent on headline sums to strengthen the team, rather it represents a means of improving our balance sheet and thereby making us more attractive when Jabba comes to sell. (I suppose we should at least be grateful we've not followed Wigan's lead and tried to call it the MA Arena.)

In the meantime, once the outrage has subsided, it will be interesting to see what if there are any takers and whether anything actually changes. I hope that the answer will be "no".

Quiz answer: Leicester City, whose relatively new stadium was previously named after local crisp maker Walkers, but which has changed its name in line with their new Thai owners' principal brand (spot a theme?). Locally, of course, it's still known as the Walkers, which rather proves the point that original names stick, whatever signage you put above the door.

Balancing act

According to comments in Sunday's programme, the club are reportedly on course to break even this financial year. Significantly, this break-even point is to be reached before player sales are taken into account.

Having previously generated losses in the region of £35 million for the financial years 2008-09 and 2009-10, reports suggest that in 2010-11 our loss has come down to below £5 million and that we hope to turn the corner this year.

Bearing in mind that those figures tally in with the relegation season (that'll be wages to Little Saint Mick, Captain Pasty, etc.), the Championship season (that'll be the loss of TV revenue) and last season (that'll be wages for the likes of ASBO, Kevin Nolan and Jose Enrique) it represents the fruition of our careful (some might say tight-fisted) approach to running the club.

To be fair to Jabba and Llambiarse, while in playing terms they have continually followed each good decision with a howlingly bad one, off the field their understanding of the need to balance the books and clear the mess which they inherited from Fat Fred and Dirty Doug is finally bearing fruit, which is commendable.

The impact of our breaking even appears extensive. Firstly it ensures we're in line to meet all the FIFA Fair Play requirements when they kick in. Secondly it means that money generated from player sales should no longer be required to service debts but instead can be used to strengthen the playing squad and improve facilities. But thirdly (and perhaps most significantly) it also makes us a far more attractive prospect to investors seeking to take the club off Jabba's hands (assuming he's still interested in selling).

The one caveat to all this is that the club is presumably still carrying the interest-free loans which Jabba has provided and which he will presumably, at some stage, want repaying. However, at least we are presumably clearing other debts (e.g. any outstanding bank loans) and as such we look to be moving in the right direction.

Financially, if we can continue to operate in this manner then in the medium term we should hopefully see an upturn in fortunes, as without massive debts to service we will get to a stage where money spent in the club shop, on season tickets, etc. actually has a bearing on our player recruitment and hopefully our fortunes on the pitch. The optimist in me is terribly excited by this.

Jabba and Llambiarse may still have big question marks hanging over them (and the broken promises of a additional striker in the summer illustrates why that is the case) but at least their tight hold on the purse strings appears to be paying some dividends (figuratively speaking), and for that credit where it is due.

The true cost of free transfers

So, according to Llambiarse, there's no such thing as a free transfer: "We have acted early and we have got the players we wanted, but none of them have been cheap. We have paid good prices for them. They certainly weren’t free transfers, there are fees and wages to consider". OK, but haven't we lightened the wage bill by shipping out Rocky and Kevin Nolan too? If you're going to take account of the wages of incoming players, Del Boy, then you need to do likewise for those who've left - which means we should have had more than the £39m in combined transfer fees to play with.

Speaking to the Torygraph, Llambiarse reiterated the point that "not a single penny of the £35 million has left the club and neither will it" - which, of course, isn't the same as saying every penny will be spent on reinvestment in the squad, as Alan Pardew was promised. Llambiarse also suggested that the hierarchy are keen to hold back some funds in reserve: "If we spent all the money on players this summer, what are we going to do in January if we need to bring somebody else in? We are using the money sensibly". Fine in principle - but what's in question is the exact amount being held back...

Pardew, for his part, now appears to be singing from the same hymn sheet as the MD: "When you sign someone like Demba Ba and Marveaux there are huge fees in there. Lots of money in those deals doesn’t come back into the system. It goes out through agents. We have spent a fair amount on those players, more than fans realise. If you add up the money and think we have not spent the 35 million you will be way off. I have to mark the cards of the fans on that one". It's never entirely clear with Pardew whether he backtracks because he's just been spouting off fan-pacifying guff he knew was untrue at the time, or because he did genuinely believe it, has discovered he's been misled by Jabba and Llambiarse and is now having to toe the party line. Answers on a postcard.

Mind the (pay) gap

Wonder whether Jabba's a regular reader of the BBC's website? Their Business Editor Robert Peston's opinion piece on the results of Deloitte's review of football finances for the 2009/10 season makes for very interesting reading, and contains some sage advice: "Disproportionately low spending on players' wages is probably not a sustainable strategy ... There is a clear correlation between survival in the top rank and a willingness and ability to pay those humungous players' salaries."

As we've said before, Jabba's stubborn determination to drive down the wage bill (and rein in transfer expenditure) is laudable in that it indicates a mature and responsible acknowledgement that clubs need to live within their means rather than blithely continue frittering away money unsustainably. After decades of financial risk-taking, it's remarkable that we appear to be taking a lead and trying to set an example while others go on overstretching themselves (although, of course, internationally imposed financial regulations are going to enforce this in due course anyway).

But, as Peston suggests, the danger of this is that clubs become so hell-bent on frugality that they cut off their noses to spite their faces - unwilling to pay big wages, so unable to attract (or retain) the players who have the quality to ensure avoidance of the financial meltdown that accompanies relegation. Jabba's apparent desire to ship out senior high-earning members of the squad - ASBO, Kevin Nolan, Alan Smith - may not be exclusively motivated by economic factors but those are the terms in which the refusal to meet contract demands is being couched. With a large, loyal fanbase and significant annual turnover we're surely in a better position than many of our Premier League rivals to afford the fees and wages demanded by some of the bigger-name stars?

As I said when looking forward to the next campaign recently, it all comes down to a question of ambition, really. As unexciting as it might seem, personally I'd probably be content with another season of comfort and consolidation, and another mid-table finish - too many newly promoted sides, buoyed by finishing well clear of relegation, then get grand ideas, overstretch themselves and crash back down into the second tier in disarray. But even realising that relatively modest ambition that will demand investment, and Jabba should heed Peston's warning: generally speaking, clubs get what they pay for.

Health club

The Guardian's David Conn's done his doctorly duties, taking our pulse and asking us to stick out our tongue and say "Ah", and pronounced us to be in rude good health - at least in terms of money, and in relation to our top-flight rivals. How novel to be able to say that.

Of course, it could have been so different if our gamble on retaining some of our high wage-earners in the Championship hadn't paid off with an immediate return to the Premier League - but it did, and in most other financial respects Jabba's shown himself to be prudent and risk-averse. Conn points to his interest-free loans to the club as key in helping to stabilise our finances, while the situation can only have improved since the period from which the figures come - we once again have a Premier League club's income and with a lower wage bill than 2008/9, and we've banked £35m from the sale of Rocky.

Again, then, we're confronted with that dichotomy: Jabba's commendable if not universally acknowledged efforts in getting the club on the financial straight and narrow on the one hand, and his deplorable decision-making in pretty much every other respect on the other. The question now is whether he'll be prepared to loosen the purse-strings slightly over the summer, or whether he'll remain overly parsimonious and run the risk of relegation which would be damaging to both the short- and long-term health of the club.

Smoke and mirrors

His face smeared with egg, duped former Notts County executive chairman and owner Peter Trembling responded to Monday night's edition of Panorama to claim that we may have dodged a bullet.

The programme investigated the 2009 takeover of the other Magpies by the shady Qadbak and their subsidiary Munto Finance, implicating convicted fraudster Russell King in the running of the club and underlining how all the too-good-to-be-true promises of oodles of cash that rendered deluded County supporters giddy and irrational proved to be just that.

But, according to Trembling, their sights were initially set higher than a League Two club: "They had tried to buy Newcastle United. I told them they were better off going for a smaller club and building it up. At one stage, they were looking at all sorts of clubs. Liverpool was on the radar. Then they said they had the money to buy Notts County."

Sven-Goran Eriksson, Kaspar Schmeichel and a certain Sol Campbell were all improbably lured to Meadow Lane, but it all collapsed leaving the club £7m in the red and in serious danger of extinction. Presumably Munto Finance's sales pitch to the Supporters Trust, from whom they bought the club, was: "Why not let us consolidate all your existing debt into one much bigger debt and then fuck off, unpaid bills flapping in the breeze?" That the owners were somehow able to pass the Football League's "fit and proper persons" test speaks volumes about its stringency and rigour - as Ian King has pointed out on the ever-superb Twohundredpercent.

Anyway, the point is that perhaps we shouldn't scoff at the gullibility of Trembling and the County faithful, and instead reflect on what might have been for us. Gripe all you want about Jabba, but in this instance it's a case of better the devil you know.

The full cost of relegation

The full cost of relegation has finally come to light after the publication of the club's accounts (well technically those for Newcastle United Ltd) for the season 2009-10.

Turnover fell by 39% from season 2008-09, down to £52.4 million. This fall was a result of the significant drop off in TV and media revenue, corporate hospitality, season ticket sales and commercial, catering and sponsorship revenue.

Interestingly though, there was a spike in gate receipts - as we recorded the fourth highest average annual attendance in England, despite being in the second tier.

While the wage bill was cut by 24% (largely through sales of high earners such as Obafemi Martins and Damien Duff), wages as a percentage of turnover rose 8% to a staggering 90.6%.

Hopefully this season, with significantly increased TV revenue, that percentage is rapidly on its way back down to a more manageable level.

What the figures also reveal is our indebtedness to Jabba, who continued to bankroll the club through interest-free loans.

The club, naturally, have sought to highlight this in a "Look at us, aren't we being the good guys here, you should be eternally grateful" kind of way while neglecting to add "Of course, we're in this position because we bought the club without carrying out due diligence and we got relegated because of the succession of terrible decisions we made in the boardroom"...

While it's true we do owe them some gratitude (because if Fat Fred had remained, I'm pretty certain we'd be in a Portsmouth-esque financial mess), they nonetheless need to remember that a lot of what has happened since Jabba bought the club has been of his own making.