I am going to use a new format from here on out. Instead of dropping one gigantic, catch-all post about a club’s financials I am going to break it down by category. After all the parts are done I’ll sew them together in a post summarizing . This will make the posts more digestible for you as well as easier for me to create since I won’t have to come up with 2000 words and 20 charts all at one time.

The 2007-2011 period is a tidy chapter in the Mike Ashley story. Six managers, a relegation and a promotion is just the beginning of the turmoil that has roiled St. James’ Park over the last five years. While 2011-12 was a notable year I feel that it represents a new arc in the Newcastle story and can be left for later…also the financials aren’t out yet so it has to be left for later.

Revenue

Newcastle’s revenues have not grown over the past five years. Total intake has remained close to the £87m it was in 2007. While end-to-end growth has been flat there has been considerable variance within the period. Revenues reached a high of £99m in 2008, a move driven solely by the growth in media revenues, and a low of £52m in 2010 as the club suffered relegation to the Championship.

Quite surprising is the drop in commercial revenue during (and after) the relegation period, at £15.4m the category dropped almost 45% from its peak and has not recovered into the 2010-11 season.

The continued and growing importance of TV monies is quite clear if we look at each category as a percentage of total revenues. Media has grown from a 30% contribution to 2007 club intake to just over 55% in 2011.

Media revenue as club lifeblood is not surprising at this point as it is a theme for all Premier League clubs and many others in the European leagues. It will be interesting to see whether there is recovery in Newcastle’s Commercial contracts and Matchday receipts for the 2011-12 season.

Looking more closely at Matchday revenues we can see the price that the club paid for underperformance and discontent with management. Poor performance in 2008-09 and relegation in the next season knocked roughly 12m off Matchday receipts. This deterioration was clearly driven by empty seats as average attendance dropped by almost 7,000 to 43,387 a match. Attendances recovered in 2011 but were still below 2009 levels as a relegation ‘hangover’ may have damped supporter enthusiasm for the new season.

Average Matchday revenue per match has tracked the attendance trend quite closely. Most notably, relegation caused Matchday receipts (does not include media) to drop by almost 40% a match!

Next time: Wages and Other Expenses