Revamping the Newcastle United Football Club's Performance

The assignment discusses the financial performance of Newcastle United Football Club (NUFC) and provides recommendations to improve its profitability. The club's revenue has decreased due to poor team performance, relegation, and lower ticket sales. To address these issues, the management should focus on increasing revenue through sponsorships and commercial catering. They can also reduce costs by recruiting young players at a low cost and retaining them with additional perks. The coach, Rafael Benitez, should utilize the talent of young players to win more matches and retain the club's position in the Premier League. Additionally, the club should emphasize internal efficiency and analyze its financial perspective authentically.

Table of Contents
Problem/ opportunity statement pertaining to the performance of Newcastle United FC...................2
Theoretical structure to associate the statement of the problem with data analytics/ business
intelligence method...............................................................................................................................3
Key data analytics system/ business analytics.......................................................................................4
Critical analysis of the club’s performance............................................................................................5
Recommendation for fruitful execution of data analytics/ business intelligence method in Newcastle
United FC...............................................................................................................................................5
References:............................................................................................................................................6

Problem/ opportunity statement pertaining to the performance of
Newcastle United FC
Newcastle United FC is an English football club placed in the city of Newcastle upon Tyne
also known as Newcastle. This football club is an active participant of English Premier
League, which holds the apex rank in English football fraternity. Mike Ashley is the owner of
the club since the year 2007, by taking it over from Sir John Hall, owner and the chairman of
the club (Alexander and Kern, 2014). This football club is the 17th highest revenue generating
club around the globe with respect to annual revenue as it earned €169.3m in the year 2015.
Considering the historical figures, this club had its best placing back in 1999 when it stood at
the fifth position with respect to earning revenues among the football clubs, and second only
to Manchester United among the English football clubs. The club has been into some notable
achievements after its inception but which had somewhat faded away but in spite of that, it
has won a couple of titles in the 20th century. If the current situation of the company is taken

into account, the overall turnover of the club is not showcasing a good increase considering
the financial statement of the last five years. Therefore the profit has also been low due to
high level of cost of operation (Phillips and Krasner, 2016). It is difficult for the management
to control the expenditure on the salaries, wages, amortisation and cost of security of the
players which is resulting into less profit on operation. Inadequate amount of revenue that
was generating out of the tickets sold on match days which is almost static since the year
2012 (Amir and Livne, 2015). The performance of the football team in the Premier League is
also not satisfactory if the last few years are being taken into account. Such a performance
has resulted in the team’s relegation in 2015-16 season. As a result, the fans were upset and
they are no more interested to buy season tickets. There has not been any increases in match
day ticket sales also, which is resulting in a reduced volume of revenue. However, the
revenue pertaining to media and commercial services has enhanced that resulted in an overall
augmentation in revenue. But yet the management is required to put more emphasis on the
team performance on field and that way the sale of tickets will subsequently increase (Bell,
et. al., 2017).
Theoretical structure to associate the statement of the problem with
data analytics/ business intelligence method
Various organisations use different assumptions or theories in accordance with problem that
they are dealing with to find a way to address their performance. The club management is
required to execute brainstorming session on perspectives of costs of operation and accelerate
the turnover to move in the better margin of operation (Ryder, 2016). The theories on
management performance will help the club to materialise their business into action. If the
basic doctrine management performance is to assist the business organisation triggering their
performance with respect to operating cost and revenues (Dobson and Goddard, 2016). It also
goes in relation to enhancing the value of shareholder by executing a connecting strategy to
implement and plan with the help of key techniques of setting up goals, and work on
forecasting, modelling, financial reporting, planning and close management (NUFC, 2017).
The most effective management performance tool in operation is Balanced Scorecard of
Norton and Kaplan. The four contexts that are concerned with Balanced Scorecard viz.,
finance, consumer, growth and learning and business processes are being used to create
measures, objectives, requisite initiatives and targets which are interrelated. Given are the
four perspectives of BSC in brief:

1. The perspective of the customer: The value of customer satisfaction is important in
any form of business to attain success. The customers’ perspective is concerned with
the supporters who not only play a major part in generating ticket revenue but also
help in increasing their number of followers over the internet or television. Therefore,
a poor performance on the part of the management is not going to increase the sales
revenue which has not been observed in the last five years.
2. The financial context: It is predominantly aimed at identifying the financial
information or data execute the on time and authentic performance of the
organisatio0n with respect to cost of operation, profits and revenue. The
organisational position with respect to its financial health may show the performance
lagging with respect to the decisions taken in the past, but yet it is very important.
3. The context of the process of internal business: This context is related to the degree of
efficiency at which the business is proceeding. It motivates the organisations to take a
breather if the performance of the company is not up to the mark and it acts in a little
philosophical way in handling the issues of the firm.
4. The perspective concerned with growth and learning: In the world of globalisation
with rapid changes in technology, it is important for the company management to be
into incessant growth and learning form. The mangers of the firm must take into
account their player’s performance with the help of a series of performance indicators
like player attributes, training performance and match ratings on an average.
To develop a business intelligence dashboard procedure will assist in measuring, managing
and monitoring the operational performance in detail periodically. The scorecards on the
other hand are developed to keep an eye on the success and alignment strategically with
setting out targets and objectives. For the managers and accountants, these dashboards
pertaining to operation and tactics can be handy to keep a track on marketing, initiatives on
tactics and performance on sales with the help of BSC.
Key data analytics system/ business analytics
The data accumulated in order to prepare the dashboard is composed of the statement of
financial accounts of the Newcastle United FC for past five years Wilkins, D. (2018). The
report given here is on the basis of the information given on different websites. The overall
turnover of the club was increased in the year 2014 to the tune of 35% when compared to the
same figure in the year 2013 which was almost same in the year 2015 but dropped by 3% at

the end of 2016 (Miller, 2017). The cost of operation which was apparently under control in
the year 2015 at £90.1m and to the tune of £96.5m in the year 2016 as opposed to the 2014
figure of £125m. This was owing to the growing operational and staff expenditures.
Critical analysis of the club’s performance
The major issue that is concerned with the aspect of the turnover where the sales revenue on
the tickets is not satisfactory even though the revenue with respect to advertisement or media
has seen a rise (Jones, et. al., 2017). The high cost on operations and the low rate of turnover
had a serious impact upon the club considering the loss incurred in the year 2012 (£5m) and
2013(£1.7m). The club made a relatively better performance in the year 2014 with £4.8m and
a profit of £19.1m in 2015. The profit dipped sharply in the year 2016 to £0.9m. This is clear
on the part of the column of Sparkline’s which indicates the different trends of parameters of
profit. Even though the net profit (after tax) did not fall negatively considering the club was
generating profit in consultation with the club players. This put the net profits to £1.4m in
2012 and £8.8m in the year 2013.the net profit of the firm increased to a significant extent to
£18.8m in 2014 and it went further to the tune of £32.5m in the year 2015. It was due to a
balance between turnover and operating cost. But in the year 2016, the club again witnessed a
big deal of loss as the net profit was dropped to the tune of 85% to a petty £4.6m (Jones, et.
al., 2018). The board did not go for dividend payments owing to such a low volume of net
profit. This was perhaps due to the club’s relegation from English Premier League as the club
stood at 18th position. Therefore, the disappointment among the club fans caused in a
substantial fall in the sales revenue as they were not interested to buy season or match tickets
like before.
Recommendation for fruitful execution of data analytics/ business
intelligence method in Newcastle United FC
To deduce, the club management must begin in investing star players. The players are
required to be trained on the basis of the growth and learning perspective of the BSC
(Balanced Scorecard) theory. It will help boosting the overall performance of the team in
league matches thereby making the fans satisfied with their on-field performance.
Subsequently, it will help in increasing the sales revenue as more and more fans will come to
watch the club matches. It is also advised to maintain a low cost with respect to wages and
salaries so that the club can retain the maximum possible profit when the year ends.

Secondly, the firm must venture into marketing and strive hard to increase their revenues
with respect to sponsorships so that it helps in increasing the overall the turnover. They must
take into account the strategy of selling tickets at a concessional price to particular target
groups. For instance, the management can provide tickets in bulk to attract the university
students thereby increasing the number of tickets sold. Thirdly, the management should
emphasise on carrying on the internal business in a more effective and efficient manner. For
instance, they should resort to recruiting talented young players by employing the least
possible amount of money. The players should be given additional perks in order to retain
them for a longer period of time. Fourthly, the incumbent coach Rafael Benitez must utilize
the talent of young players so the club wins more and more matches and retains its position in
the Premier League. In addition to that, the financial perspective of the club should be
analysed in a more authentic way because, if the 2016 figures are considered, the overall
turnover dipped by 3% to the tune of £3.9m. The ticket revenue also had a significant fall of
£1.7m due to, as explained by the BSC method, the poor team performance and the
relegation. Therefore, for the supporting staffs and mangers engaged with the team, it is
recommended to make a detailed study of the dashboard analysis as it will enable them to
undertake an effective decision making process. They should go for increasing the revenue
via commercial catering. In this respect, they can arrange the club stadium for events like
live-in concerts at the time of off season breather. They must resort to enhancing the revenue
with respect to tickets by performing well in the league matches and applying effective
marketing strategies.
The above recommendations will certainly improvise and revamp the club performance and
make the management efficient enough to run seamlessly.
References:
Alexander, D. L, and Kern, W. (2014) The Economic Determinants of Professional Sports
Franchise Values, Journal of Sports Economics, Vol. 5, pp. 51-66.
Amir, E. and Livne, G. (2015) Accounting, valuation and duration of football player
contracts, Journal of Business Finance and Accounting, Vol. 32, pp. 549-586.

Bell, A., Brooks, C. and Markham, T. (2017) Does managerial turnover affect football club
share prices? AESTIMATIO, the IEB International Journal of Finance
Dobson, S. and Goddard, J. (2016) The Economics of Football, Ed. 2, Cambridge University
Press, Cambridge.
Jones, D., Rawnsley, P. and Switzer, A. (2018) Annual Review of Football Finance, Ed. 17,
Deloitte Sports Business Group, Manchester.
Jones, D., Rawnsley, P. and Switzer, A. (2017) Annual Review of Football Finance, Ed. 21,
Deloitte Sports Business Group, Manchester.
Miller, P. (2017) Private financing and sports franchise values: the case of major league
baseball, Journal of Sports Economics, 8, 449-467
NUFC. (2017). Club files annual accounts. Viewed on 27th December, 2018. Retrieved from
https://www.nufc.co.uk/news/latest-news/annual-accounts
NUFC. (2018). Accounts filed for year ended 30th June 2017. Viewed on 27th December,
2018. Retrieved from https://www.nufc.co.uk/news/latest-news/accounts-year-ending-30-
june-2017
Phillips, J. and Krasner, J. (2016) Professional sports: the next evolution in value creation In:
Rosner, S. and Shropshire, K. L. The Business of Sports, Ed. 2, Jones & Bartlett Learning,
Massachusetts.
Ryder, L. (2016). Newcastle United's accounts - all you need to know about the club's
financial results. Viewed on 27th December, 2018. Retrieved from
https://www.chroniclelive.co.uk/sport/football/football-news/newcastle-united-accounts-you-
need-11146268
Wilkins, D. (2018). Newcastle United total revenues for 2017/18 season – We can now
confidently estimate. Viewed on 27th December, 2018. Retrieved from
https://www.themag.co.uk/2018/05/newcastle-united-total-revenues-2017-18-season-can-
now-confidently-estimate/