Get the latest NUFC transfer and takeover news straight to your inbox for FREE by signing up to our newsletter Subscribe Thank you for subscribing We have more newsletters Show me See our privacy notice Invalid Email

Newcastle United have filed their accounts for the 2015/16 campaign - and the club recorded a profit for the sixth consecutive year, even if it did reduce significantly.

However, those accounts have come alongside a stark warning from managing director Lee Charnley about the club’s future, given that they do not yet highlight the significant financial impact brought about by relegation last season.

So what exactly do the accounts to the year ending June 30, 2016, show?

Here, NUFC Writer Chris Waugh runs you through a Q&A of the essential points...

What time period do the accounts reflect?

These accounts are for the year ending June 30, 2016. That means they represent the season BEFORE Newcastle’s relegation . That’s why the figures are not yet as devastating as Charnley forecasts they will become. We’ll see that reflected in 12 months’ time in the next accounts (which will be to the year ending June 30, 2017).

But these aren’t the full figures - so when will the full accounts be out?

The club has filed their accounts, but they are yet to be realised in full. As of yet the club has only released specific information - we are yet to find out about revenues, the specific wage bill and specific pay-offs. Hopefully we’ll see the rest within the week because they’re usually released five days after they’ve been filed. That will then give us a far broader picture of the financial landscape at St James’ Park .

Well, the club still made money? That’s positive, right?

Even before relegation, United’s turnover and profit had dropped year on year - most starkly the latter - but the club did still make money. The club’s turnover fell by three per cent from £125.8million to £129.7m - primarily down to a £4.5m drop in media income - while operating profit was almost 20 times smaller than the previous year at £0.9m (down from £19.1m). The club’s interest-free loan to owner Mike Ashley remains unchanged at £129m, though again that will increase next year after a further £33m injection in December. Yet the fact is that United still did make money last year, albeit less than £1m. But we can almost certainly expect a loss in next year’s accounts...

United splashed the cash last year - it really wasn’t worth it, was it?

It’s true that Newcastle did significantly increase their total net cash spend on players, forking out a combined £70.7m to bring Georginio Wijnaldum, Aleksandar Mitrovic , Florian Thauvin, Chancel Mbemba, Jonjo Shelvey , Andros Townsend and Henri Saivet to the club. But the accounts also illustrate how little investment had been made in the squad the previous year, with only a £23.8m net cash outlay in 2015, suggesting a long-term under-spend in the playing squad. What’s more, the wages-to-turnover ratio also increased from 50.1 per cent to 59.4 per cent, reflecting the inflated salaries of the recruits. Given the fact that higher-paid players delivered a lower-league finish and an ultimate relegation, it wasn’t value for money at all, no. However, that ratio is still a comparatively healthy one.

Charnley’s quotes are pretty stark - will next year’s accounts really be that depressing?

In a word: yes. Charnley stresses that the “financial impact of relegation is difficult to overstate” and confirms fans’ worst fears that demotion has heavily impacting on their spending power.

But why? Does it really make that much of a difference being in the Championship to the Premier League?

It most certainly does - and this year more than ever. Charnley highlights the fact that United recouped £12m in revenue from 16 live TV games in the Premier League last season, whereas they have received just £720k from 18 matches in the Championship this term. What’s more, the club who finish 18th in the Premier League this season will get £30m more than United did last season. It has never been more lucrative to be a top-flight side - primarily due to the exorbitant TV revenues - and United have missed out on year of Premier League riches. They’ll have some serious catching up to do, as next year’s accounts will show.

But they get parachute payments, right?

They do. The precise figure will only be determined come the end of the season - it is 55 per cent of an equal share of domestic top-flight money plus an equal share of overseas money for top-flight clubs - but it is likely to be around the £40m mark for 2016/17. Should United secure promotion in the coming weeks, then it is only that first year of parachute payments which is relevant to them. Considering the bottom side in this season’s Premier League are expected to earn more than £100m though, Newcastle’s £40m parachute payment is little consolation...

“Relegation unacceptable and unexpected”

“In the context of this spend, relegation was both unacceptable and totally unexpected,” Charnley stresses on the NUFC website . Nothing more really needs to be said on this point. He’s right - demotion was both of those things.

So Newcastle really do need Mike Ashley then?

Essentially, in their current financial state, yes. Charnley stresses repeatedly that the reason United are able to keep Rafa Benitez on a £5m-a-year contract, and why the club have been able to finance a promotion push this season, is by Ashley’s continued backing. The Sports Direct magnate has been extremely controversial during his almost-10-year ownership of the club but, as he himself stressed last year, he is “wedded” to the very future of the football club. The new £33m loan Ashley injected into the club this season - £18m of which was used to repay himself from the outstanding personal loan, £15m of which provided “essential funds for operating activities - has allowed the club to continue operating day to day as it does now (that new loan will be in next year’s accounts though as it is from December 2016). Ashley was reluctant to spend in January, and Charnley’s stark warning helps us to understand why, but his money is allowing the club to fight for promotion.

But the club made more-than-£30m net profit in player sales last summer, right?

True, they did, but Charnley also clarifies this. The managing director stresses that “due to the cash profiles of those deals, this will result in a net cash outlay in 2016/17”. Essentially, some of those sales - like the £30m transfer of Moussa Sissoko to Tottenham Hotspur - are staggered over time, so United did not receive all of the money in a lump sum last summer.

How much was Steve McClaren given in a pay-off then?

We should find out in the full accounts, but as of yet McClaren and his backroom staffs’ pay-offs have not been released. It is confirmed that “the change in first-team management personnel” did impact on the club’s finances, however.

Could a new sponsor bring with them a much-needed cash injection?

Let’s hope so. We know Newcastle are in negotiations with Far-East companies, as well as some based in the UK, for a headline sponsor to replace Wonga on the shirts for next season. United’s negotiating position will hopefully be strengthened by the fact they look likely to go up this season - and that might bring some much-needed additional money into the coffers.

Is promotion essential, then?

Yes, 100 per cent. If United fail to clinch promotion, Benitez will leave and the club will have to slash their day-to-day running costs, as well as their wage bill. Promotion will bring a guaranteed £100m-plus next season. United desperately need it, as Charnley stresses.