Premier football club Newcastle United has said it will tackle player wages in a bid to return to profit, after reporting losses for the last year.

Player costs rose by 20% to £32m and now represent almost half the club's turnover.

The wage bill meant the club reported a pre-tax loss of £3.1m for the 12 months to 31 July.

That was despite a tripling of operating profits which Newcastle put down to higher attendances at matches and revenue from television deals.

Chairman Freddy Shepherd said the club would concentrate on developing younger players from within its own squad to control costs.

Expensive tastes

Mr Shepherd said: "The main factor on profits for football clubs is keeping wages under control."

Football's profit league 2002

Man Utd £32.3m profit Newcastle United £3.1m loss Southampton £3.3m profit Tottenham Hotspur £0.9m profit Aston Villa £0.4m loss Celtic £2.9m loss Manchester City £13.9m loss Leeds United £28.2m loss Rangers £35.3m loss

Although the pre-tax loss was better than last year's £8.9m deficit, Mr Shepherd said the only way to return to profit would be to control costs.

"We have one of the youngest squads in the premier league....and we are focusing on our academy and the training of young players," said Mr Shepherd.

Players wages now represent 45% of the club's turnover, just below Manchester United's 48%.

Match success

On the pitch, Newcastle had a successful year, achieving its highest finishing position in the FA Premier League for five years.

It ended in fourth place allowing the club to qualify for the UEFA Champions League this season.

Mr Shepherd said: "We are now benefiting from the enormous effort put into building a strong squad at both senior and junior levels.

Turnover rose by almost a third to £70.9m thanks to strong match attendances and television fees.

But player transfer costs rose by 13% after the club signed Lauren Robert, Jermaine Jenas, Hugo Viana and Titus Bramble.