Trumpeting into Newcastle United with a rapturous fanfare came Mike Ashley, owner of Sports Direct, an English entrepreneur who was going to save our club from the impending financial meltdown caused by the previous regime.

“Newcastle attracted me because everyone in England knows that it has the best fans in football… don’t get me wrong. I did not buy Newcastle to make money. I bought Newcastle because I love football.”

sir john hallEverything seemed too good to be true, a British billionaire owner, out to enjoy football, seemingly to revive the sleeping giant that has consistently had one of the highest average attendances in world football in recent times.

From nufcblog.org, September 2011:

However, previous Newcastle United owner, Sir John Hall, gave a different, and far more convincing reason in a recent interview (August 2011) with Newcastle United website “Toon Talk“. Hall spoke of the negotiations which led to Ashley’s takeover of the club saying:

“I was told that the man behind the deal was Mike Ashley and I sat with his representatives over 3 days thrashing out a deal. I was keen to know why they wanted the club and they were quite honest. They wanted to market their sports goods in the Far East and would use the club to help do this.”

In June 2007 when Ashley gained full control of the club, debt was assumed to stand at £71m. A large sum, but not an insurmountable pile of toxic club-threatening debt. Upon gaining control, a clause in the mortgage stipulated that if the club was ever to be sold, the mortgage would have to be immediately paid in full. This would cost the new owner £53m. So what did Ashley do? He ‘invested’ £111m as an ‘interest free loan’.

A statement from Newcastle United in May 2010:

“In relation to recent media speculation following the statement made by the Club on May 9, Newcastle United would like to make it clear that owner Mike Ashley is not looking for his interest free loan to be repaid, or to take any money out of the Club.”

Interesting, yet in a question and answer session with club officials in the 2013/2014 season, the club had this to say:

“The club suggested that while it is always pro-actively looking to attract new commercial partners and to sell that advertising space, in the current climate it could not command a sum for that space anywhere close to the £129m invested into the club interest free by the owner.”

This is a direct contradiction as Ashley is profiting directly from his loan to Newcastle in the form of revenue gained by the ‘free’ advertising in the ground for Sports Direct.

What is interesting to note, is how we keep hearing from Alan Pardew how we are not able to financially compete with clubs around us, even Cardiff:

“They spent a lot of money Cardiff, they’ve got some good players and Zaha on loan from United is a threat, but we did the job.”

Or Southampton:

“You look at a club like Southampton, and they’re in a much stronger financial position than us in terms of purchasing players.”

Why is this the case? A look at the numbers will provide a sobering conclusion. Below is the revenue table for the top 14 clubs in the world as they stood in season 2006/2007, just before Mike Ashley took full control over Newcastle United.

sir john hallSo of the 14 clubs, which one has gained the least revenue in the following 6 seasons? Newcastle United. Whose fault is this? The owner. Squeezing Commercial Revenue by not taking paid advertising in the ground, then doing the same with Matchday Revenue by reducing ticket prices in a bid to placate fans by giving with one hand and taking with the other. It’s like saying ‘we could compete if we didn’t have to reduce the ticket prices so much just to keep the fans happy’ – it’s absurd.

The owner is directly responsible for the commercial fortunes of a club and the buck stops with Mike Ashley. So, after 7 years of ownership, what’s happened to the £71m debt we had before he arrived? Well, it’s not only still there, it’s increased now to £129m. This is despite astronomical increases in television prize money, an overhaul in player wages, and 7 years of Mike Ashley’s commercial expertise to work its magic on the club’s finances.

Perhaps we’ve been blessed with a billionaire owner who cares not for mere millions of pounds in fees for players and has lavished the club with star names in a bid to compete once more with the Premier League elite.

sir john hallBut that hasn’t happened either. With the debt still standing at £129m, £45m taken out of the club in net player transfer spend, the TV Prize money of each season disappearing into thin air and Sports Direct having risen in value from £1.60 per share (July 2007) to £7.89 per share (May 2014), it’s safe to say that Newcastle is run by somebody having a laugh at our expense.

28 comments
DownUnderMag
DownUnderMag

It is sad that fans are now the point of least concern for clubs, making very little impact to what the club is actually able to (or willing to) do with regards to the football on the pitch.  There is a sense of bleak hopelessness creeping into football, fans starting to tire of ever increasing ticket prices that only serve to, in most cases, perpetuate the ever increasing wages for mediocre players who have no hope of ever winning anything in their lifetime.  The pot is sewn up with the likes of Man City, Man U, Chelsea etc all buying their way to the top with finances far beyond anything a mere fan can bring in with a ticket purchase.

If those fans stopped going, would it matter beyond TV audiences probably disliking games with zero atmosphere?  It does beg the question how accurate this article will prove to be, as more and more clubs look to slash prices in an attempt to lure fans back for publicity purposes rather than footballing ones!

terriertwo
terriertwo

Go back forty years and cap the players wages. I pay good money to support my team. They turn up and do very little and go home with a sack full of gold. Pay them a basic wage with incentives and maybe then they will pull their fingers out and put a shift in.

snodgrass2
snodgrass2

Don't worry. Football is killing itself.Remember why the world wanted to tune into our game? Fast furious competitive aggressive. That's what made it a product worth having. Look at it now. Gamesmanship and foreign influx.Highlight of most games is the possession factor. 70% possession is praised even if you never left your own half! Boring games where 6' 4" players fall screaming to the floor when a mighty 5' player gets too close. Commentators encourage the myth...." Oh there was contact" when everyone can see from the second to the twelth replay there was none. Games are held up at the most crucial exciting times because of feigned injury to stop the play. The foreign influence has slowed our game to a near standstill. (Arsenal Chelsea anyone?) Look at our crowds. Where is the fervour the testoserone? Gone. Our game is dying. When Sky move on, as they surely will, we may not be able to resuscitate it    

Harry Todd
Harry Todd

Low prices try Fifty six pounds at Chelsea and Man Utd, fifty two at Liverpool and mid forties at West ham,Man City and QPR and it is quite clear that you do not attend away games.If that's cheap let me know the ideal price.

Chemical Dave
Chemical Dave

Am surprised you have time to go to away games as your medical expertise must be a drain on your free time ? You are utter scum by the way, time to change your username...again ?

1957
1957

Prices to go to the stadium will need to drop as I believe Sky are planning to negotiate a pay as you view contract with the EPL for live or slightly delayed streaming of all games in the near future.

SGM
SGM

Cheap tickets are a must, less corporate more kids.


Also: season after season the bottom of the table is far more exciting than the top.


Who cares who wins its the same old, same old.


Who's got the bollix to stave off relegation is what matters.

GToon
GToon

@SGM Aye. Can't stand the media trying to whip up a frenzy at the start of the season about who might win the league. They should literally just give it to the club with the most money. The bottom of the table is great, you are right. And we are featuring in it!!!! Also the biggest game isn't even in the EPL - its the Championship playoff final. 

Marklp
Marklp

A whole generation of Toon fans have been priced out of SJP. Cheap tickets would be an excellent way of giving the club back to these fans. Cheap tickets and a large standing areas at the bottom of leazers and gallowgate ends is the way forward.

Alexh1984
Alexh1984

I always like reading your articles and this is another good one.

All I would say is that in other countries, germany for example, the tickets are way cheaper. I think Dortmund do a season ticket for £109. The atmosphere there looks incredible though.

On that basis I think cheaper tickets are a good thing.

Where they aren't are at clubs like our own. Without a shread of ambition they are being used to fill the ground.

West ham at least show some attempt at being a football club who try to progress on the pitch and will probably spend relatively largely before they move.

There has to be a reason clubs like spurs, west ham, Liverpool are all striving to get bigger stadiums and that can only really be financial. More stadium visitors means more spend in the club shops, bars etc. more jobs created in the local area, more visitors growing the local economy and so on. All things other clubs take seriously but what won't be at NUFC as it isn't beneficial to SD