How has the Newcastle United club debt situation changed under Mike Ashley?

Before the multi millionaire (now multi billionaire!) rode into town/toon, the popular conception was that the club was massively on the slide.

mike ashleyUnder the leadership of Chairman Freddy Shepherd and biggest shareholder John Hall, shocking managerial appointments such as Graeme Souness had helped put the club in a desperate position.

Debt was rising as the club’s major shareholders and decision makers backed disastrous signings such as Boumsong, Luque and Owen, desperate to keep the fans filling the ground and United competing at the top.

(Thanks to Chris Holt for the great graphic below and you can visit his blog HERE, plus you can follow him on Twitter @MikeAshleyLies)

As you can see level of debt owed by the club has never been as high as in Mike Ashley’s time at the club, the figures taken from the official club accounts each year.

The big question for many of us is what will be revealed in the 2013/14 accounts which are due in the coming weeks, with a potential profit of around £50m thanks to the TV cash bonanza kicking in, the sale of Yohan Cabaye and no players bought.

Will Mike Ashley have reduced ‘our’ debt to him?

mike ashleyhhhh

  • nufcmag777

    In the last 4 years under Ashley we would have made approx £93.9 mill profit yet the debt never reduces.In this case where has the £93.9 mill gone?

  • vbhgft

    If often think it would be interesting to hear from the fans who drank and caroused with Mike Ashley in the days when he was a “Smith” replica shirt-wearing, pint-guzzling “man of the people”. There must be quite a few fans who spoke to him in those days, but we never hear from them.

  • RexN

    It’s an interesting  graph and it takes a moment to work out where the figures have come from in the accounts. What Shepherd did was fascinating with some of the income flows pre-committed so the question becomes what do you define as debt and what sort of funding can appear “off balance sheet”?

    What Ashley did was consolidate both short term and long term liabilities,including a bank overdraft, which was as high as £40m, into a loan from himself. Doing it that way was advantageous to Ashley in saving interest payments but the comparison of different types of debt obscures what Shepherd In doing so,Ashley created a tax efficient pot to draw on.

    The “popular conception” was in fact correct, the club as we knew it needed refinancing to avoid insolvency with the schemes proposed by Shepherd being unrealistic in the market at the time. the club was a PLC with the private finance put in by Hall arguably put at risk by Shepherd’s management, Hall taking a back seat due to his health at the time. Despite allegedly not doing “due diligence” Ashley’s advisers would have known about the true financial position, after all, Mort is a top lawyer at Freshfields.

  • wor monga

    What a surprise…another pretty chart, on here showing us….that
    Ashley has the club and all who sail in it by the ‘short and curlies’… it’s
    Chris Holt’s raison d’etre, and we all are well aware of it because he puts these
    charts up on here every few weeks…the thing is nobody can do jack sh*t about it…Ashley
    doesn’t give a t*ss, and there’s a game on soon that is one of my raison d’etre’s…HWL
    and let’s get it right this time.

  • No Brainer

    Disingenuous this ‘debt’ from pre ashley is not showing the securitisation of the money used to build the milburn leazes extension. Ashley s debt paid that off also. You can add 45 million for that purpose to the amonts shown.
    be honest please

  • Maximus Moose

    nufcmag777 his back pocket

  • magpie9

    Would be good to see how much fatso has pocketed in the last 7 years. TV.money, no transfer expenditure, 50,000 crowds, non payment for S.D. advertising plus every underhanded sleazy scheme he could think of (fee for away tickets etc) Even sold his puppet manager but we cant afford any new players

  • radgiegadgie

    Ridiculous chart for mugs/thickies

    What mash owns his right and left pocket is irrelevant

    The important think if you are looking at finances only is that the club has no external debt and, it’s very profitable.

    Criticize the guy for the footballing side but in terms of finances, the club is profitable end of story.  If he sells,  That debt will be cleared a s part of any purchase.   In the meantime,  how mash wants to push his money around is really not that relevant.

  • A lex

    Debt is debt. Doesn’t matter if I owe money to the bank or to my brother, it is still owed.
    Over the last 8 yrs; debt with a proper finanial institution would have gradually reduced under the repayment programme. Strange how that’s not happened with the Ashley Bank,:isn’t it?

  • radgiegadgie

    A lex incorrect example – it would be more accurate to say you took money out of one of your accounts and put it into another, your brother does not come into it.

    Honestly,  Mickey owns both the club and the entity that lent it to him.   How hard is this for people to understand?

  • LeazesEnder

    What Debt?…tell me what it was for, itemise it…(p.s. asset isn’t deb it goes in the black column).

  • A lex

    radgiegadgie A lex That’s what I meant to say! :-)

  • MikeAshleyLies

    All these comments about it not really being debt make me laugh. If it’s not debt, why are the club paying ashley £11m one season and £18m another.

  • MikeAshleyLies

    The club has not yet been profitable before player trading :)

  • MikeAshleyLies

    He’s been reimbursed £11m so far.

  • MikeAshleyLies

    The chart does show that. Starts at £40m and goes down as it was paid off.

  • MikeAshleyLies

    Dunno where you got that figure. I make it £26.8m

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    http://www.debtmanagementplan.us

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