Must Read: My thoughts on the most convincing defense of Mike Ashley I’ve read
I was sent this interesting article this week by @Dan_Milne on twitter. It was written recently for Inside World Football and was an argument as to why Mike Ashley was good for Newcastle and supporters would be mad to drive him out of Toon.
The author (@Matt5cott) took some backlash on Twitter. But it was a better written defense of Ashley than any I’ve seen. Scott is somebody interested in the finances of football, not someone watching the games every week, not travelling thousands of miles and paying thousands of pounds to see one draw from ten games, he’s somewhat divorced from the reality of being a Newcastle fan and the cost incurred for supporters in order to provide the reward Ashley sees and Scott waxes lyrical about.
It’s a well-researched article with many accurate facts, and convincing arguments as to why Ashley has done a good job though, which is why I thought it deserved a response more than most, because it’s the sort of thing some people might be convinced by.
Scott starts with a look at how Newcastle have performed in the league in the post-war years. He builds a straw man by pointing out that Newcastle have not won the league in 88 years or a domestic cup in 60 years. As if any Newcastle supporter is currently demanding league titles and cup finals year in and year out. It’s clear to anyone being fair that Newcastle fans are only asking not to fight relegation most of the time, not to lose 50% of games three years in a row when we had done so just once in the 30 years prior. We are now only the second team in Premier League history to lose as many games over 3 years.
“Theirs is not a tradition of trophy-laden triumph. “
Perhaps not, but despite not winning a domestic trophy in 60 years, there are still only 8 clubs to have won more silverware than Newcastle United. If anything, this lack of silverware in the last 6 decades shows the unfathomable dedication and patience of the Newcastle support. The club has the third highest attendances in the country despite this lack of trophies. Even across the whole of Europe, Newcastle’s attendances are better than any that have gone as long without a trophy.
This is not a club whose fans spit out the dummy because they’re not winning silver pots.
Scott then points out that post-war Newcastle “only spent 21 seasons in the top 10 of English football”. That’s a third. He doesn’t then look at how Ashley compares. If he did he would have to report that he’s done worse, just 2 top 10 finishes in 8 years, or a quarter.
The only figure Scott looks at for Ashley is average finishing position. He ignores the current season to come up with a figure of 13.43, our unexpected last day jump up the league to 15th took that to 13.62. That number is better than the post-war average he provides of 15.85, because we all need to remember how bad we were back in 1946 and be glad we haven’t plumbed those depths under Ashley. But let’s look at what is more likely to be in the memory of the majority of supporters, the 20 years prior to Ashley arriving. It included 4 seasons in the second tier, in the early 90s the club was 31st and then 42nd best in England. Yet still, the overall average finish position was 12.7. So, for those of us not old enough to join the fight against Hitler, Ashley has dropped standards that have been set over 2 decades of football.
This is what Scott says about Ashleyout.com
AshleyOut.com goes on to make some completely spurious accusations that have little basis in fact. “Club debt has risen, match day and commercial revenue have dropped significantly and, most importantly, our league and cup records have deteriorated,” it adds.
Newcastle’s net debt is £94.9 million, which is nominally higher than before Ashley took over. But the claim is also disingenuous. There are £18 million of loans that are repayable on demand and £110 million of longer-term loans, all offset by £34.1 million of cash in the bank.
If Scott believes that debt was lower when Ashley bought the club, why doesn’t he give any debt figures for 2007? When Ashley arrived he transferred all the club debt to himself, poured in another £30m to cover the cost of relegation and has only been repaid £11m. So how he does justify any claim that debt has reduced? He seems to base it on the club also having cash in the bank, but seems not to realise that the club had cash in the bank when Ashley arrived too. Here’s the excellent Swiss Ramble figures on Newcastle’s debt.
Clearly debt has grown since 2007, both gross and net. His claims can be dismissed out of hand and Ashleyout were exactly right with their statement. Scott seems not to have read Ashleyout.com before choosing to criticise anyway though, he also states
What AshleyOut.com omits to mention is that all of these loans are owed to Ashley himself and they do not bear a penny in interest.
From the debt section of Ashleyout.com
The debt owed to Mike Ashley is provided as a loan, free of interest
Given what Scott omits, it’s odd for him to criticise Ashleyout.com for what he claims they don’t tell readers. Ashleyout.com are clear on their aims, they want Ashley out, the clue is in their name, their raison d’etre is to criticise Ashley for all he’s got wrong, and make a case against him. The prosecution in a court tend not to bring up mitigating factors on behalf of the defense. Scott is supposed to be an independent journalist being fair, but he’s taking the position of defending Ashley then misrepresenting it as balance. The fact is AO.com don’t even omit what they’re accused of, they’re very fair and it’s Scott that leaves out balance and evidence for his claims.
Matchday & Commercial
Scott returns to the subject of commercial & matchday income. Not to give any evidence that they have not decreased as he intimated earlier, but only to excuse the fact that both have indeed deteriorated.
I find it truly puzzling that presumably paid-up Newcastle fans would call for their club to raise match day revenue, which is already some of the highest in the land. In 2006-7 there were 27 home matches, raising total match day receipts of £33.6 million. Last season there were 22 home games, worth £25.6 million in total.
This meant Newcastle were earning £1.24 million per game back then and are taking £1.16 million now. This is a real-terms, post-inflation drop in per-game ticket revenue of almost 25%. With occupancy rates of 95.9% of capacity, it can only be assumed that the decline in gate receipts from 2006-7 to 2013-14 was down to substantial real-terms cuts in ticket prices. What’s the beef?
The beef is that it’s corporate reductions. Gallowgate and Leazes end Season tickets prices have gone from £482 to £578 in Ashley’s tenure. East stand season tickets are up over 20% from £583 to £710. This, while Bar 1892 and Sports Bar prices have decreased 10% and 13% respectively, not to mention the reductions being thrown at executive box holders as box holders realise that even clients coming on a freebie would rather not sit through the turgid performances.
Our 52,000 capacity stadium is no longer offering the club the advantage over other clubs that it was built to offer. In order to sell the expensive seats when the product on offer is sub-standard, Ashley has had to slash their cost, while the rest of us proles pay more each year.
Here’s the extent to which other clubs have stolen the march on Newcastle in terms of matchday income.
On commercial income the mitigation offered is even less convincing
Newcastle earned £25.6 million of commercial revenue in 2013-14, compared with £27.6 million in 2006-7, which is a 7.25% drop. But the sponsorship landscape has changed unrecognisably in the intervening period. Back then, Newcastle were one of England’s six richest clubs, with a turnover higher than Manchester City’s, comparable with Tottenham Hotspur’s and only a few tens of millions less than Liverpool’s. They were in Europe and had competed in the Champions League within the previous five seasons, adding to their marketability.
But even before Ashley took over, Newcastle’s qualification for the Champions League had become highly improbable with the arrival of Roman Abramovich and his billions at Chelsea. That improbability became as good as impossible with the deployment of Abu Dhabi’s sovereign wealth at Manchester City and after the financial crisis struck, firms became more discerning about whom they would sponsor. Now, blessed by their boom-town London location, Tottenham generate revenues 50% higher than Newcastle, Liverpool more than double.
I had to read this a couple of times to see if he made any case at all. I couldn’t detect one. The justification offered seems to be that other clubs have done well in the intervening years. Well yes, that’s our complaint.
Newcastle United were better placed than most of these clubs to push on, but because of Ashley, have not. Tottenham boom because they’re in London he claims, Liverpool (not in London) boom, without any justification. It’s an ill thought out argument that seems to place the emphasis on the financial crisis and other billionaires. Ignoring the fact that the Newcastle owner himself is a billionaire, one of the wealthiest in the league in fact and that no other club, whether in London, the midlands, North West or North East has seen any drop in commercial income whatsoever.
That Newcastle still generate in excess of £25 million a year in sponsorship, retail and merchandising revenue (while Everton take less than half that at £11.8 million despite a much greater history of success) should be a source of pride, not rancour.
The fact is Newcastle have not needed [Ashley’s] money in recent years. In 2011-12, when they finished fifth, they generated £93.3 million in revenues and, despite a wages-to-turnover ratio of 68.7%, still had £11.9 million left over to spend on transfers – which they duly invested. In 2012-13 there was a £14.3 million operating-cash surplus and a net £17.7 million was spent on players
Scott seems too keen to praise the financials to be able to see the problem this performance raises for fans when making a comparison to Everton. He sees pound signs, the rest of us immediately wonder why it is that Everton have been able to spend £28m on Lukaku while Ashley has never got close to that, never got close to spending HALF of that on one player. Why, if we’re so much more flush with cash? It’s unforgivable to Newcastle fans that such a smaller fish (as Scott himself identifies Everton) challenge on such a larger scale.
This is the crux of the matter, whatever the financial performance of the club, the question for fans is “then what?” Even if Matchday and commercial income had risen exponentially throughout Ashley’s tenure, if every year the club was more profitable than the last, even if profit were based upon improved revenue streams rather than just player sales as most of the profit has been, should we not then expect those revenues to be reinvested to avoid relegation battles? Should we turn the other cheek to the payday lender sponsor, the awful product on the pitch, the worsening and cheapening appointments in the most important areas of the club – chief exec and team manager (or coach as they have it)?
Scott ends his article on that most trite phrase that Newcastle supporters are sick to the back teeth of hearing
After the collapse experienced following Pardew’s departure, they should be careful what they wish for. If Ashley pulls the plug on his investment then the spiral of terminal decline they risked entering before he arrived, one experienced by other good clubs such as Leeds United and Portsmouth, could very well become a reality.
A more arrogant, patronising, condescending, snotty bit of advice there has never been. Sheer ignorance can be the only excuse offering such wisdom, it displays staggering incomprehension of the club.
Alan Pardew left Newcastle United to go to a smaller club, lower in the league for MORE money, and that club paid £3m to Mike Ashley for the privilege. That is the situation that Mike Ashley engineered. He paid buttons, so his head coach wanted to leave, he was offered millions, so he let him leave. Every Newcastle fan wished, hoped and prayed for an improvement, but rather than take the opportunity to go and find a better man (almost anybody), rather than use some of the profit to pay the going rate for an experienced, talented coach, Ashley persisted with an even more frugal option. The collapse we’ve witnessed is not the result of any fans wishes, but entirely down to the ineptitude of Mike Ashley, the man he wants to defend.
The misguided view is only compounded by the fact that having spent 1700 words telling us how financially stable the club now is, he does a complete 180 in his last sentence and tells us that if Mike Ashley walked away now then the club would still face complete financial ruin. Well exactly Matt Scott. Why have you tried to convince us otherwise then? Eight years of “getting the finances right” and Newcastle United are still no more stable than the day Ashley decided to promote his shop through us.
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