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Mike Ashley major Newcastle changes: Sports Direct to pay for advertising & club overdraft?

3 years ago

There are signs that Mike Ashley is set to change a lot more in the running of Newcastle United, other than potentially agreeing to hand over control of all football matters to Rafa Benitez – if he agrees to stay.

Wednesday morning has brought fresh encouragement on the Rafa front, with media reports that the Manager has agreed verbally with the club he is willing to stay – and is already working on his transfer strategy.

However, there has also been widespread reporting that Lee Charnley was summoned by Mike Ashley and met the club’s owner at his Sports Direct Shirebrook headquarters.

Rather than Charnley being fitted out for a job in the warehouse, sadly, instead he was there to give Mike Ashley a review of the season and how the club managed to achieve relegation despite over £80m spent on transfers.

Whilst Graham Carr looks certain to leave if/when Rafa Benitez is confirmed as staying, the various media reports all predict Lee Charnley will be staying to manage the office on Ashley’s behalf.

Interestingly though, the Telegraph claim that Newcastle United may be arranging an overdraft to help cover the next 12 months as United look to return to the Premier League.

If this becomes reality then it would represent a massive departure for Mike Ashley in how he has ran Newcastle United over the last nine years, suggesting a more hands-off approach and a separation of the football club from his retail empire.

City Hall Gifts -

With Ashley owning 100% of Newcastle United, it ultimately means that he would be increasing his costs by borrowing money from outside, rather than shifting his own personal cash around.

Last month saw another hint of Newcastle United operating differently in the future, particularly when it comes to its relationship with Sports Direct.

Surprisingly getting very little (no?) coverage elsewhere, last month we reported that hidden away in the newly published Newcastle United accounts (covering 2014/15 season), was the gem which stated that moving forward, Sports Direct would now be paying for all ‘advertising and promotional services’ supplied by Newcastle United.

After nine years of infamously this not happening, very interesting why this would suddenly happen now…

Extract from the 2014/15 Newcastle United Football Accounts

‘During the current and prior year, advertising and promotional services were provided to Sports Direct International being a company associated with the ultimate owner of the company, MJW Ashley.

No consideration has been paid by Sports Direct International for these services to date but Sports Direct International and the Company are in the process of agreeing an arms length rate for these services and the Company anticipates receiving payment for these services in the future.

During the current and prior year, advertising and promotional services were provided to companies associated with MR MJW Ashley, the ultimate shareholder of the Company’s ultimate parent undertaking MASH Holdings Limited. No consideration was paid or payable for these services.’

Towards the end of March with relegation looking inevitable, Mike Ashley of course had this to say as well about Newcastle United and their finances:

“All I can say is that there is a bank account and when you have emptied it, it’s empty. Don’t come crying to me for more money.

“There is virtually nothing left now, they have emptied it. I have virtually nil effect on Newcastle in reality because I only pick the board.”

When he talks of ‘Don’t come crying to me for more money’, does this fit in with the club owner now setting the club adrift and meaning it will have to take on a major overdraft facility? Although of course you would have to assume that any overdraft would have to be underwritten by Ashley himself anyway.

Whilst overwhelmingly fans still clearly want Mike Ashley to sell up and hand over control to somebody with ambition, in the meantime/short-term there are green shoots of potentially big changes on and off the pitch where Ashley and the club are concerned.

Rafa Benitez is of course the biggest/only show in town for all Newcastle fans but it would be nice to think some kind of normality could also descend on the club when it comes to the non-football side of things.


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