Sports Direct decision to pay Newcastle United for advertising appears to be reversed
When the 2014/15 Newcastle United accounts were made public at Companies House 12 months ago, they included a surprising reference to Sports Direct.
Since taking over the club in 2007, Mike Ashley has used NUFC to advertise and promote his retail empire, with no money being paid to the football club in return.
St James Park was even shamefully renamed and given SD branding, once again with Sports Direct shareholders benefiting but not Newcastle United.
However, a year ago we were told that things were changing, with the free promotional & advertising services provided by Newcastle United to Sports Direct coming to an end.
The 2014/15 accounts stating that whilst no money had been paid by Sports Direct to date, a new ‘arms length’ rate agreement was going to come into effect, presumably at market rates.
Newcastle United stating that ‘the Company anticipates receiving payment for these services in the future’.
Released Thursday 14 April 2016
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.’
One year on and it would appear that despite last year’s announcement, nothing has changed…
Released Tuesday 11 April 2017
Extract from the 2015/16 Newcastle United Football Accounts
‘During the current and prior year, advertising and promotional services were provided to Sports Direct International PLC, being a company associated with the ultimate owner of the company MR MJW Ashley.’
With the club once again using the words ‘current and prior year’ they are pitching in both years/seasons together, suggesting there has been no change in terms of Sports Direct now starting to pay for the advertising/promotion provided by NUFC.
Previously, the club have stated that Commercial revenue is the best chance Newcastle United have of gaining an advantage over competitors.
In the 2014/15 accounts, the Commercial revenue was £24,872,000.
In these latest 2015/16 NUFC accounts, Commercial revenue is £25,101,000
In this past year, the Commercial revenue at Newcastle United has risen by £229,000, by less than 1%, a figure even below inflation.
Nobody disputes that Mike Ashley owns the club lock, stock and barrel, and he can do whatever he chooses to do.
However, unless something seriously changes in terms of the club being ran ambitiously off the pitch, it is hard to see how Newcastle can ever seriously compete, if all they can do is rely on the same Premier League TV money (assuming we are back in the top tier) that every other club gets – with other revenues showing zero/minimal improvement.
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