Newcastle United confirm some money owed to Mike Ashley repaid and Sports Direct now pay for advertising
Mike Ashley has taken money out of Newcastle United since the last accounts.
The Newcastle United Fans Forum minutes finally published on Friday 5 October, 11 days after the meeting was held.
Actually some interesting stuff this time.
The minutes reveal that the owner has taken cash out, meaning the amount owed to him has dropped, the minutes stating: ‘The amount owed to the owner was disclosed in last accounts and the figure is currently less than that.’
Much of that money ‘owed to Mike Ashley does of course relate to what was basically part of the price of buying the club, such as the mortgage that was still owed on the stadium redevelopment.
No amount stated of what he has paid himself back but no doubt this had an impact on the summer transfer spending.
The club also state that Sports Direct pay for all ‘advertising in the stadium’, with the claim that ‘Sports Direct is only allocated what the club doesn’t sell.’
It appears to indicate (see below) that Sports Direct must pay a lower rate for this ‘unwanted’ advertising but difficult to believe that all the advertising positions couldn’t be sold to other businesses.
SD of course get numerous other benefits such as getting exposure at all press conferences and at the training ground for example, so whatever they are now paying (which is better than the previous position at least), they will still be getting a great deal.
Newcastle United Fans Forum minutes (Meeting on Monday 24 September 2018):
AH: “There is an idea from fans that the club has £30m – £50m in the bank. Is that accurate?”
The club stated that it was an oversimplification to talk about a cash position at any particular point in the season.
The cash flow has peaks and troughs through the season and has to be managed – including periods to ensure the club is not in a negative cash balance – with support given either by the owner or through an external lender.
Either way, by the end of the financial year we aim to pay back what is owed, in terms of short term funding, to whomever it is owed.
The amount owed to the owner was disclosed in last accounts and the figure is currently less than that.
However the source of funding and level of funding required for the remainder of the season is not yet finalised, so this position may change.
There is now an agreement in place whereby Sports Direct pays for all advertising in the stadium.
Sports Direct is only allocated what the club doesn’t sell and that arrangement can be terminated immediately by the club if another company is willing to pay more on a fair commercial basis.
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