Mike Ashley massaging wage bill to help sell Newcastle United – Report
An interesting report this morning regarding Mike Ashley and the Newcastle United wage bill.
When Newcastle United finally released their latest accounts earlier this month, it allowed comparisons to be made with all of the other 19 Premier League clubs.
Something about Newcastle’s stood out a ‘little’ bit.
Whilst 19 clubs predictably saw their wage bills go up last season, one club’s headed the other way.
Promoted clubs Brighton (95%) and Huddersfield (190%) saw by far the biggest percentage rises now they were in the Premier League. However, Newcastle’s actually dropped by 16%.
A Thursday morning report in The Times by Martyn Ziegler has seen him examine the possible reasons for this, with the help of Kieran Maguire who is a lecturer in football finance at the University of Liverpool (Kieran once famously said, that if Mike Ashley was trying to buy the club he supports ‘I’d be soiling myself’ – he may also be experiencing a similar sensation on Saturday if Newcastle win, as Kieran Maguire is a Brighton fan).
This is that wages comparison from The Times article:
Delving into the figures, Kieran Maguire says that in the 2016/2017 Championship accounts, some £22m in ‘future salary costs’ for 2018 and 2019 had been included, based on salaries for players not expected to be in the first team squad. These figures appearing under ‘provision for liabilities.’
Looking at the wage bill figures above, Kieran Maguire told The Times that more realistic figures (rather than the accountancy tool that has been used) are a wage bill of £90m for 2016/17 and £103m for 2017/18.
As for reasons for doing this…
Kieran Maguire told The Times:
“If you are putting a club up for sale in the Premier League then it makes it more attractive to potential buyers, if the club looks more profitable when it is in the top flight, with wage costs under control.”
A figure always looked at, as to the financial health of a Premier League club, is the wages/revenue ratio.
Based on the 2017/18 accounts, Newcastle United are easily one of the most attractive on that basis, with only 52% of revenue going on wages, whilst The Times say almost half of the other PL clubs show 70% or more going on wages.
There is nothing illegal regarding what Mike Ashley and Newcastle United have done. It simply made the 2016/17 NUFC accounts look a lot worse when it came to headline figures (and didn’t Ashley milk it!!), talking about such a massive loss in the Championship season. Supporters assuming back then that this had been with the intention of justifying a lower spend on players once back in the Premier League.
The Times say they approached the club to give a response to this report on the wage bill but nothing was forthcoming.
Here’s hoping that at last Mike Ashley is serious about trying to sell Newcastle United and is doing some good housekeeping to make it look as attractive as possible.
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