Newsletter

Get your daily update and weekly newsletter by signing up today!

Opinion

Newcastle United Commercial Revenue just doesn’t add up under Mike Ashley – As new ‘bid’ for NUFC is made

2 years ago
Share

In the last season (2006/07) before Mike Ashley arrived, the Newcastle United Commercial Revenue was £27.6m.

By the time we got to the last available Premier League season account of 2017/18, that figure was £26.7m.

So over a decade later, with the massive growth in popularity and money that Premier League clubs attract, the figure was still less than before he arrived.

It seems almost impossible, considering the fact that every other single decent sized club, has seen their Commercial Revenue increase significantly.

When releasing the 2012/13 accounts, amazingly Mike Ashley actually had this included with the accounts:

“Matchday and commercial revenue is a key driver because that is where the club can compete with – and outperform – its competitors to enhance its spending capabilities.”

Newcastle United Commercial revenue over the seasons:

£23.9m – 2004/05

£27.9m – 2005/06

£27.6m – 2006/07

£25.9m – 2007/08

£19.4m – 2008/09

£15.2m – 2009/10

£15.8m – 2010/11

£13.8m – 2011/12

£17.1m – 2012/13

£25.6m – 2013/14

£24.9m – 2014/15

£25.1m – 2015/16

£12.1m – 2016/17

£26.7m – 2017/18

In the past, the high Commercial Revenue of the final years before Mike Ashley took over, has been claimed to be down to Hall and Shepherd taking money early from commercial deals, at the expense of future years.

However, when you look at it, in the final two seasons under Hall and Shepherd you had Commercial Revenue of £27.9m – 2005/06 and £27.6m – 2006/07.

Then in Mike Ashley’s first season it was £25.9m – 2007/08, so that suggests that the existing commercial deals were still very good due to what had been set up under the previous administration and that they hadn’t taken loads of cash up front that hampered the future.

It was only once Mike Ashley got his feet under the table and agreed his own deals, that things really went downhill.

The Commercial Revenue didn’t just stagnate, which would have been bad enough, they actually significantly reduced.

The Mike Ashley second season producing £19.4m – 2008/09 and then subsequent years of £15.2m – 2009/10, £15.8m – 2010/11, £13.8m – 2011/12, £17.1m – 2012/13.

It just doesn’t make sense.

Especially when we get to the most up to date figures for 2017/18 and still not matching either of the two seasons before Mike Ashley took over.

You will no doubt have seen the latest claims of a £300m takeover offer for Newcastle United (if not you can read HERE and HERE).

This is another Peter Kenyon figurehead led claimed bid with involvement of a hedge fund and possibly investment management company etc etc.

They have attempted to raise bidding cash from investors with a path laid out for them to then make a profit if/when the club was sold, plus potential dividends paid out in the meantime.

The document sent out to try and attract investors, is largely based on being able to increase commercial revenue form the current £20m+ level per season, to £60m+ (or more) per season.

Whatever you think of this supposed latest bid to buy NUFC, the current Commercial Revenue can surely be significantly increased.

In the investor brochure, it claims the current kit and shirt sponsor deals can be massively increased.

Both Puma and FUN88 see their deals end in summer 2020 so new deals could be struck elsehwere.

The investor brochure states they currently bring in £5.5m-a-year shirt sponsorship with Fun 88 and £6m each year with Puma.

The potential new owners believing they can get three times as much (£18m( for shirt sponsorship) and twice the £6m Puma are currently paying for the kit deal.

Also interesting to look back on this from Chris Holt who publishes nufc-ashlies.blogspot, which he describes as ‘A Compendium of Contradictions from Mike Ashley’…

Over five years ago, he posed these questions about the Commercial Revenue and why exactly Newcastle United aren’t benefiting more.

nufc-ashlies.blogspot –  17 August 2014:

‘So, Puma took the kit deal from Adidas in 2010/2011 and there was no increase in income, this is to be expected, Adidas had chosen not to extend their 14 year association with the club following relegation and commercial income was dropping in every area. However, once Newcastle were back in the Premier League, and the deal was renegotiated in 2012, you would have expected some recovery in commercial income from that new deal, at least a couple of million.

There’s no evidence of any growth whatsoever though. Newcastle had qualified for the Europa league, more games, more TV coverage, higher profile, yet commercial income actually went DOWN £2m! How could that be?

Compare this to 13/14 when the Wonga sponsorship clearly coincides with a much bigger bump in growth in commercial income at the club, it’s easy to see the additional value they bring compared to what Virgin Money offered. But Puma kit deals don’t show any corresponding increase.

This opens up a host of questions that it would simply be conjecture trying to answer, but as long as the club will not provide details, we are only left to ask. Have Puma ever increased the amount the club receive in any of their deals with the club? If not why not? Like the stadium advertising, do the deals with Puma somehow benefit Sports Direct and Mike Ashley more than Newcastle United?’

Share

If you would like to feature on The Mag, submit your article to [email protected]

Have your say

© 2021 The Mag. All Rights Reserved. Design & Build by Mediaworks