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‘Problem is no short to medium-term harm to Mike Ashley whether Newcastle are relegated or not’

1 year ago

On Thursday morning, what I perceived as an excellent article appeared on The Mag entitled ‘Why Would Being In The Championship Be Worse Than This?’ and whilst answering the question (for Newcastle United fans) directly is quite straightforward, it offers up a separate question – Why is a Premier League club like Newcastle United not worried by the risk of relegation?

The answer to the article’s titular question is that it wouldn’t be worse to be in the Championship, especially going on past experience.

Winning games, smiles on faces and a general happy mood all round but with one problem. You must accept that you’re no longer a so-called ‘big club’ for the time being.

Beating Spurs and Manchester United 1-0 is a far better story than beating a Luton Town or a Reading 5-0 in my opinion. Big fish in a small pond springs to mind.

Back in 1998, then Chairmen Freddy Shepherd and Douglas Hall were so alarmed by crowd unrest just a couple of games into the season that they sacked manager Kenny Dalglish. The reasons for that were two fold.

Firstly, fans were far from enthused with the brand of football that the Scot served up, it was neither attractive on the eye or productive in getting results with the team dropping from the heights of 2nd in 1997 to 13th in 1998.

Secondly, the club couldn’t afford a relegation, something which was a very real possibility throughout that season.

This was a similar problem that faced Ruud Gullit just a year later. The Dutchman was at odds with senior players (infamously, Alan Shearer, Duncan Ferguson and Rob Lee) and the start to the season was threatening to plunge the club into a relegation battle. Gullit was jettisoned and in came Sir Bobby Robson and (after initial problems were overcome) took us on an unbelievable journey and adventure.

After five years, a 5th place finish put paid to the white knight and the threat of not qualifying for the Champions League/UEFA Cup ultimately forced the club to act once again. Now just read that back to yourself. The people in charge of the club back in 2004 were bricking it that the club would lose the revenues of European football. These days, Premier League survival is put at the mercy of a coin toss, put in jeopardy through gross mismanagement and out and out deliberate sabotage from those in charge.

To answer why this is the case is simple. It doesn’t hurt the club (or the owner) if the club goes down, at least not in the short term. For each relegation that Mike Ashley has presided over, the club have had enough players of significant value by which to not worry about such trivialities as demotion from the top flight. The other big income that the club gets when it is relegated is the parachute payments and they are hugely significant.

How I understand it when a club is relegated from the Premier League, they receive a percentage of the equally shared element of broadcasting rights each Premier League club receives. It gets 55% in the first year, 45% in the second and if the club was in the Premier League for more than one season before relegation, 20% in the third year. After which it will have to survive on it’s own.

So if Newcastle United were to be relegated this season and (for the sake of simplicity) the broadcasting rights were £100m, the club would receive £55m, £45m and £20m over each of the following three years, that is unless it achieved promotion during that time. That puts it at one hell of an advantage over the other Championship clubs.

So where’s the threat of relegation to Mike Ashley?

There simply isn’t one while the Premier League continuously reward a club’s failure with massive financial gain even if it’s just short term. The owner can sell big money players to help get the club back up or keep the big money players and use the subsequent payments.

When we were relegated in 2009, the club shipped out Michael Owen, Damien Duff, Obafemi Martins, Sebastian Bassong, Habib Beye, Geremi and Mark Viduka, spending a mere fraction of their value (and wages) to get back to the Premier League. Granted the club retained some high earners and were indeed the ‘Big fish’ in the Championship’s ‘Small pond’ but it would have been a major shock if it hadn’t bounced straight back. Cost to Ashley? Nothing.

Fast forward to 2016 and the story was similar. Gini Wijnaldum, Andros Townsend, Daryl Janmaat and Moussa Sissoko generated £75m+ (and savings in wages) for manager Rafa Benitez’ rebuild and subsequent promotion bid. Yes we spent a big proportion of that but once again, it would have been silly if we hadn’t been promoted at the first try. Cost to Ashley? Nothing.

On both occasions, I would venture that the owner broke even but would probably have still made something out of the situation. That is one hell of a secure position to be in when starting a Premier League season.

It wasn’t like this pre-Ashley. A relegation would have been catastrophic, now it’s a temporary inconvenience. Falling attendances used to be seen as a massive factor in how the club operated. Could you imagine the mad panic if the attendances were 8k down under Shepherd and the Hall’s stewardship?

Now that’s not to say Ashley would actually welcome a relegation but it certainly doesn’t add any pressure to owning Newcastle United. We’ve seen the way he laughs off losing £150m in Debenhams shares so he probably deems owning our club in the same manner, after all, the evidence is there in recent years.

Club apologists will argue that Mike Ashley doesn’t take a wage/dividend out of the club and that the Halls and Shepherds did. So what? I can’t believe any Newcastle fan would say that to justify Ashley’s ownership of the club, especially in the face of everything he’s done with it.

The trouble is that fans are caught between a rock and a hard place. ‘Support the team and not the regime’ many fans say and that’s all well and good but the two are intrinsically linked. Whilst I could never bring myself to openly want the team to go out and lose games, you don’t get that feeling you used to get when we actually win them either.

S****s D****t United will continue to bumble along season on season. It will avoid the drop and it will also get relegated every now and again. Over the last two years we had good enough players (and a quality manager and coaching staff) to keep it’s head above water, this season we sadly do not. We are at the mercy of three other teams being worse than we are and some of the other poorer sides are starting to look upwardly mobile all of a sudden.

Either way, the financial imbalance that aids the relegated teams means that it won’t cost Mike Ashley in the short to mid-term. That will only happen if the club goes down…and stays down.


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