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The £1billion letter Toon For Change have sent to the potential new Newcastle United owners

12 months ago

Following media reports on Monday (11 November 2019) that suggest Orlegi Sports are seeking ‘information and advice’ on Newcastle United, Toon For Change have sent letters introducing what we believe to be the £1billion potential of our club to senior personnel at the group.

Toon For Change, which has grown to over 650 members in size, since launching a free membership initiative last weekend, outlines our desire for an ambitious future.

In addition, comparing the club’s success in the 1990s and early 2000s in comparison to NUFC’s lack of progress under Mike Ashley across the last decade on the pitch and commercially.

Please find the full letter, which was sent to Orlegi Sports’ Chairman, Alejandro Irarragori and Jose Riestra, the group’s Head of Football:

11 November 2019

Mr Jose Riestra

Grupo Orlegi

Bosques de Alisos #47-A Primer Piso Desp. A2-12

Col. Bosques de las Lomas

C.P. 05120 Ciudad de México


Newcastle United: Unlock Our Club’s £1 Billion Potential

Dear Mr Riestra,

We wanted to take this opportunity to introduce our supporter group, Toon For Change and our football club, Newcastle United, which plays in the English Premier League.

Toon For Change is a fan group with over 600 members, led by five United fans who came together in the summer of 2019 after years of unhappiness about the way our club’s current owner, Mike Ashley, runs our club. Mike Ashley has continuously shown discontent for fans and the city of Newcastle alike, while underinvesting in the club’s players and facilities.

In order for our club to move forward, we believe that we need a new owner to take us back to the standing that Newcastle United previously had in world football. We are writing to you, as we believe that you have the desire to grow investments, based on
your current business interests.

Newcastle upon Tyne is a working-class city based in the North East of England, the socioeconomic benefit of a successful football club is unique in Newcastle as a one city club. There is no other top-flight football team for over 100 miles, so alongside our city
centre stadium, category one academy and passionate support, there is a genuine opportunity for growth.

The Club’s Recent History And Potential

Mike Ashley, the club’s current owner has gone on record numerous times stating that he wants to sell the football club and we’re writing to you, to present a fantastic investment opportunity. The opportunity to buy Newcastle United Football Club. Why is it a
fantastic opportunity? You could turn Newcastle United into a £1 billion club.

Earlier this year, it was revealed that Newcastle United’s turnover in 2018 was £178.5million, which was a significant increase from the £85.7million during the 2016/2017 season. It was also reported in April this year, that the club profited around £19 million. These figures reflect the fact that the club is on a stable financial footing, however what it needs now is a party who as owners, show the intention to grow the club and make it a dominant force in world football, as Newcastle United once was.

In 1998, Newcastle United were valued as the fifth richest club in the world; ahead of the likes of Liverpool, Barcelona and AC Milan. Back then, Newcastle United had ambitions to be the best in Europe and they almost were.

In comparison, the most recent results rank Newcastle United as the 21st richest club in the world. Due to a period of commercial stagnation under the current ownership, the likes of West Ham United and Leicester City have been allowed to develop their own
business models and overtake Newcastle United commercially.

Newcastle United supporters are world renowned for their fanatical support and undying love of the club. Regularly taking and selling full allocations for away fixtures, the fans’ loyalty knows no bounds. Clad in the famous black and white stripes, supporters regularly travel the length and breadth of the country to give the team phenomenal

In the 2016/2017 season, whilst in the Championship (second tier of English football), Newcastle averaged a home attendance of 51,106, which was the 15th highest in Europe.

Fans get behind supporter initiatives including impressive flag displays and more recently buying close to one thousand maroon and blue protest scarves as a mark of protest against the current regime.

Newcastle United captured the hearts and imaginations of football fans the world over during the 1995/1996 season due to their style of play. What resonated the most with Newcastle United fans was not only the style of football but the desire to compete with
the best in the England and across Europe.

During the late 1990s and early 2000s, domestic success and European football were regular sights on Tyneside. In the decade before Mike Ashley bought the club, Newcastle United’s average Premiership finish was seventh.

Newcastle United had appeared in the Champions League three times in decade before Ashley and spent most other seasons competing in the Europa League. Under Ashley, the club has qualified for European football once. Famous nights against the likes of Barcelona and Feyenoord and trips to the San Siro are fondly remembered however, nights like this should not be a thing of the past.

In 2007, when Mike Ashley bought Newcastle United, the club was financially, a similar size to Tottenham Hotspur. Tottenham is now a £1 billion club, while Newcastle United is reportedly available to buy for around £350 million. Why? Because Tottenham has showed ambition when investing in new players and has realised its commercial potential. Across the first eight years of Ashley’s ownership of Newcastle United, the average net spend on new players was around £700,000 a year. Tottenham, meanwhile, showed the ambition to compete with the best clubs in Europe, by signing top players and this ambition has reaped rewards. The club now has a state of
the art new stadium and earlier this year, it appeared in the Champions League final.

Football finance expert and Senior Teacher in Accountancy at the University of Liverpool, Kieran Maguire described the progress of Newcastle United compared to Tottenham, across the last decade:

“When they [Newcastle United] were a little bit bigger than Spurs, if he [Ashley] had invested medium sums of money, he could be where Spurs are today. He’s [Ashley] probably the biggest loser from not investing in the club, because Newcastle, if they had been regulars in the Champions League, they’d be worth a billion pounds today.”

Commercial Growth

The club’s lack of commercial success across recent years has in part, been hampered by its association with Mike Ashley’s sports retail business, Sports Direct. Sports Direct is effectively the club’s leading advertising ‘partner’, however it was reported in 2019 that
Sports Direct only pays the £2 million a year in return for the exposure offered by the club. £2 million a year for as many as 100 Sports Direct logos that dominate the stadium’s seating areas, pitch side and its media spaces. The stadium is visited by hundreds of
thousands of people a year and live matches shown from the stadium have an annual TV audience of hundreds of millions worldwide. An independent marketing agency that we have consulted with, estimates the value of Sports Direct’s advertising at St James’ Park
alone, to be worth up to £10 million a year, or five times what is currently being paid by Sports Direct to Newcastle United.

Newcastle United is currently sponsored by FUN88 and our kit is manufactured by PUMA. FUN88’s sponsorship is said to be valued at £6.5m per season. By comparison, Tottenham Hotspur is sponsored by AIA (£35 million per season) and West Ham is sponsored by Betway (£10 million a year). PUMA is the club’s current kit manufacturers and are now in their 10th year of their sponsorship. The PUMA deal is estimated to be worth around £4 million per season to Newcastle United. By comparison, the Tottenham Hotspur kit is manufactured by Nike and is thought to be worth £30 million per season.

Commercial growth has stagnated under our current ownership and this represents a huge opportunity for new owners. Both FUN88 and PUMA see their deals come to an end at the end of the current season and given the growth seen across the Premier League in kit partnerships, there is an opportunity for the club to double its revenue through these streams.

Our Stadium: St James’ Park As A Venue

In recent years St James’ Park has hosted several large events including concerts and other sporting fixtures.

St James’ was the host for several group games during the 2015 Rugby World Cup including a match featuring the world famous All Blacks. St James’ hosted England’s final warm-up fixture ahead of the 2019 Rugby World Cup, while magic weekend, one of the biggest fixtures in the Rugby League calendar, returns to the stadium for the 2020 edition. Recently, St James’ has also hosted tens of thousands of people at Ed Sheeran and Kings of Leon concerts.

St James’ is truly a multipurpose stadium and this can be capitalised upon more effectively. The stadium is perfectly situated in the city centre and close to excellent transport links including a national train station and airport. St James’ boasts 99 corporate hospitality boxes capable of holding a wide range of events. From local meetings, conferences and AGM; no event is too big for St James’. There is an opportunity for marginal gains in stadium revenue to lead to an extra few million pounds a year for the playing budget.
As football fans, all we want is to be able to dream about our football club again. To believe, to dream and to achieve. We would be delighted to introduce you to our incredible football club, its fanbase and our beautiful corner of the United Kingdom.

Yours sincerely,

Joe Moore, Toon For Change


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