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Mike Ashley needed to do it at Newcastle United to ‘safeguard the club’s future’ – A big fat red herring?

2 months ago
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Mike Ashley acted quickest of all Premier League club owners this week.

A statement which is never going to have a positive outcome for Newcastle United.

Anything positive and NUFC will always be last in the queue under Mike Ashley, whilst when it comes to the ugliest of extremes in the ugliest football league in the world, Ashley will always ensure his snout is in prime position at the trough.

The Chronicle broke the story (see below) on Monday, no announcement, statement, or explanation from the club (and still none three days later…) but staff who had received their email from Ashley via Lee Charnley, made the newspaper aware of the contents.

The Newcastle United owner putting most (lowest paid, not players or senior coaching team) NUFC staff on furlough leave, meaning the government will have to pay them during this crisis, the Chronicle saying Mike Ashley and his minions had ‘told staff that the decision was to safeguard the club’s future.’

This story has been repeated everywhere with pretty much zero digging deeper.

Do you honestly believe Mike Ashley had to do this to ‘safeguard the club’s future’, or is it just a big fat red herring?

If you take say Gateshead Football Club, if there are no matches then there is pretty much no money. Apart from a handful of season ticket holders, it is basically people turn up and pay at home matches, then that money directly pays the bills that week/month.

Newcastle United are very close geographically to Gateshead but bear no real resemblance in how things are ran financially.

INCOME

Mike Ashley has already banked all season ticket money for this (2019/20) season.

On 25 March 2020 he insisted on taking full payment by direct debit for 2020/21 season tickets from a large number of fans, even though nobody knows when that season will kick off.

Yesterday (1 April), Ashley did the same with those paying monthly in advance for 2020/21 season tickets, thousands of direct debits coming out as usual and it will be the same on the 15 April (those are the two days of the month fans can choose from, when agreeing to pay monthly).

I understand that Newcastle United along with the other Premier League clubs, got their second massive payment of the season from central PL funds (TV money etc) in February, just before the virus situation impacted.

As for payments from shirt sponsors (FUN88) and kit sponsors (Puma), I would be amazed if NUFC haven’t banked most, if not all, of their cash for this current season.

Unlike normal clubs, Newcastle United don’t seriously try to get extra outside commercial income, aside from the sponsors above and those deals done centrally by the Premier League for all clubs, so not missing out on attracting extra business there. Instead Sports Direct get everything for a pittance, the club banked nothing from SD for a decade but now allegedly they will pay £2m for this season. Well that was the case but it wouldn’t surprise you that we now find there are all kinds of penalty clauses and due to the virus situation we end up owing SD £100m compensation!

Losing out on ticket money in the last five home PL games in these months? Well, with Ashley giving away 10,000 free season tickets after driving fans away, there were only 2,500 going on sale match by match to home fans, with 3,200 to away fans (capped at £30 each maximum), so minimal money missing March-May really, compared to overall season revenues.

Also, Mike Ashley has refused to refund cash for tickets that fans have already paid out for home and away tickets, including the Man City FA Cup match. So that money is also sitting in the club’s bank account.

Missing out on catering revenue? As I understood it, Sodexo paid up front for the catering rights for corporates and ordinary fans, so is it not Sodexo who are missing that revenue at the moment?

The same with conferencing hosting through the week at SJP, is that not Sodexo as well?

(Happy to be put right on the Sodexo stuff but this is the message that has been put out in the past.)

Income from players sold will have been banked as normal surely.

Income from the club shop/merchandise? Well, the relationship between the club and Sports Direct is so murky on this front, it is difficult to tell if this will affect NUFC income in any way. Whilst at one time Newcastle United had a host of shops and made decent money selling merchandise, Ashley binned all but one shop in favour of his nearby SD stores and profit is minimal, if any, on this front now.

EXPENDITURE

Whatever money, if any, that might become due for incoming transfers, it will surely be far less than what is due from other clubs that have bought from NUFC, so no worries on that score.

With St James Park and the training ground now closed down, expenses will surely be a minimum on that front.

Mike Ashley is not paying casual matchday staff and of course now is getting the government to pay most of the others now (who aren’t players or senior coaching team).

Unlike a number of decent clubs such as Brighton and Palace, Mike Ashley refused to pay casual matchday workers for the remaining matchdays of the season, to help them at this difficult time.

Lee Charnley in April 2019 said that there was £61m plus any money from sales to spend on players this current season. Rough figures suggest that around £28m of that is still unspent and sitting in the club’s bank account.

Which leaves us with player wages.

This is the big one of course but looks set to be tackled collectively this week.

The Premier League and EFL are involved in meetings this week with player representatives such as the PFA, to come to an agreement.

It would be nice to see PL players collectively agree to go without money to help others and indeed partly that may prove the case.

However, the main part of any agreement looks set to be a deferment of a large part of wages these next few months for players, rather than them actually losing out on much, if any, money.

So basically as I see it, if players agree to a large part of their wages being delayed until this Premier League season can be completed and the final TV money payment activated, that would sort any major worries, certainly for a club like Newcastle United. It isn’t like we are waiting on for massive Champions League money or sponsor cash from a whole host of business relationships.

If/when an arrangement is made on player wages this week, then no reason at all why Mike Ashley shouldn’t take back the responsibility for paying all of the wages for all of the lower paid staff AND indeed do the right thing and pay those casual workers.

As for Mike Ashley’s actions being essential to safeguard the club’s future, you have to hand it to him for having the nerve to say it. Though when he knows the media are so unquestioning, he can be pretty sure he can get away with almost anything.

The Chronicle report:

‘Newcastle United owner Mike Ashley has taken the decision to place the majority of his work force on furlough leave.

Staff are believed to have been informed via an email from Lee Charnley on Monday morning as the UK got ready for week two of lockdown caused by the virus pandemic.

Staff were pointed in the direction of the governments Coronavirus Job Retention Scheme which gives workers 80% of their wages back up to a maximum of £2,500 per month.

It is understood that drastic move by Ashley includes a number of Academy staff and members of the club’s scouting department as well as the club’s Foundation charity. The move does not include players and first team coaches.

Newcastle chiefs are understood to have told staff that the decision was to safeguard the club’s future.’

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