Mike Ashley finally tells the truth about Sports Direct paying for Newcastle United advertising
When Mike Ashley took over the club in 2007, his people told Sir John Hall that the main/overwhelming reason for doing so, was to promote and grow his Sports Direct retail empire around the World.
The Premier League TV deals both domestic and overseas, a perfect opportunity to deliver a sports retailer’s message to the masses.
No Newcastle fan at the time, realised just what a one-sided relationship this would be…
On Friday the official Newcastle United 2018/19 accounts were finally made public and included this:
‘The group made sales, including stadium advertising income, of £1,113,000 (2018: £385,000)….from Frasers group PLC (formerly Sports Direct International PLC) and subsidiary companies (“Frasers Group”) companies connected with Mr MJW Ashley. These transactions were on normal commercial terms.’
So for the 2018/19 season, Sports Direct / Frasers Group paid a total of £1,113,000 to Newcastle United for stadium adverting and other things ‘on normal commercial terms’ and they paid £385,000 for the same in 2017/18.
Mike Ashley finally telling the truth, at least in part, about Sports Direct and payment for advertising at St James Park, as well as other services supplied.
If we go back to Friday 26 July 2019, Mike Ashley stated in the Sports Direct accounts:
“In the current and prior year we have in the ordinary course of business been charged £1million per season for advertising rights whilst Newcastle United are in the Premier League, this is covered in the related party note in the financial statements.
“For the football season beginning in August 2019 the Sports Direct Group will be charged £2million for the advertising rights.
“Sports Direct still considers this to be value for its shareholders.”
We don’t of course know as yet what, if anything has been paid by Sports Direct / Frasers Group to Newcastle United for the 2019/20 season.
However, the 2018/19 official NUFC accounts show Mike Ashley WAS telling the truth in the Sports Direct accounts about paying Newcastle United £1m for the 2018/19 season BUT he also stated £1m had been paid in 2017/18 and that wasn’t true, it was only £385,000 as the official NUFC accounts show.
The Sports Direct and Newcastle United relationship has been very much a case of smoke and mirrors. A tangled web totally lacking in transparency and indeed truth at times.
As you can see below, the club’s own accounts for 2014/15 when released on 14 April 2016 stated that nothing was paid that season or previously by Mike Ashley’s Sports Direct but that NUFC were ‘in the process of agreeing an arms length rate for these services’…
However, then the next two years of accounts indicate that nothing was actually paid, just that the ‘advertising and promotional services’ were supplied for nothing as per normal.
To get confirmation of the full picture in terms of the Sports Direct ‘advertising and promotional services’ provided by Newcastle United, these are the references to them in the previous four NUFC annual accounts before these latest 2018/19 ones.
On 14 April 2016, when the 2014/15 Newcastle United Football Accounts were released, they included:
‘During the current and prior year, advertising and promotional services were provided to Sports Direct International being a company associated with the ultimate owner of the company, MJW Ashley.
No consideration has been paid by Sports Direct International for these services to date but Sports Direct International and the Company are in the process of agreeing an arms length rate for these services and the Company anticipates receiving payment for these services in the future.’
On 11 April 2017 the 2015/16 Newcastle United Football Accounts were released, they included:
‘During the current and prior year, advertising and promotional services were provided to Sports Direct International PLC, being a company associated with the ultimate owner of the company MR MJW Ashley.’
On 22 May 2018 the Newcastle United 2016/17 accounts stated:
‘During the current and prior year, advertising and promotional services were provided to Sports Direct International PLC (“Sports Direct”) and subsidiary companies, being companies associated with the ultimate owner of the company MR MJW Ashley.’
On 18 April 2019 the Newcastle United 2017/2018 accounts stated:
‘During the current and prior year advertising and promotional services were provided to Sports Direct International plc, and subsidiary companies… being associated with the ultimate owner Mike Ashley.
“Subsequent to the year end an agreement has been put in place under which (NUFC) will receive payment from Sports Direct for stadium advertising.’
To claim that stadium advertising as well as other services supplied to Sports Direct by Newcastle United, are now done ‘on normal commercial terms’ and a market rate paid, are surely laughable:
Don’t forget as well, Sports Direct don’t just get a few advertising hoardings spread around St James Park.
What about the giant horrendous adverts plastered on the top of the stands?
Or indeed the giant screen which overwhelmingly is used to promote Sports Direct and related brands?
The reality is that Sports Direct have effectively been the stadium sponsor for these past 12 years. There is more Sports Direct plastered over St James Park than any other club in England gives over to a proper (paying) stadium sponsor.
The stadium advertising is just one part of the overall/overwhelming Sports Direct promotion anyway.
At every NUFC press conference SD is prominent, whenever players are signed the SD brand is on show, whenever the training ground is shown in photos/footage, the SD advertising hoardings are almost always ensured to be in the shots, whilst the official club website is also SD friendly.
If a proper market rate was paid by Sports Direct then it would be far far more than £2m, never mind the fact absolutely nothing was paid in the first decade of the ‘partnership’…
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