Financial Times on why Saudi PIF able to buy Newcastle for ‘low price’ from Mike Ashley
Fair to say that in the long long months that turned into years when we were waiting for the Saudi PIF takeover of Newcastle United to go through, the general perception was that the buyers were paying over the odds for the football club.
That is if the deal ever got to go through.
However, that perception may have been wrong, according to the Financial Times.
Their analysis suggesting that it was actually a ‘low price’ the Saudi PIF consortium ended up paying, though arguably a fair one.
They were concentrating on the capital expenditure under Mike Ashley, comparing the spending on infrastructure by Newcastle United with other Premier League clubs.
When starting their research for the article they luckily stumbled on a table that had been compiled by our old friend, the excellent Kieran Maguire, who lectures in football finance at Liverpool University and also has his own website and Twitter account specialising in the business of football.
The infrastructure / capital expenditure is money spent on such things as training ground and Academy facilities, as well as stadium building / rebuilding / expansion / improvements.
The Financial Times after seeing the table below which details 2011-2020: ‘To be honest, it was even worse than we realised’…
As you can see, Mike Ashley at the very bottom of the table when it came to building for the future, only a total of £8.3m spent on the most essential repairs and maintenance over an entire decade, every other club / owners showing more ambition in their club investing in the future.
The Financial Times make the points (as we have done so often at The Mag), that it is essential to have the very best best training facilities and sports science, the very best Academy, the very best well maintained and biggest stadium possible, if you are going to be able to compete.
As for if you don’t do these things listed above, if you refuse to make the essential investment, the FT then pointing out what the repercussions are for your football club…
Attracting the best local young talent, especially from the region, and developing it, becomes so much more difficult…impossible?
Attracting signings with overwhelmingly outdated training facilities and other missing associated stuff that modern day players expect, becomes very difficult…impossible in many cases?
Your once shiny newly expanded stadium shows the wear and tear after 20 years, with most of those years when Mike Ashley has refused to spend the proper money maintaining and improving it. As well as a refusal to look at ways of expanding St James Park, meaning countless clubs now have bigger capacities.
The Financial Times coming to the conclusion that this lack of capital expenditure under Mike Ashley may well explain the ‘relatively low price’ the Saudi PIF consortium have paid for Newcastle United.
With the new owners needing now to spend the money on infrastructure that has suffered from over 14 years of neglect.
The FT say that obviously putting everything right won’t happen overnight and the comparisons with Manchester City are understandable, where it did take time to build their club on and off the pitch.
After over 14 years worth of Mike Ashley, Newcastle United fans will simply see everything that now comes our way as a positive, in terms of however long it does take, each step taken by the new Saudi PIF owners to correct the neglect, will be seen as a step forward.
It is far too easy to think that it was just the current team (and manager / head coach) on the pitch at any one time where Mike Ashley was failing to show any ambition.
These stats though on failing to invest in the infrastructure are damning on Ashley’s ownership.
In 2013 Mike Ashley promised that a new essential state of the art training ground was to be built as soon as possible, yet eight years later not one brick has been put into place.
At long last we are now going to see plans laid down by the new Saudi PIF led ownership, for that all to change.
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