Mike Ashley said Sports Direct paying this for Newcastle United advertising – New information via accounts
December 2021 saw Mike Ashley begin legal proceedings against Amanda Staveley.
The former Newcastle United owner claiming that the member of the consortium now owning the football club, had broken the terms of an agreement.
That agreement saw Mike Ashley loaning Amanda Staveley £10m to cover costs incurred in the takeover transaction and Ashley now demanding immediate repayment because he claims Ms Staveley broke certain conditions on which the loan was made.
The Mail reporting in February (2022) that they had seen papers filed to the court by Amanda Staveley in response to Mike Ashley’s legal action, with some very interesting claims made regarding Mike Ashley and what his Sports Direct / Frasers did (or didn’t!) pay for the overwhelming promotion of his retail empire…
‘Details of sponsorship payments to Newcastle from Sports Direct and designer fashion chain Flannels – another Mike Ashley firm – have also been disclosed by Staveley’s lawyers.
They claim the new owners discovered only after the transaction that Newcastle had ‘not received any sponsorship fees in respect of the Sports Direct or Flannels signage for the 2019/20, 2020/21 or 2021/22 seasons’.
The issue of sponsorship rights was first mentioned in Ashley’s claim in December. In that, he said Newcastle’s new owners prematurely terminated an agreement with Sports Direct.
He said Staveley rowed back on an alleged assurance that she would ‘endeavour insofar as possible’ to maintain Sports Direct’s sponsorship deal until the end of the 2021-22 season in May. A month after the acquisition, Staveley told Ashley that the sponsorship would end.
Correspondence shows that Ashley unsuccessfully tried to prolong Newcastle’s notice period to terminate Sports Direct’s sponsorship rights from 14 to 90 days.
Staveley has said the decision to end the sponsorship was in part due to the high street retailer ‘not paying any fees’ in return for its rights.
Legal papers state ‘there was self-evidently no commercial benefit in retaining the Sports Direct or Flannels signage’.’
So, for Newcastle United fans, the key claim from Amanda Staveley was that ‘Newcastle had ‘not received any sponsorship fees in respect of the Sports Direct or Flannels signage for the 2019/20, 2020/21 or 2021/22 seasons’.’
Obviously it will be for the courts to decide what happens between Mike Ashley and Amanda Staveley BUT I think it was realistic to assume, that the claim of no payments made by Sports Direct (Frasers) / Flannels for sponsorship / advertising for these three seasons were true, because a bit daft to claim so if not, as Mike Ashley would easily be able to point to when and where the money was transferred….
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.”
Mike Ashley / Sports Direct stating above that £1m had been paid for the 2018/19 season, whilst £2m would be paid into Newcastle United in return for ‘advertising rights’ for the 2019/20 season, which is still a laughable sum anyway, considering the huge benefits they get in return. With it implied that this would then continue for future seasons, with at least £2m paid by Sports Direct for each of the 2019/20 and 2020/21 seasons and beyond…whilst the SD branding advertising remained.
So, the question is….did Sports Direct / Frasers pay £2m for the 2019/20 (and for 2020/21 and 2021/22) as Mike Ashley claimed would be the case, or was not a penny paid as Amanda Staveley states?
Well, this is what the official Newcastle United accounts have detailed in recent years / seasons when it comes to ‘Related Party Transactions’ and what Sports Direct / Frasers Group have paid into Newcastle United AND whether those amounts included payment for ‘stadium advertising income’ at St James Park.
All info on Mike Ashley and Related Party Transactions in recent seasons, taken from Companies House site, where Newcastle United are obliged to file their annual accounts for each year they trade:
Newcastle United Accounts 2018/19 season – Accounts up to 30 June 2019:
‘The company (Newcastle United) made sales (to Sports Direct / Frasers Group), including stadium advertising income, of £1,113,000…’
Newcastle United Accounts 2019/20 season – Accounts up to 31 July 2020:
‘The company (Newcastle United), made sales of £141,000 (to Sports Direct / Frasers Group)…’
Newcastle United Accounts 2020/21 season – Accounts up to 30 June 2021:
‘The company (Newcastle United), made sales of £253,000 (to Sports Direct / Frasers Group),…’
So looking at the above info from the official Newcastle United accounts and then comparing it to the Mike Ashley / Sports Direct commitment / statement of 26 July 2019, we can see the following.
Mike Ashley said £1m had been paid for the 2018/19 season and the official NUFC accounts for that season do indeed show Ashley’s company / companies paying a total of £1,113,000 for stadium advertising and other things. So it is possible that the figure could include as much as £1m for the advertising.
However, when we get to the 2019/20 season where Mike Ashley said £2m would be paid by his retail empire for stadium advertising, the official NUFC accounts show only £141,000 paid in total for all goods supplied to Frasers Group / Sports Direct and none of that meagre total even mentioning stadium advertising.
Now these latest Newcastle United accounts released this week, for the 2020/21 season, show only £253,000 paid in total for all goods supplied to Frasers Group / Sports Direct and none of that latest meagre total even mentioning stadium advertising.
So with those two seasons showing nothing at all paid by Mike Ashley / Frasers Group / Sports Direct for the 2019/20 and 2020/21 seasons with regard to stadium advertising, very difficult to believe that anything has been paid for the current 2021/22 season (those NUFC accounts will not be available until sometime in 2023) either.
Why exactly Mike Ashley promised that £2m per season would be paid into Newcastle United by his other business(es) and then not a penny appears to have been paid…a shame we don’t see the media journalists chasing this one up and pursuing Mike Ashley for answers.
The Sports Direct and Newcastle United relationship had / has been very much a case of smoke and mirrors. A tangled web totally lacking in transparency.
As well as absolutely nothing paid for most of the Mike Ashley ownership years by Sports Direct for advertising at Newcastle United (until a relative pittance was paid for a small number of seasons), there was never any true clarity / transparency about what exactly, if anything, Newcastle United benefited from the retail ‘partnership’ between Sports Direct and the official NUFC club shops. Certainly no breakdown ever made public.
Things of course reached an all-time low (high for Mike Ashley and Sports Direct), when shamelessly he renamed St James Park in favour of his retail empire, with not a single penny paid into the club in return.
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