Reports Of Ashley £25M Newcastle Loan Not New


There is a report in the News Of The World (NOTW) today that Newcastle owner, Mike Ashley, made an emergency £25M loan to the club in December to keep Newcastle afloat.

Mike Ashley – interest free loan to Newcastle

But we wonder whether this is a new story, because in late October there was a report that Mike loaned Newcastle £20M for new players and the general running of the club.

Maybe that was the same payment being reported today.

Newcastle brought in 6 players during the January transfer window, and it seems the 4 players the club actually bought may have cost around £4M.

NOTW is reporting the owner arranged an interest-free loan so that the club could meet the players wage bill, buy new players, and help with the general expenses of running the club.

Of course if all goes according to plan and Newcastle get promoted in May, the Tyneside club will be back to £100M revenues, and the club will get over £40M alone next season from the world-wide TV revenues the Premier League generates.

And it seems the PL games are becoming even more popular around the world.

The Newcastle wage bill is now somewhere around £40M, maybe less, and that compares to the £74M it was in the Premier League last season.

Newcastle will also be getting their second and final parachute payment of £11M in August from the Premier League, and that will help the Newcastle finances greatly, and it also comes at a good time.

The NOTW  is reporting that Newcastle are still owed around £9M from the sale of Obafemi Martins, Damien Duff and Sebastien Bassong last summer.

But don’t necessarily believe the NOTW when they then assume that money will go immediately to pay off Mike’s loan in August.

Since the loan is interest free, why not pay it off over a couple of years, because we will need around £20M at most for new players in the summer.

That’s if Mike stays put at Newcastle of course, and we have no idea what his future plans are.

That proverbial club source – is again quoted by the NOTW  – maybe it’s Derek Llambias?:

“Mike did not want people to know about the loan he put into the club in December,””If he had not done that, who knows what could have happened? “

“The only other possible option would have been to have arranged an outside finance deal and the interest rate for that would have been around 20%, which means you’ve lost another £5million straight away.”

“Mike has committed more money to the club. It is a secured loan, interest free and it had to be done.”

“There is a shortfall of around £50M because of relegation. The club had to bring some payments forward. That is not unusual.”

“Doing this was the only way the club could operate. All the previous sponsorship money had been spent on the Michael Owen deal before Mike Ashley even bought the club.”

“That deal alone has cost Newcastle £44M. The TV money went with relegation, the retail income has gone, the commercial income has been cut. The money has to come from somewhere and that is why there had to be an injection of £25M at the end of last year.”

The revenues have dropped from £100M to £50M, but that doesn’t mean the shortfall is £50M, because Newcastle have reduced their running costs.

And we were well aware the sponsorship money was all used to buy Michael Owen, and that’s not good financial management to say the least.

Michael’s move turned out to be a disaster for Newcastle, but it was hailed as a great move at the time – we were certainly excited when Owen signed.

The wage bill has been culled by around £34M, and we’re sure other thrift strategies are in place at Newcastle, so we doubt the shortfall is as much as £50M, although it will be huge – no doubt..

It does mean the club can be in fairly good shape financially, because if we are promoted, there’s no way the club will ever approach that wage bill of £74M ever again, and they shouldn’t either.

So assuming we are promoted there may be a silver lining, at least on the financial front, as Newcastle finally get their costs under control.

And we don’t even think it will necessarily take £20M to get in new players in the summer, if we can strike some great deals like we did to get players like Seb Bassong.

We also have to expect some of our younger players like Tamas Kadar and Nile Ranger to be even better next season.

Comments very welcome.



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27 comments so far

  • mylestoon

    Feb 21, 2010 at 1:57 PM

    Comment #1

    What sort of money can you look at next season if were promoted?

    Money for promotion
    TV revenue
    Last parachute payment

    Should come to around £110M if im correct?

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  • jasonbourne

    Feb 21, 2010 at 2:10 PM

    Comment #2

    I hated Mike Ashley last year, but now I’m not sure anymore. A lot of football clubs are near bankrupt in the PL and CCC. I can see now why Keegan didn’t got the money he demanded to buy players almost two years ago in the summer transfer window. The wagebill were rediculous high. In other words there were now money, and maybe, just maybe, we were to quick to jugde Ashley. We fans often forget an importen side of football called economy, because of our big passion for the game.

    Liverpool are now the new Newcastle scenario in my opinion, with hugh debt and outside of the top four. That mean no CL, no money and no signings signings in the summer. That’s exactually the same thing that happen to Newcastle. Mike inherited a club in financial trouble, and it seems that he will get us out of it. It’s more enjoyable watching Newcastle winning games in CCC and moving forward in the right direction, then to se them go bankrupt with overpaid bad players.

    Yes, I am aware of the bad hirings and things Mike have done, but in the end would a good manager go to a club with no money or in a mess? I doubt it.

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  • Tom4Nufc

    Feb 21, 2010 at 2:15 PM

    Comment #3

    I am confused about that Owen deal because as far as I was aware, Real Madrid basically offered us Owen as means of paying for the Woodgate deal… Am I wrong or missing something?!

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  • MacToon

    Feb 21, 2010 at 2:26 PM

    Comment #4

    So what happened to the Milner money? Zog, Bassong, Oba … etc?

    There is no way they expected 40 K (average) at home matches so extra revenue there too…..I thought they budgeted on 25K attendances.

    If you think we can get more “Bassong” signings to help us in the prem well think again, they don’t all work like that and usually the opposite (pay more than they are worth).

    If promoted we must buy or we’ll be back down the following season.

    Something doesn’t add up!

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  • stuart no9

    Feb 21, 2010 at 2:50 PM

    Comment #5

    sadly, i will never trust fat slob.he has shown over the last 18 months, how he can lie to us,laugh in our faces, at a time,when we needed our owner to come out and tell us what the hell was going on at our club putting the club on the market ,then off it , yhen back on again, causing a lot of unrest between the fans , players, staff, which other owner would do that to their fans ?i am always looking for an alterior motive in every decision he makes ,it made me smile when derek lamparse said , he (fat slob) didnt want any body to know about the £20,000000 he put into the club,yeah, how come the whole world and his dog know about it then, trying to fool the fans again, i think he” s in for a shock when he realises how much he has to spend if we go up, and that is just to compete in that league, i hope he dosnt listen to you on that score ed, £20,000000 at most ? and the rest, that may have been the case 10-15 years ago sadly , double that now, at least

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  • will die for the toon army

    Feb 21, 2010 at 3:10 PM

    Comment #6

    I dont care what all you say but I have loved MA abd hated him at times but it will be sad to see him go. He is a man who stands by his principles dont get me wrong but he set his standards and he will fulfill them if given time.

    KK and AL wouldnt wait and know the pride they both have and to put that aside they are big personalities to MA. I still think bring KK back was a mistake we shld have taken our Dechamps and have moved on.

    MA is not good with the fans but he is the best owner we have ever had. I dont want him to leave I will give him my support.

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  • nightfa11

    Feb 21, 2010 at 3:19 PM

    Comment #7

    sure it’s understandable why keegan didnt get the money…cos’ of 74mio wage bill, also cos england didnt qualify for EC 2008…so ashley’s business lost over 200 mio i think..plus with the economical crisis & all… we cant really blame the guy…he did what 99% of you would do in his shoes..in such circumstances..

    remeber, ashley went for 2 billion to 800 mio in a year…i think that says it all.. who of you wouldnt panic & not invest 100 mio into the club?

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  • brandyalex

    Feb 21, 2010 at 3:35 PM

    Comment #8

    we don’t get the second parachute payment if we go straight back up though. It gets shared between next seasons championship clubs

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  • MacToon

    Feb 21, 2010 at 3:54 PM

    Comment #9

    Yeah, poor Ashley, found out to be a liar to us all and the way he treated KK and AS.

    He’s been a poor owner from the moment he bought the club. He’s only protecting (what’s left of) his assets with no care of anything but £££’s.

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  • stuart no9

    Feb 21, 2010 at 3:57 PM

    Comment #10

    reading the last 2 comments, i understand he has lost a few quid over the last year- 18 months, how he has lost it, and how much has nothing to do with the fans, why should we suffer,because of his, bad luck , dodgy deals, poor judgement, or whatever the cause, if he had no money to run a football club he shouldnt have bought one, everyone is responsible for their own financial predicament, and he is no differant, so as a gesture to thefans why dosnt he sell to someone who can afford to run it and give the fans what they deserve, cos one thing is for sure we dont deserve to be going through what we are now , so i think selfish could also be a charataristic of his

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  • nightfa11

    Feb 21, 2010 at 3:59 PM

    Comment #11

    MacToon – thousands of people still work for him u know…if he loses everything…thousands of families lose everything… so stop acting like a spoiled brat!

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  • stuart no9

    Feb 21, 2010 at 4:01 PM

    Comment #12

    mactoon
    spot on mate

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  • nightfa11

    Feb 21, 2010 at 4:02 PM

    Comment #13

    stuart no9 – he lost over a billion in 18 months.. how could he perdict that will happen?.. if he knew that of course he wouldnt have bought the club.. why do u think he tried to sell it?

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  • TheHeyman

    Feb 21, 2010 at 4:17 PM

    Comment #14

    Overdraught: 20million
    Players: 4-5 million
    Total: 24-25million

    Why pay interest to the banks when he could pay himself interest from the club. If he decides to sell in the summer, then MA will max out the overdraught gaining the 20million back and pass the clubs debt to the new owners. This is a guess but we do know the club have this overdraught facility. Why pay interest which I would imagine would be sizable. He could then use leak the loan details to look good in having to loan his own club money for “operating costs”.

    A guess mind but if I owned the makems, it’s what I would do!

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  • NewcastleMole

    Feb 21, 2010 at 4:35 PM

    Comment #15

    @Tom4Nufc

    As far as i know Shepherd spent all the Northern Rock Sponsor money on signing Owen.

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  • stuart no9

    Feb 21, 2010 at 4:50 PM

    Comment #16

    nightfa11
    he couldnt have predicted that so, like i said in my comment, it was bad luck, why didnt he sell when he had the chance? because he wanted £400,000000 for a club worth half of that, these arabs have money ,but they are not stupid are these arabs the same ones who then went on to buy man city? if MA has any thing about him, and he cant run the club, give it to someone who can, no excuses now, he is well aware now of the economical climate and should value NUFC accordingly, then with a bit of luck,get rid of him for good

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  • MacToon

    Feb 21, 2010 at 5:05 PM

    Comment #17

    nightfa11, what on earth are you talking about? If he loses £2 billion in 2 1/2 years yeah alot of people would suffer but he hasn’t. He runs 2nd grade clothing company and runs SJP the same way.

    I’d rather be a spoiled brat than an ignorant twat!

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  • Ketsbaia

    Feb 21, 2010 at 5:23 PM

    Comment #18

    Stuart No 9 and MacToon – I understand your anger towards Ashley but you talk about him giving the club to someone who can run it. Realistically there is no one in the world who has the money to run the club in the way our fans demand except the City and Chelsea owners. Not all Arabs have money – look at Portsmouth’s owners and look at the fact that Dubai where a lot of the supposed money was coming from is defaulting on billions of pounds of debt.

    The global economy has changed. Portsmouth, Liverpool, West Ham and no doubt others are learning this the hard way.

    The transfer money that has come in is being used to pay out old transfer fees and wages which exceed our revenues. I don’t think there is any great mystery to that.

    What we need is stability and someone who is willing to pump in money to keep us running (remember Portsmouth couldn’t pay the electrity bill or their tax bill) until we become a viable business that can run itself.

    The whole financial structure of football is changing as demonstrated by the Jan transfer window during which we, a Championship Club, were responsible for 10% of all the transfer fees paid…

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  • MacToon

    Feb 21, 2010 at 5:28 PM

    Comment #19

    Ketsbaia, I do hear what you say and ofc I agree we need stability etc but we have not been run well recently and there are again doubts about next season. I hope Ashley can turn this around, either by keeping his head down, getting us back in the prem and make us a decent team in the prem or sell the club to the right person who will be able to do this.

    I still think all he cares about is £££’s and that’s a shame because this is a great football club with a proud history, so far Ashley hasn’t added to this in a positive way….. yet?

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  • MacToon

    Feb 21, 2010 at 5:53 PM

    Comment #20

    http://www.thenorthernecho.co.uk/sport/football/5019917.Can_Ashley_ever_win_back_the_Magpies_fans_/

    I rarely say never……..

    In my experience it is difficult to trust someone once they have been found to lie, there can always be a doubt about everything they do or say.

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  • chuck

    Feb 21, 2010 at 6:54 PM

    Comment #21

    How many times will you lot rake over this history, with everyone giving his (usually) un substantiated version of what took place, it`s becoming very boring, with some versions bizarre.
    With the present worldwide financial meltdown, with many shoes yet to drop (the present situation in Greece, Spain and Portugal) it has become virtually impossible to obtain loans of the magnitude wanted certainly the likes of those required by UK football clubs.
    Therefore the best they can do in most cases is re-negotiate presently owed money, by extending the length of time for a lower rate( to put it in it`s simplest terms)
    As far as Ashley is concerned, it`s probably a bit of a “ponce scheme” a no interest loan to the club by shifting money within his empire, in order not to have to borrow (if in fact he can)
    at outrageous rates from the banks.
    Least that`s my unsubstantiated version.

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  • pavel

    Feb 21, 2010 at 6:58 PM

    Comment #22

    1. The comments about understanding not giving Keegan money to spend would make more sense if they hadn’t been giving Wise money to spend. Xisco, Gonzalez, anyone?

    2. I don’t understand any sympathy for Ashley putting money into the club. Relegation was entirely down to the circus he turned the club into, the losses are his fault and so now he is forced to put money in to try to protect his investment.

    People seem to be pleased with Ashley because he has made us into a good Championship side. We’re in the position the Mackems have been for years and we laughed at them.

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  • Widiculuss Wichard

    Feb 21, 2010 at 11:02 PM

    Comment #23

    nightfa11… are you dewek wambias?

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  • nightfa11

    Feb 22, 2010 at 1:14 AM

    Comment #24

    @Widiculuss Wichard

    ;D

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  • Ketsbaia

    Feb 22, 2010 at 2:39 AM

    Comment #25

    MacToon – you make a good point when you write: “sell the club to the right person” I’m totally with you on this. As much as I think it is impossible for Ashley to ever win back the fans, the worst case for the club has got to be him selling to someone who destroys us. Let’s be honest, with the exception of maybe Randy Lerner, the Villa owner, there aren’t many other owners I would be keen to trade for. Glazers? Gillet and Hicks? Al-Fayed? Any of Portsmouths 5 owners this season? The Icelandic owners who almost killed West Ham? The Hull City Chairman who was actually taking money out of the club and spending it on personal stuff? Thaksin Shinawata? Notts County’s mystery billionaires?

    I would love it but I just can’t see Bill Gates or Warren Buffet putting in a bid…

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  • MacToon

    Feb 22, 2010 at 2:59 AM

    Comment #26

    crikey, still going….. Ketsbaia, fingers crossed all the way whatever happens.

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  • Ketsbaia

    Feb 22, 2010 at 3:02 AM

    Comment #27

    I’m with you mate…

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