Mike Ashley’s Money Keeping Newcastle Afloat

The big news today is the Newcastle Journal is reporting that the Newcastle club are losing £500K a week in the Championship.

Mike Ashley – keeping Newcastle afloat

Mike Ashley cut back drastically once the club was relegated and cut the staff at the club, and in the process sold several players to cut the wage bill last summer.

The wage bill was £74M per year and according to reports it has been reduced to around £40M, but since the revenues in the Championship are only around £50M – about half of what they are in the Premier League, it’s hardly surprising Newcastle are losing money.

Of course this cannot continue long term, which is why it’s imperative that Newcastle clinch promotion this year, otherwise we’ll have to sell some of our big wage players – and there will go one of the advantages we have this season.

There were reports last weekend that Ashley had already put £25M into the club and he may have to dig deeper before the end of the season, although Newcastle’s fantastic home corwds will be helping a little.

A senior Newcastle United source said:

“Newcastle United couldn’t survive at the moment without Mike’s money, it’s as simple as that.”

“If Mike and the banks weren’t willing to cover the cost of relegation Newcastle may well be in a Portsmouth situation.”

“It is costing Mike £500K a week this season to keep Newcastle running without making further cutbacks, yet some people are saying the club should be able to wipe its own mouth, that it should be able to run by itself with the income coming in.”

“You can not lose £50m in revenue and expect not to have to take a hit, particularly when you have the overheads Newcastle have.”   “The wage bill was reduced, but it’s still way too big for the Championship.”

It’s unclear whether the money Ashley has loaned to Newcastle will need to be paid off – but we think it will, because our understanding is that Mike has given the club a loan and didn’t want any interest on that loan.

This news should be embarrassing to the NUST, because one of their members had said that Ashley was culling £7M a month from Newcastle, and he told others to do the maths.

Well we suppose he wasn’t concentrating during his maths classes, because how Mike can make £84M a year when the revenue at the club is just £50M is beyond us.

It was an embarrassing gaff by one of the NUST members.

It’s as embarrassing as their poll, in which they say 96% opposed Ashley, and we just never believed those figures..

We are not Mike Ashley fans in any way, and we are willing to support the NUST, but in our own poll – which is still open – it’s 47% for and 47% against Ashley right now.

We well understand lots and lots of  Newcastle fans hate Ashley for the multiple gaffs he’s made at the club, but this stuff doesn’t help anybody.

The main thing now is for Newcastle to get promoted, because if we don’t, our squad will need to be cut in the summer, and it’s the big wage earners who will need to leave – like Coloccini, Smith, Nolan, Barton, Gutierrez, Enrique and others.

You see what we mean.

21 comments so far

  • Aza9

    Feb 25, 2010 at 11:08 AM

    Comment #1

    Oh the infamous insider…when are the clubs accounts being published for the last year and we can see for ourselves? I would be surprised if we are actually losing that much per week. What do you guys think?

  • geordie_india

    Feb 25, 2010 at 11:10 AM

    Comment #2

    I think mike should be given a chance to prove himself. He’s doing it right now and should continue to support chris where ever he wanted. I think mike has learned the lesson(finger’s crossd). He should also consider to give nust a portion in the club for a place in the management.

  • Geordiedoonsooth

    Feb 25, 2010 at 11:14 AM

    Comment #3

    I couldn’t give a monkey’s chuff as long as we get promoted and then stay up.

  • spiderpig

    Feb 25, 2010 at 11:18 AM

    Comment #4

    how can 2 opinions be so far out.just shows you cannot beleive anything thru the media.just glad we are where we are.top of the league,and everybody happy.

  • derekm

    Feb 25, 2010 at 11:19 AM

    Comment #5

    Remember when the club was for sale all summer? The asking price was £100 million AFTER the big earners had left the books, AFTER Barclays had agreed an overdraft facility based on projected home gates of 25,000, and on the basis that Ashley had paid off all Shepherds ridiculous spending.
    I recall that when John Hall redeveloped St James the club had an interest free loan from Northern Rock that finished in 2014, and Ashley had settled this last year. So here’s my question – how can a club that so obviously still rakes in money week on week, has financially adjusted drastically after relegation, has pulled more telly money than any other championship club this year still be losing that much a week? Believe what you want, but a ” leak ” along these lines smells of a hidden agenda somewhere, and has more to do with Ashely’s global business or his personal wealth planning than reality.

  • buddy

    Feb 25, 2010 at 11:27 AM

    Comment #6

    has to be utter bollox and most likely leaked by ashleys cohorts.
    Yes we only have a revenure of 50 million but we have also sold well over 40 million worth of talent in the last year alone…..we also have parachute payments coming in as well as a much higher attendance than expected so i reli cannot believe that we are losing anything never mind 500k a week. doesn add up

  • dows

    Feb 25, 2010 at 11:33 AM

    Comment #7

    He gave us a loan of £25M according to the papers. On the basis that there are 52 weeks in a year, that essentially works out at just under £500,000 a week. Isn’t this just old news?

  • Davies

    Feb 25, 2010 at 11:38 AM

    Comment #8

    Whilst I’m not an Ashley fan, I don’t mind if he decides not to sell in the summer, as long as we get promoted and he continues to back the manager.

    I don’t know what the total costs of running a club are (and I doubt anyone else here does), so we could well be losing £500k a week at the moment. Thanks for the cash Fatty. Keep it up.

  • Aza9

    Feb 25, 2010 at 11:38 AM

    Comment #9

    If we are losing 500k a week, surely this would have been project accordingly at the start of the season hence why we sold bassong 10mil, martins 7mil, beye 2/3mil, duff 3/4mil. It definitely doesn’t add up at all.

  • vivadavidkelly

    Feb 25, 2010 at 11:53 AM

    Comment #10

    whether those figures are correct or not. one thing is for certain. he has pumped millions into our club which has kept us afloat. no club in the history of the championship has had a wage bill even close to ours so its bound to have a massive effect on us. all he gets in return is abuse. everyone knows, including himself, he has made mistakes, but this get out of our club stuff is getting boring now and again sung without any real thought to be honest. i still say he has done more for this club then he is given credit for financially

  • komfort

    Feb 25, 2010 at 12:00 PM

    Comment #11

    and the band played believe it if you like……when’s the next accounts due out ?.

  • stevt03

    Feb 25, 2010 at 12:20 PM

    Comment #12

    Just to point out that I don’t think there are ANY first team players in our squad that wasn’t given a contract whilst Ashley was in charge (correct me if I’m wong)! Whatever the players are getting paid is his own doing!

  • maggpie

    Feb 25, 2010 at 12:46 PM

    Comment #13

    There are people coming on here who clearly are unlikely to understand their household finances, never mind those of a medium sized private limited company. I am an accountant and I find the notion of losing £500K entirely believable, and you actually don’t need to be a financial genius or indeed very smart to agree.
    When in the Premiership our total overheads were around £100m with salaries c £70m of this. At that time we were no the whole not profit making as our revenue was around £100m. To be losing £500K a week equates to £26M a year, so for that to be true, all that needs to have happened is for the revenue to go down by £26M more than the costs have gone down. I think that ‘s highly likely, and for example would reconcile with costs down £30m and revenue down £55M, the latter being a plausible figure given the drop in matchday, TV and merchandising revenue. You can bleat naively all day about what are they spending 40,000 gate receipts on, but if you look at the way I am, it would be surprising if the club wasn’t losing £500K a week.
    Another falacy is that of the club being debt free. We might not owe as much or even very much to third parties, but we owe well over £100m to Ashley. That is a debt, and just because it is owed to him doesn’t stop it from being a debt. What it does do is present is with a very sympathetic creditor in Ashley, who doesn’t charge interest and unlike HMR&C (e.g Pompey) doesn’t seek to wind us up.
    Now I’m no Ashley fan but he might just now be our best way ahead, and a lot of people might have to get used to that idea, especially as I think the NUST nonsense is an unrealistic fantasy.

  • buddy

    Feb 25, 2010 at 12:56 PM

    Comment #14

    what about the 40 to 50 million from sales and the attendances being higher than expected! should this not more than compensate for the revenue decreasing especially seen as the salaries have nearly bin halved as well as the parachute payments??

  • komfort

    Feb 25, 2010 at 1:10 PM

    Comment #15

    bright spark @13….it appears the club is financially valueless so how can fatty expect to get £100 mil for it + his £100 mil loan back ?…..

  • komfort

    Feb 25, 2010 at 1:18 PM

    Comment #16

    fat man wont be giving away these millions for the good of his health + he had the chance to unload it onto that clown – barry the singing fish man – but chose not to……i dont think the situation is anywhere near as bad as people are making out.

  • MacToon

    Feb 25, 2010 at 1:18 PM

    Comment #17

    idd komfort.

  • komfort

    Feb 25, 2010 at 1:52 PM

    Comment #18

    anyway , portsmouth will be in the championship next season debt free & probably looking to bounce straight back up !……not bad for a club in so much trouble…

  • bill

    Feb 25, 2010 at 3:17 PM

    Comment #19

    MA put us in the sh*t, so it’s up to him to get us out of it.

    As far as the running costs go, I don’t believe anything the club says anymore, even if its true. That is the state mind these people have caused by lying in the past.

    If he wants to go into administration, then bring it on, and we will buy the club and be rid of the ars*hole.

  • ksmit

    Feb 25, 2010 at 3:40 PM

    Comment #20

    Well on the bright side, at least we still have the 15 odd million that we got for the Milner sale to use… We were told that this money was going to a transfer kitty right? —- I honestly can’t believe that the amount lost is that extreme. We have cut the wage bill by a massive amount and while our revenue has gone down significantly there was still the large increase in funds from the outgoing transfers. If you look at the amount coming in from transfers as opposed to the amount going out since MA arrived you’ll notice that there is a MASSIVE difference between the two. The amount that one player (Milner) was sold for has never been re-invested into the squad.

  • jackdnufc

    Feb 25, 2010 at 9:22 PM

    Comment #21

    bill- “I don’t believe anything the club says anymore even if it’s true”- nice.


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