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News and Commentary On Newcastle United Football Club By Ed Harrison, A Proud Exiled Geordie And Lifelong Fan

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Portsmouth Debts At £135M – How Much Do Newcastle Owe Ashley?

6:09 pm, Thursday, May 6th, 2010 by Dr. Ed Harrison · 11 Comments

Portsmouth’s administrators have today revealed the relegated Premier League club now have debts of £135M.


Of course in February Portsmouth, who have always been a well supported club on the south coast of England, became the first Premier League club to enter bankruptcy with debts at that time said to be between £60M-£70M.

In April, the Portsmouth club, who have amazingly, but deservedly reached the FA Cup Final, were said to be £120M in debt.

The news today is that a debt repayment plan has been approved for the club, and that will allow it to emerge from administration (bankruptcy for those in the US) and the debt is now £135M.

The club will pay at least 20 pence in the pound of its debts to creditors over a five year period appears to be the agreement reached.

Some clubs are still owed over £17M in transfer fees by Portsmouth, and in addition current and former players are also owed almost £5M in bonuses, wages and image rights payments.

What a terrible way this club has been run financially over these last several years – that this happens – and we feel sorry for the fans who seem to have been completely betrayed by those in charge.

It’s been clear for some time that those running Premier League clubs are hardly financial or business wizards, but it looks like the chickens are coming home to roost at some clubs, with Hull City possibly the next one to fold.

Our concern for Newcastle is that it was was revealed last weekend the Newcastle United club may owe Mike Ashley as much as £136M.

The loan is said to interest free, and presumably Mike doesn’t want the money anytime soon, at least we hope he doesn’t, but that’s still a lot of debt to have on the books.

We assume some scheme has already been agreed, to have the Tyneside club pay off that loan over a number of years, unless Ashley sells the club, which is hardly likely right now.

In the interests of transparency and improved communications with the fans,  we have to hope that owner Mike Ashley or Managing Director Derek Llambias will shortly reveal the status of the club’s debts.

The Newcastle United club are said to be issuing a statement before the end of this week, according to the Newcastle Journal, so hopefully the amount of debt and how it will be repaid will be clarified in that statement.

Comments welcome.



Tags: Newcastle News



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11 responses so far ↓

  • 1 Stevo // May 6, 2010 at 6:23 PM

    I’ve had a shot at this myself. Tried to keep it simple. Let me know what you think.

    http://i557.photobucket.com/albums/ss19/thedirttemple/NUFCStripV1.jpg

  • 2 peterktoon // May 6, 2010 at 6:28 PM

    http://www.nufc.co.uk/articles/20100506/tyneside-to-stateside-toon-stars-summer-plans_2240137_2044974
    Ed I hope you’ll will write an article about how good friends the players are

  • 3 nightfa11 // May 6, 2010 at 6:29 PM

    my guess is NOTHING. it’s like me wining about my car – that it owes me gas money ffs=) it’s his club..his costs. so yes..i’ll say it again..you cant owe money to yourself =)

    Stevo – not bad..dont really like the square, but overall not a bad effort =)

  • 4 Stevo // May 6, 2010 at 6:33 PM

    Sh*te wrong thread!

    nightfa11 – Cheers mate but it’s hard to work around that dreadful sponsor! The blue star looks much better!

  • 5 Newutd // May 6, 2010 at 6:49 PM

    Love it, Stevo. Simple and “clean”:)

  • 6 GeordieGerman // May 6, 2010 at 6:53 PM

    Is the question not more like. How much does Ashley owe the Newcastle Fans? What would have happened if we’d boycotted Ashley?

  • 7 toonboyjake // May 6, 2010 at 7:04 PM

    Stevo like it plain and simple.
    but do i see a small black cat at the bottom of the shirt?

  • 8 geordiebhoy // May 6, 2010 at 7:17 PM

    Ed,
    All the information about the finances of NUFC were published in the club’s balance sheet last Friday.
    The notes to the accounts confiirm Mike Ashley is owed £111m which he can now claim back on demand.Mr Ashley has loaned the club another £25.5m since the 2009 year end.
    They also owe Barclays Bank £3m on another loan and have a £35m overdraft with the bank.
    So why did we have all these claims that Ashley had cleared the debt to the bank?
    The official figures revealed last week clearly show NUFC are in the red with Barclays to the tune of £38.5m
    On their own balance sheet numbers the debt to Ashley now totals more than £136m
    And they also owe trade creditors more than £12m
    The current liabilities are running at more than £154m
    These figures are now available from Companies House and can easily be verified.
    Here is an article from the Sunday Mirror last weekend:

    NEWLY-PROMOTED Newcastle United now owe Mike Ashley a staggering £111million- a sum the owner is now entitled to claim back on demand.
    The shock revelation comes in Newcastle’s latest balance sheet which shows net current liabilities of £154.3m and a net loss of £15.2m on the 2008/09 relegation campaign.
    Apart from the £111m owed to Ashley, Newcastle also have a £3m loan from their bankers as well as a bank overdraft of £35m, while trade creditors are owed £15.8m.
    Newcastle’s wage bill- which has been slashed by an estimated £30m since relegation, was a massive £71m or 82.6 per cent of turnover.
    The figures make depressing reading for the Toon Army as Ashley prepares to sit down to discuss transfer targets for their Premier League return with manager Chris Hughton
    Ashley’s loan to Newcastle has increased by £11million over the financial year to June 2009 and since the year end he has ploughed another £25.5m into the financially-stricken club.
    But, most significantly, the sports retailing magnate has changed the terms of the loan to make the £111m payable whenever he requests it rather than having to wait until there is a change of ownership.
    Th accounts reveal: “The Group’s outstanding loan from Mr MJW Ashley of £111m (30 June 2008 £100m) is repayable on demand.
    “Under the previous agreement in force at 30 June 2008 the loan was only repayable on demand in the event of a change of control.”
    The balance sheet also highlights that the departures of managers Sam Allardyce and Kevin Keegan cost the hard-up Magpies a whopping £10m.
    But managing director Derek Lambias’ business review admits that the full financial implications of Newcastle’s season in the Championship won’t unfold until the figures for the year ending 2010 are published.
    Newcastle insist they will be ale to meet their debts with the continued backing of Ashley and their bankers.
    ENDS

  • 9 noir9 // May 6, 2010 at 7:26 PM

    The bulk of the money the club owe Ashley is the £80 million mortgage for the re-developement of SJP which had to be re-paid when he bought the club, yes he missed it by not making all the checks but effectively we now have an interest free/low rate mortgage. Just try to go and get one of those today. Pompy owe a similar total amount but couldn’t service the debt, overspent & went bust. We are one of the best supported teams in Europe, our wages are under control,new sponsers etc & a developed stadium. The figure looks frightening but I think we are well placed to take advantage of other clubs problems.

    Look at the spuds, yes their in the champions league but will need a new ground to compete & thats going to cost them £3/400 mill at least plus players & wages etc or Everton, who have done great but need more money to compete.

  • 10 baro // May 6, 2010 at 8:15 PM

    Stevo

    That doesnt really look bad, the away should be yellow. :)

  • 11 Toonmania // May 6, 2010 at 8:36 PM

    stevo,
    thats really quite good and if the real top come out anything like that i will be buying one, although i won’t if the black cat at the bottom stays on it (dirty mackem symbol!!)




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