The Financial results of the Newcastle club, to be released shortly, will show Newcastle have the lowest debts of any club in the Premier League, according to some reports today
“We release our figures on Wednesday from the Championship year, which I am hoping will read well and obviously with the sale of Andy Carroll we are starting to redress some of the big financial problems that there were here.”
“Under their regime, their brief to me has been one where we need to sign younger players that carry value and that the club financially is on a stable footing and that it isn’t put at risk.”
“Having said that we want the best possible team we can get and my job is to put pressure on Mike and Managing Director Derek Llambias to give me the best possible opportunity to make the best team I can, and hopefully challenge at some point for trophies and for Europe.”
Of course the story is that when Mike Ashley bought the club back in June, 2007, he did so without doing the necessary due diligence, which is usually carried out over a number of weeks, before a major acquisition.
That’s so you understand exactly what you are getting, and there are no surprises.
And of course what happens when you don’t do the due diligence, is you get a few shocks as per Murphy’s Law (if things can go wrong they will), and one of them was that Newcastle were £100M in debt.
The other surprise was the income from Northern Rock for future years, was already committed to pay for Michael Owen’s transfer from Real Madrid, so the financial way in which the club was being run by Freddy Shepherd was hardly fiscally sound.
So not only were the club in huge debt, but future income was already spoken for, and how’s that for running the club from a financial viewpoint?
The answer is – terrible.
The news was that Mike Ashley loaned the club over £100M, so at least Newcastle do not have to pay any interests on their debts, like other clubs like Manchester United, whose interest charges each year are over £40M.
The early news is that Newcastle will have reduced their debts by £17M, but quite honestly that seems a small amount.
I’m looking forward to seeing just how stable the Newcastle financial situation is, when the results are announced tomorrow.
I know a little about finances, from my time at running a fairly big business for IBM, and can be just a little dangerous on finances because of that.
But we’ll all know soon enough – let’s hope the results are as good as they seem to be.