Newcastle’s Financial Status Expected To Be Much Improved


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



Apparently the results will be released tomorrow, and Alan Pardew gave some insights today into what the results will show:

“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.

Comments welcome.



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10 comments so far

  • listie

    Mar 29, 2011 at 12:24 PM

    Comment #1

    My head is going this is all good news sound financial management. My heart is going well the old say “speculate to accumulate ” would be nice, what about a bit of adventure!

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  • listie

    Mar 29, 2011 at 12:24 PM

    Comment #2

    And 1st by the way 🙂

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  • daneevz

    Mar 29, 2011 at 12:32 PM

    Comment #3

    and gota clue bout finances i just spend!!

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  • john DSOUZA

    Mar 29, 2011 at 12:48 PM

    Comment #4

    Hope everytngs fine

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  • ToonDownSouth

    Mar 29, 2011 at 12:52 PM

    Comment #5

    @1, Its difficult isn’t it. I study Maths at uni, so my head says that a good financial footing is the place that I want to be at.

    Sometimes I think that it’d suck if after decades of highs and lows and amazing nights in the league and in europe, someone just came in and bought us a few trophies in a couple of seasons.

    But on the other hand, the reality of modern day football is that soundly run clubs just dont succeed. No matter what Arsene says about how perfectly the club’s run, they lost money last year, they dont win trophies, and they have actually spent a LOT of money on players such as Rosicky and Arshavin. Even Barcelona are in hundreds of millions of debt.

    But at least we’re not an average club in a lot of debt like Everton ‘ey?

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  • ToonDownSouth

    Mar 29, 2011 at 12:58 PM

    Comment #6

    * Meant Nasri not Rosicky. No idea where that came from.

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  • gar1969

    Mar 29, 2011 at 1:03 PM

    Comment #7

    In a way it’s fortunate that MA didn’t do the dilligence as well as he might of as he probably wouldn’t have bought the club and it would have been difficult to see anyone wanting to pay for the financial position we were in.

    There have been many mistakes during the time he has owned the club for sure but not in terms of trying to make us financially sound and self financing. We are a club that is well enough supported to be run well and challenge for honours. It will take some time and some prudent seasons like this one to get us to that place but it’s achievable.

    I don’t want to return to the days of being on the brink of collapse to sign players that are coming to get paid. I want a club that has a plan for the business and a plan for the playing staff. A strategic plan that builds a sustainable future, so that when need to buy a player or two we can buy them cash and not be looking to offload all the time.

    The fan in me wants to believe that we will invest in the close season but the cynic in me wonders if we will.

    I’ll stay a fan until the 1st of September!

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  • oldbobaycliffe

    Mar 29, 2011 at 1:21 PM

    Comment #8

    according to the chairman of wolves his club are debt free and i would think that blackpool will be pretty close because they dont pay big wages or transfer fees

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  • chuck

    Mar 29, 2011 at 2:10 PM

    Comment #9

    Something I dont get ?
    Freddy & partners = terrible businessmen.
    Ashley = good businessman.
    Freddy and pals = sell to Ash.
    Ashley =pays OTT and gets ripped off.
    Freddy and pals =laugh all the way to the bank.
    Something wrong with this equation ?

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  • cupiddstunt

    Mar 29, 2011 at 7:06 PM

    Comment #10

    Yep for a start the first part of your equation what on earth makes you think that Freddy S (estimated wealth 55-60mil) and John H (estimated wealth 75-80 mil) are terrible businessmen???

    To the best of my knowledge terrible businessmen tend not to amass 50mil + fortunes

    Ashley admitted his one main error and that was not doing due diligence and he is still paying for that mistake.

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