Mike Ashley Loans Bail Out Newcastle Club


Some of Newcastle United financial results have been reported this morning and generally they lead to some grim reading, but that was to be expected once the club was relegated two years ago.

Mike Ashley – his interest free loans were a life-saver

There are a couple of things that jump out from what we’ve been able to understand from the club’s financial figures.

One is that the club was managed very well financially in the Championship season, and the second is the club  couldn’t have survived but for the interest free loans given over by owner Mike Ashley, when the club needed them.

Here are some of the major financial figures that we’ve been able to gather so far,  in no particular order:

  • Revenue (Turnover) went from £86.1M in the relegation year to £52.4M due to a big reduction in TV rights – that;s a 39.5% drop
  • Television fees fell by by 57%, from £37.6M to £16M – so you can see how important it is to be in the Premier League
  • The wage bill was cut from £71.1M to £47.5M – a cut of around a third.
  • Wages – £47.5M  –  were a massive 90.6% of the total revenue of£52.4M. which of course was unsustainable without Mike Ashley’s loans
  • Newcastle ow a total of £150M, and £139.8M of that was to the owner. The Ashley loans are interest free, and will continue that way
    As an example at 5% that’s savings of around £9M a year, and that’s a low interest rate.
  • Corporate hospitality revenue fell to £2.8M from £6.7M – about a 58% drop
  • The club made an overall loss of £17.1M, up only slightly from the £15.2M in the relegation season, and that shows the excellent financial management
  • Commercial income, including sponsorship and catering, dropped by around 20% to £15.4M from £19.4M
  • Total operating costs were cut from £98M to £74.4M – around a 25% decrease
  • Revenue from season tickets dropped by £4.6M, but that’s all we know so it’s hard to know the percentages
  • Wages to revenue (turnover) increased by only 8%

The accounts show very clearly, that although Mike Ashley is not liked my most Newcastle fans, there is no way Newcastle could have kept their good players last season, and in so doing got promotion at the very first attempt, without Mike Ashley’s financial help.

And notice the man is not making one cent of interest on the massive loans he has given to the club.

The accounts also show that Mike Ashley came in and paid off £25M that that was owed to banks, and also advanced the club £13M in transfer fees it was still to receive for players sold in the summer of 2009.

It even seems to us the very difficult situation was actually managed very well by the club, because it’s hardly an easy thing to do, when your revenues are cut by almost 40%.

So that’s the nightmare of relegation for you – let’s hope we win on Saturday.

😀

Managing Director Derek Llambias said this today:

“Our overriding aim in 2009/10 was to secure promotion back to the Premier League at the first attempt. Relegation presented a considerable challenge for us financially.”

“With such a marked reduction in turnover, largely due to reduced TV and media revenue, we needed to cut our operating costs accordingly without jeopardizing our ability to return to top-flight football straight away.”

“We succeeded in reducing our wage bill considerably whilst maintaining the basis of a Premier League squad.”  “It has been a significant achievement to keep our overall loss at a level similar to the year before despite the impact of relegation.”

“And our ability to do this has been helped immeasurably by the continued financial support of Mike Ashley, who injected a further £42M into the club last year interest-free.”

The Newcastle club was also helped enormously by the attendance at home gates last season, with the average attendance being 43,388, and that was the 4th highest attendance in England, while Newcastle were a second division side,  and more than one million fans visited St James’ Park during the Championship season.

That’s an amazing statistic that clearly shows the support of the Newcastle fan base.

We had always thought the club should have sold more of their players in the summer of 2009, just so they could make ends meet, but we didn’t know at the time that Mike Ashley was willing to loan the club big money to keep them above water.

The fact that happened and that Newcastle got back to the big money league, in their very first season down below,  is now a terrific good news story.

It’s sometimes hard to praise Mike Ashley, that’s true, but if it weren’t for his timely loans last season, the club could never have prospered as well as they did last season.

Comments welcome.



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53 comments so far

  • JohnnyBrookes

    Mar 30, 2011 at 10:10 AM

    Comment #1

    I just read we are getting a 20m transfer kitty this summer?!!

    Really? So to help with the sale of a blatant future England star, we are getting 15m less than what we sold him for. What happened to “It will all go on players”

    Total BS as usual from the club

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  • ASTORIA

    Mar 30, 2011 at 10:13 AM

    Comment #2

    It makes sense for him to use his own money rather than pay back huge interest, it’s his money and he’ll get it back. I paid off a credit card using my savings then set up a DD back into my savings account for the same reason. Fair enough it wasn’t £100M but the economics are the same, it’s just good business sense. He is simply protecting his investment.

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  • Stuart

    Mar 30, 2011 at 10:13 AM

    Comment #3

    calm down Johnny, no-one knows how much we’ll get in the summer til it happens. Wait til then to complain.

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  • oldbobaycliffe

    Mar 30, 2011 at 10:19 AM

    Comment #4

    ed-you praise ashley for keeping us going but you dont mention the part played by the supporters who supported them despite relegation also what about the money they received as parachute payment.

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  • nufc64

    Mar 30, 2011 at 10:26 AM

    Comment #5

    I’m going to be the odd one out here. I think from a financial perspective, Ashley is doing a great job. It doesn’t matter which club you are, things cannot carry on the way that they are in football. Where the club does fall down is on the communication front, but does anyone ever see Ashley give any kind of interview ever!! The answer is no. He may be a cockney, but he has kept the club I love above water and believe me it wont be too long before a few go to the wall and it wont be us. The current wagebill along at the stadium of plight is 88% of their turnover, now that is unsustainable. Even if the richest man in the world came along and bought the club, he will still have to operate within guidlines laid down by Fifa over the next few years, when these new rules kick in. Just wait and see the fire sales at Man City and Chelsea. I think the squad will be strengthened in the summer, but we’ll have to wait and see by how much, but I will still support my club no matter who is in charge.

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  • JohnnyBrookes

    Mar 30, 2011 at 10:27 AM

    Comment #6

    Stuart I will :)!! Ha ha its just frustrating though, my personal slant on this revealing of figures is an exercise in lowering people’s expectations of summer spending.

    It just seems odd, just keep it in house, no need for the world to know. Why would anyone want to know, we just follow the team not the finances.

    I have sed I will give them a window to change my mind. I think that’s fair really.

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  • Stuart

    Mar 30, 2011 at 10:27 AM

    Comment #7

    OldB,

    Theres a whole paragraph on the fans lol.

    ‘The Newcastle club was also helped enormously by the attendance at home gates last season, with the average attendance being 43,388, and that was the 4th highest attendance in England, while Newcastle were a second division side, and more than one million fans visited St James’ Park during the Championship season.

    That’s an amazing statistic that clearly shows the support of the Newcastle fan base.’

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  • wynsleap

    Mar 30, 2011 at 10:28 AM

    Comment #8

    So – let’s all bow down to the great man himself and thank him profusely for what he has done for us.
    Llambias says “Our overriding aim in 2009/10 was to secure promotion back to the Premier League at the first attempt”.
    So he goes on to sack the man who helped him do that!!
    For all this money that Ashley has kindly put into the club why didn’t he reduce the value of the club by the same amount, sell it and save himself all the hassle, because all this sounds as if it HAS been, and still is one great hassle and sacrifice to the Controller.
    If the value of being in the Premier League is so vital in terms of financial stability why are we still facing the prospect of relegation AGAIN due to lack of player investment ie selling Carroll and bringing in ‘has beens who never
    were’ like Kuqi.
    We are now told that in two years time (if we stave off relegation) that we should be able to generate £10 mill. per season for transfers. That should just about buy Carroll’s bootlaces back.
    The future’s not black ‘n’ white – it’s black.

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  • super bartooon

    Mar 30, 2011 at 10:29 AM

    Comment #9

    Mike Ashley played a big part in getting this club relegated and boy did he play a big hand in getting this club back….90% of the clubs revenue was spent to finance wages for premier league quality players in the championship.

    Imagine if the club was being run by Shepherd we would have done a charlton or a leeds no doubt, I for one have no doubt am happy we are being run by financial estute men although lacking in common sense in many occasion.. atleast we are getting financial stability.

    PS I wasn’t paid By Mike Ashley to say what I just said just my opinion

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  • Stuart

    Mar 30, 2011 at 10:30 AM

    Comment #10

    Arent these figures just being released because its the end of the financial year or something?

    Im the same as you though, this upcoming window is make or break. Either we see significant investment or I join the ashley haters bandwagon.

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  • roe997

    Mar 30, 2011 at 10:30 AM

    Comment #11

    i can imadgin books are being fiddled,and not all this is truth.it happens all the time,small to large,large to corparate,

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  • Davies

    Mar 30, 2011 at 10:31 AM

    Comment #12

    Johnny, seriously mate, you do nothing but bitch and moan and some of the crap you come out with is just ridiculous. Are you Sam Allerdyce in disguise?

    Where did you read that we’re only going to get £20m in the summer?

    And get it out of your head that Andy Carroll was pushed out. HE HANDED IN A TRANSFER REQUEST BECAUSE NEWCASTLE WOULDN’T MATCH LIVERPOOL’S £80K PER WEEK WAGES.

    Idiot.

    Read the article above and tell me that you’d rather have Fat Freddy in charge. And don’t give me that old rubbish about Ashley getting us relegated. The players were responsible for that.

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  • bosamuelson

    Mar 30, 2011 at 10:35 AM

    Comment #13

    @ Oldbo….

    are you nuts, blind or just have it in for someone,

    “The Newcastle club was also helped enormously by the attendance at home gates last season, with the average attendance being 43,388, and that was the 4th highest attendance in England, while Newcastle were a second division side, and more than one million fans visited St James’ Park during the Championship season.

    That’s an amazing statistic that clearly shows the support of the Newcastle fan base.”

    Ed clearly mentions the home support.

    It is a fact that Mike Ashley is more a savor of NUFC than any other person. In my opinion if we didn’t get relegated I think we would be in a worse of position than we are in now.

    The players that all left are the players that should be getting your moaning. No one at the club, least of all MA.

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  • Stuart

    Mar 30, 2011 at 10:39 AM

    Comment #14

    haha, I wouldnt say least of all MA Bosamuelson, but you’re right, the only reason we got relegated was due to the players.

    The amount of talent we had that season there was no way we should’ve went down, its just a shame none of them could be bothered to play despite getting £60-£100k a week.

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  • jimmymagpie

    Mar 30, 2011 at 10:41 AM

    Comment #15

    Just been watching the financial expert on Sky, and surprise, surprise, Ashley is yet again keeping things from the fans by only publishing part accounts. Even the expert wondered what he’s trying to hide, and why he hasn’t published full accounts. You just can’t trust this guy, and Pardew now says that the target for next season is top 12. Doesn’t sound to me like a man who’s expecting a huge transfer budget. This is the man who said last week that he expects to sign 4 players, and we know that two he is currently negotiating with are free transfers. I think you fantacists out there can tear your wish lists up. Wonder if the full accounts will show sale of assets such as banqueting, security, etc, has gone towards repaying loans to you know who? Or, I am I just being cynical (lol)?

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  • nden85

    Mar 30, 2011 at 10:41 AM

    Comment #16

    oldbobaycliffe – he quite clearly does, if you’d bothered reading the full article before making your comment.

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  • Indian Magpie

    Mar 30, 2011 at 10:41 AM

    Comment #17

    IF ashley is bad or good, then Freddy shephered must have been totally opposite. so Ashley lovers would hate shephered and vice versa.

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  • dave 1961

    Mar 30, 2011 at 10:41 AM

    Comment #18

    It does not matter how much money spent, the only thing that matters is who we get, and the less we pay the better, to be critical now is daft as we do not know if or what we are after, but I don’t want a team of high paid scroungers who can’t be bothered to play, we should not be held to ransom also. As a club we have shown we will look after our players and that’s something the fans can be proud of. Agents can also see that these players get a better contract when they deserve one, so it’s not about filling players bank’s full of cash on day one. our owner is not all bad, & most fans what a sustainable club, and if we make a profit, great as it will only happen when the club gets a bit of success, the most important game for 2 years at the week end, & we have to turn the stadium into a theatre of hate, we have to intimidate the ref so he’s reluctant to go against us, we want a fair ref, even if we make his day a bad one, we need the wolves players that intimidated that they only make safe fair challenges, we need the players to understand that games like these are the games hero’s are made. if any wolves players does not feel glad to see the Tyne bridge behind them on Saturday evening, we as fans will have failed to do our bit, from now until Saturday evening, Ashley, Llambias, & Pardew don’t matter we have things of greater importance 3pm Saturday, the next 12 months could hang on this one result, I have my Strepsils ready, this can be the start of a new age of hero’s if those in black & white want it as much as the fans do.

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  • nden85

    Mar 30, 2011 at 10:42 AM

    Comment #19

    . . . as bosamuelson said

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  • Mac

    Mar 30, 2011 at 10:42 AM

    Comment #20

    Thank u Mr Ashley.

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  • jimmymagpie

    Mar 30, 2011 at 10:46 AM

    Comment #21

    Davies – there you go with your personal attacks again. Have you listened to the financial people this morning? All of them wondering why Ashley hasn’t published the full accounts, and all of them wondering what he is trying to hide. You’re the prick if you think for one moment that this club is going to spend more than £20m in transfer fees.

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  • super bartooon

    Mar 30, 2011 at 10:47 AM

    Comment #22

    @Mac u just made my day..

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  • super bartooon

    Mar 30, 2011 at 10:48 AM

    Comment #23

    @Mac u just made my day..lol

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  • JohnnyBrookes

    Mar 30, 2011 at 10:50 AM

    Comment #24

    Davies you bell end, having an actual differing opinion into the club is not “bitching and moaning” wind your neck in you prick.

    the reason we get laughed at by the majority of fans is because of brain dead morons like you who buy every bit of BS that comes out of the club. So when KK went to court and it was proved Ashley and co lied about transfers coming out of the club as PR, that was not true?

    So Carroll suddenly wanted to match liverpools wages, but that seems weird considering Derek Llambias recently said they wanted “their price” for him.

    You are a first class nob head who is utterly clueless. I think you will find that 4 managers in one season probably contributed to our demise.

    Or was that someone elses fault??

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  • teddy

    Mar 30, 2011 at 10:51 AM

    Comment #25

    I can imagine some Ashley supporters here are just having too much local gay pride.

    If an Indian/Arabian or Asian owner doing the same thing as Ashley then I’m sure these fans would have different opinions.

    My point is always simple, I love the club, and no matter who’s the owner I’ll cheer and shout for the club like 10 years ago; but I hate the fact Mike Ashley.

    THE LONGER THIS BUSINESSMAN STAYS, THE MORE DAMAGE IT DOES TO THE CLUB.

    And I say that, these type of fans are part of the blame if we relegate again.

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  • JohnnyBrookes

    Mar 30, 2011 at 10:51 AM

    Comment #26

    Btw that’s Allardyce, not “Allerdyce” GET IT, CAPITAL LETTERS MAKE YOU LOOK LIKE YOU’RE RIGHT!!!

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  • derekm

    Mar 30, 2011 at 10:51 AM

    Comment #27

    I personally get sick and tired of the Ashley bashing – perfectly true he has made mistakes as the owner of something he bought as a plaything, not a business, but over the last year he seems to be getting to grips with what he inherited from Freddie Shepherd. WHERE WOULD THE CLUB BE IF HE HAD NOT BOUGHT IT? dead. So for god’s sake let them get on with it and get behind them, it’s our only course of action. The strange thing is Ashley does appear to have the balls to do what he believes is right – in the early days he let himself be swayed by fans, dennis wise et al and look where that got us! At least he makes a decision and sticks with it, however unpalatable it seems to others at the time.

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  • Darryl

    Mar 30, 2011 at 10:52 AM

    Comment #28

    I speak for an awful lot of newcastle fans here. If there was a bandwagon, majority of newcastle fans would be Gypsie’s.

    Accounts are to be released on Thursday. Sorry to be silly, but isn’t that the official date? These are only part released.

    Ashley’s done us a favour, whoever the owners were (Apart from billionaires from oil) It was always going to happen. Noone would come into a team, see the wage bill, and happily plummet more into a struggling team. It was inevitable. Just be pleased we haven’t done a Middlesbrough, and be positive for once.

    I’m glad we were relegated, gives us a true team that got left behind and stuck with us. More good thing’s certainly came from it. However, it’s only right player’s wont renew contracts till we are confirmed in the league this year. After all, who would want to be part of another relegation season? I know i wouldn’t.

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  • dougski

    Mar 30, 2011 at 10:57 AM

    Comment #29

    Can you help me here people as something doesn’t add up if revenue is down by 40 mill what happened to players sales of 20 mill and wages down by 20 mill that covers the 40 mill so how do we still lose 35 mill? That means that he only sold carroll as he wouldn’t have given us any money to spend as were only going to break even now so it means unless we sell and rebuy we can never break even unless we sell first which means going to be hard to move into Europe never spending money unless we sell star players every year. I know football isn’t a profit making business but cutting so much down and massive support surely this is still dire to say we can get a max of 10 mill a year without borrowing money and selling players?

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  • supermacnumber9

    Mar 30, 2011 at 11:00 AM

    Comment #30

    The image of Ashley created by mistakes has tarnished his image probably beyond repair for many people, and his dreadful public relations and lack of communications have made it worse.

    BUT – NUFC were in a dreadful mess when he took over and he saved the club!

    He obviously did not understand the size of the task he was taking on nor did he know the best way of doing it. I think it was his toy, for prestige and glory. But he is no fool – he is a succesful business man – but when such outsiders come into football (its happened at other clubs) all common sense deserts them.

    BUT – it is not Ashley who made the mistakes – he at least realised he needed to appoint professionals but the ones he chose were his but mistake! He was part of a London set and he looked to Spurs as his playground – when he couldn’t get it he turned to NUFC, and lets be really honest, he wouldn’t has got the club if we had not been in a mess! The men he brought with him were cockneys on the edge of that london scene who advised him to reorganise the club structure on the european model with a director of footbal and head coach (just as Spurs had tried) – hence we got the wise-kinnear mob.

    The coach was Allardyce who wasted a fortune, was replaced by KK (who was expected to qualify for europe with the team he had!) but who wrongly thought he was manager and in charge (the legal case decided he was duped). So, a poor overpaid underperforming team was relegated. The rest has been damage limitation and learing from mistakes.

    There are signs that the good parts of the original scheme are working well (youth infrasrtucture, scouting & training teams), that the finances are more realistic, long contracts are settled – and we have a good average PL team to build on.

    My conclusion is that we have gone through a Maggie Thatcher period of hell but we are now (at great cost) fitter and leaner and ready for the future.

    So – get over it! He is the owner and will be until he choses not to be. Bury the past, its gone – we are still NUFC and we will always be NUFC. Win 2-3 games, improve the squad, move on, because the signs are there that we are on the rise again! Win a cup or qualify for europe and all (well some) will be forgiven – and wise men will say “I knew it was for the best at the time” – and most of them will be lieing sods!

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  • jimmymagpie

    Mar 30, 2011 at 11:07 AM

    Comment #31

    Davies – just read the statement telling us that the money received from the Carroll transfer is in a separate account and will be used for transfers, wages, facilities, and infrastructure. The statement acknowledges that some fans will be disappointed that not all the money will be spent on players, but says they must realise that wages to turnover next year with additional players is estimated to be 60%, which is still too high. Now we know why Pardew is negotiating with 2 free transfer players. If you read this morning’s financial press and interviews with Lambsarse, all is explained. So, one trophy signing, perhaps, and it looks like being Gervinho, who in fees and wages will cost £20m by the time to you add on vat, insurance, agents expenses, etc.

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  • Stuart

    Mar 30, 2011 at 11:16 AM

    Comment #32

    Jimmy, what happened to not believing any statement coming out of St James as it would all be lies? Or does that only count when they give good news?

    Maybe that is a ploy to get cheaper transfers. Everyone knows that in the summer we’re going to have to pay over the odds for players as teams know we have money to spend.

    If the club come out and say actually, theres at least £15m less than you think, they won’t take the piss as much.

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  • Davies

    Mar 30, 2011 at 11:21 AM

    Comment #33

    Sorry lads – When I get my crystal ball, maybe I’ll be as brilliantly knowledgable as you.

    Jimmymagpie – How can you have a pop at someone for personal insults and then call them a prick, you PRICK? I really don’t see why my calling jimmymagpie and idiot has anything to do with you anyway. Are you him mum or something?

    Johnny Brooks – I couldn’t give two sh1ts how you spell Alerdize, but if that’s what’s important to you, crack on son. By the way, whether it’s a difference of opinion or not, moaning and bitching is still moaning and bitching and you do it a lot. Maybe you should take some valuum and wind your neck in.

    If you’re not happy here, I understand Man City are still taking on plastic supporters who want trophy signings. If you are happy here, stop with the constant, incesant, moaning. We get it. You hate Ashley. Big deal.

    I get so hacked off with the the constant negativity from people who pass it off as realism – it’s horsesh1t. We have some decent news and appear to be on a relatively sound financial footing and all people can do is look for things to complain about.

    Seriously, you’re not the club’s accountants, you’re the supporters, so do your job and support.

    If we won the Champoins League, there would still be those looking for the negative. Get over it.

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  • Davies

    Mar 30, 2011 at 11:25 AM

    Comment #34

    Supermacnumber9 – post 29 – I could not have worded that better myself.

    You give me faith in the word supporter.

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  • JohnnyBrookes

    Mar 30, 2011 at 11:33 AM

    Comment #35

    Davies, your an absolute tool.

    Honestly mate, you really are. There is literally no point engaging in conversation with someone with the mind of a 12 year old.

    Yep I’m a plastic fan because I don’t think everything is great at NUFC right that makes perfect sense.

    You are a moron. Simple as.

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  • Davies

    Mar 30, 2011 at 11:33 AM

    Comment #36

    Oh and one more thing, Johnny; having a difference of opinion does not make me a knob end/ bell end who is utterly clueless – If you’re going to spout such personal philosophy, be sure to follow it yourself, otherwise you come across as a moron, a prick, utterly clueless etc…

    .. which you kind of do anyway. Just my opinion mind.

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  • Davies

    Mar 30, 2011 at 11:42 AM

    Comment #37

    If we’re nit-picking, Johnny, it should be you’re a moron, not your a moron. Bad sentence to get that one wrong on really.

    Yes, I’m a tool etc… so are you.. blah blah blah …

    I’m going to credit you with being right – We have a difference of opinion, but there’s no need for all this mud flinging (though I have to admit, I do enjoy the banter).

    I’m glad that you’re as passionate as you are (though I would say angry, more than passionate), because I like to think that every one of us actually gives a sh1t about the club.

    You have to understand that neither of us know what will happen in the coming months, and none of us really know the reasoning behind what’s happened in the past – Example – Andy Carroll gets £80k a week and a £3.6m singing on fee – Newcastle get £30m cash plus add ons – We’ll disagree about the instigator (but I think we’ll both at least agree that it was ridiculous to let this happen without a replacement), but it won’t make any difference in the grand scheme of things.

    Personally, I’m hoping for a decent transfer window. I really don’t care what we spend as long as we get what we need.

    Oh, and sorry for suggesting that you go and support City. Nobody deserves that. (You too Jimmymagpie – We’re all on the same side, after all).

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  • itsmehere

    Mar 30, 2011 at 11:54 AM

    Comment #38

    All this talk about 35 million or 20 million to spend what happens to the money the club gets for being in the premier league at the start of next season.
    This of course this takes in tv.,season ticket sales and sponsorship monies probably around 30 -50 +million . All of this needs to be taken into consideration I’m sure the accountants etc. have.!!!

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  • dave 1961

    Mar 30, 2011 at 12:01 PM

    Comment #39

    what’s the point into looking beyond 3pm on Saturday, as we need to plot the downfall of wolves, simply failing to do this makes all the arguments about transfers pointless, if we go down.

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  • wynsleap

    Mar 30, 2011 at 12:13 PM

    Comment #40

    I tell you one thing Ashley HAS achieved at the Toon – and that’s supporters fighting with themselves. With over 50 years of supporting this club where the fans all happily faced the same direction, I’ve never known such infighting with fans as at the moment.
    As has been said on this board we’re all fans, we’re all passionate about the club and we’re all desperate for success.
    It doesn’t mean we all have to lay down and accept all the BS we keep having fed to us.

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