Why Fans Will Never Know Where That £35M Was Re-invested


When Andy Carroll was sold for £35M, Alan Pardew said that Mike Ashley told him the money would be reinvested back into the club.

Mike Ashley – Newcastle owner

In the old days, when things were a bit simpler, we would think that £35M could be used on transfer fees to bring in new players – very simple to know where the money had gone.

So if Newcastle brought in two players for £10M each and three for £5M each – so be it – that’s how the £35M was spent.

But Alan said the money would be used for the new players’ wages too, and that has muddied the waters big time, so the truth is we’ll never know where the money will go, because it all starts to get very complicated.

Some of it will be spent on ground improvements, and we know that under-soil heating is being installed at the Benton Training ground, and that’s good use of some of the money.

As far as wages go – if Cabaye, Marveaux and Ba are on say £30K/week (it’s probably more) – that’s around £1.5M/year for every player year of the contract – and since they have  5, 5, 3 year contracts (13 years in total) between them – then that’s around £20M (13*£1.5M) right there going to wages over the length of their contracts.

So it will be very easy – if you include wages – to say you have spent £35M this summer – and in any case that money is paid over the lifetime of the contracts – and so interest will be being accrued on most of that £35M too.

It’s going to be hard to show how Mike Ashley will spend that £35M – and of course Kevin Nolan has gone, so his wages are no longer on the books – so it really does become complicated

Newcastle could sign three more players this summer (for no net transfer fees being paid out) and then point to the £35M being spent on all the wages of the players brought in.

And if Barton and Enrique go this summer, it could well be that Newcastle make money in the transfer market – they could have a net plus in net transfer fees coming in.

And then Barton’s and Enrique’s wages (around £100K/week) will be off the books – so tell me again how you can work out how £35M was spent on wages and transfer fees?

It becomes very difficult believe me, and I’ve thought through this a bit, and once wages are brought into the equation it becomes very murky.

But once September rolls around we’ll give it our best shot of course, given which players have come and gone between now and then.

And if enough suitable players are not available this summer, there’s a decent argument to be made that the money should not be spent just for spending’s sake.

We just don’t know enough about the financials at Newcastle, but maybe some of that money will be used to pay off the loans  Ashley has made to the club, which are said to be at least £130M, although the news is that Mike is not looking to be paid that money any time soon.

And please, this is not meant to be Ashley bashing, it’s just that having looked at players’ wages – it’s going to be difficult for any of us to know just exactly where that money was reinvested back into the club.

And we all shouldn’t all jump to any conclusions yet either, because the transfer window still has a good two months to run – so some good new players could still arrive on Tyneside.

If we get another three top players on Tyneside this summer, and we can keep Joey and Jose, we think most fans will be happy enough come September – independent of what money has been spent.

That’s really the bottom line.

Comments welcome.



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112 comments so far

  • Xavi

    Jul 1, 2011 at 11:17 AM

    Comment #1

    why didnt we get a better billionarie?! mike ashley is an idiot

    first hes out there drinking in the stands with the fans, then afterwards spending a S**t load at the bar buying drinks. then he stuffs up kk. then he wants to sell the club only to change his mind.
    i hate him…

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  • ilovetoon8788

    Jul 1, 2011 at 11:20 AM

    Comment #2

    pardew just mentioned he expects ba to score 15-25. means he’s going to be our main forward. i think there will be no more striker signing.. haiz.

    and the 1-2 player that will come is just Abeid and Neil Taylor…. hope not.

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  • Stuart

    Jul 1, 2011 at 11:20 AM

    Comment #3

    We have a french league and cup winner, a striker that cost £7m just a few months ago, a £6m-£7m rated winger in Marveaux and a promising youngster in Abeid.

    If we had to pay the true values of each player it’d be around £10m for Cabaye, £10m for Ba, £6m for Marveuax and £2m-£3m for Abeid. So thats around £29m worth of players that we’ve signed for no more than £7.5m when you take into account signing on fees and agent fees.

    Then you take off the £4.5m for Nolan and we’ve spent around £3m on £29m worth of talent.

    Not bad as far as I’m concerned.

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  • barryvenison

    Jul 1, 2011 at 11:21 AM

    Comment #4

    So if Carrol’s sale is funding our new player’s wages then what are our gate receipts and advertising revenue and sponsorship deals and shirt sales funding??? Ashley’s pockets???

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  • listie

    Jul 1, 2011 at 11:24 AM

    Comment #5

    Well that peice cheered me up no end Ed ! Doomed i tell you Doomed!!!!!! lol

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  • Xavi

    Jul 1, 2011 at 11:24 AM

    Comment #6

    if we hadnt sold carroll would that mean we would have had 0 money to spend this summer?!!

    so it SHOULD be a lot more than 35 mill

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  • ilovetoon8788

    Jul 1, 2011 at 11:25 AM

    Comment #7

    we need another striker… Ba is not enough. Best is good but please not Ameobi as 3rd choice. He’ll be good as fourth and Airey and Ranger can go to another club on loan, like what manu did for welbeck and so on. 4 good strikers for that 1 spot is very good competition and if we are chasing the game, we got the option of playing 2 forward with good quality.

    Odemwingie or DJ campbell.. won’t cost a bomb.

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  • Geordiedoonsooth

    Jul 1, 2011 at 11:25 AM

    Comment #8

    I think we’ve seen the last of the transfer activity by the Toon this summer.

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  • UpTheRoad

    Jul 1, 2011 at 11:26 AM

    Comment #9

    Totally agreed Stuart mate 🙂

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  • Drona

    Jul 1, 2011 at 11:26 AM

    Comment #10

    without carroll money we wouldn’t get these 3 players we got, simple.

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  • P.I.

    Jul 1, 2011 at 11:26 AM

    Comment #11

    @Stuart

    I agree with you. Work has clearly been done to identify targets and the best prices. Surely though this is the job of the people trusted with player transfers at Newcastle.
    Are we to accept that as they have done a good job so far we should ait back and let them withold the rest of the transfer money?
    Regardless of whether the players we have in are worth £29M or £29 the fact remains there was a PROMISE made to reinvest all of the Carroll money into the playing staff.
    It’s also quite obvious from 99% of the bloggers on here, and just by looking at our squad that we need quality in certaij areas. As the money is there it should be guarenteed to buy the best we can possibly go for.

    I dont go along with the notion that the club have done well so far in buying players on the cheap, therefore we should be satisfied with what we’ve got and accept it. So far those in power look as if theyve put a bit graft in and done their job. About bloody time i say!

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  • barryvenison

    Jul 1, 2011 at 11:27 AM

    Comment #12

    @stuart- No not bad so far but we need to invest the rest of that money in the squad and push on. At least another striker preferably 2, a right winger and competion for RB, LB, and CB. If Ashley spends then we can genuinely attack the top 7.

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  • Stuart

    Jul 1, 2011 at 11:28 AM

    Comment #13

    @xavi – If you ran a business and were expecting to have to shell out £20m from your own pocket in the summer, but sold an asset for £35m in January, would you still dip your hands in your own pocket or would you take it out of that?

    Clubs have to become more self sufficient and thats exactly how it will happen.

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  • NUFC_Richyg01

    Jul 1, 2011 at 11:30 AM

    Comment #14

    I think we moving in the right direction.

    Thankyou Ed for finally doing an article on the money situation.

    Ed
    Do you know if the undersoil heating, new SJP pitch and new Sub Benches came off the £35M?

    @4
    Do you think it is cheap to run a football club?

    @1
    So you would prefer a billionarre and play fantasy football like Man City or Chelsea? No thanks mate!

    @6
    MA said he would invest £20M per year of his own money, if there is already money in the pot, why should he do this?
    If the AC money was not there then he would probably have invested, but then we wouldn’t need another striker then would we!

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  • ilovetoon8788

    Jul 1, 2011 at 11:31 AM

    Comment #15

    @barryvenison // Jul 1, 2011 at 11:27 AM

    if Ashley’s ambition is just a top 10 finish, our current signings are more than enough i say(assuming no one else leaves).

    if ashley is indeed willing to spend 35million on transfer fees alone this window, we just might crack the top 7 or even top 6.

    all depends on what ashley wants.. if its top 10. another 2 cheap signing is enough.

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  • NUFC_Richyg01

    Jul 1, 2011 at 11:31 AM

    Comment #16

    @11

    No, not to invest in the playing staff, to invest in the club.

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  • Stuart

    Jul 1, 2011 at 11:31 AM

    Comment #17

    @P.I and Barry.

    Theres two months left to invest, most of the money deals take place in late July through August anyway as clubs/players/agents like to hold out until towards the end of the window to get the best deals for themselves.

    You can’t right off a window on the day it opens hahah.

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  • mattnufc

    Jul 1, 2011 at 11:31 AM

    Comment #18

    I dont care about the money, I just want a few more signings and we will be a v good team next year.
    Atm we have a good starting 11 but are extremely thin in terms of squad depth.

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  • grumpy_old_sod

    Jul 1, 2011 at 11:32 AM

    Comment #19

    Ed

    Ashley deserves all the criticism he gets. His communication skills are really poor, either by his own words or by his staff. If fans slate him for that, then he is the only one to blame. By stating that 1 or 2 players are coming in (Taylor being one @ 1 million) with such a thin squad, fans will naturally. Blame him, because he is the owner. He needs a good PR representative at the club.

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  • NUFC_Richyg01

    Jul 1, 2011 at 11:33 AM

    Comment #20

    I think the other thing you “spend the £35M” gang are forgetting is there are two transfer windows.

    If we blow all of our funds now, what happens come January when we have identified a week area in the team but there is no money to rectify the problem??

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  • StevieGee

    Jul 1, 2011 at 11:34 AM

    Comment #21

    There is lots of guessing and speculation in this story.

    Saying that the £35m is gaining interest is most definitely false because to start with we know that we only received £30m up front for Carroll. The other £5m were bonuses and seeing as he hasn’t played for Liverpool and hasn’t featured for England since his move we wont be seeing any of them any time soon.

    Also it doesn’t take into account our overdraft which is sizeable the last I heard. If the £30m has gone in the club bank account then I imagine the overdraft would have swallowed most, if not all of it up which also means we wont be gaining any interest on the £30m we did receive in cash.

    In the long term I would like the club to be self sufficient and financially solid so I agree with how the club is being run these days to some extent. As long as we keep Barton and at least try to keep Enrique as well as adding a quality striker then I think we’ll keep building with continued success on the pitch. more sensible contracts are needed in the game as a whole so I cant fault them for that. Sometimes Ashley and Lambias need to not play hard ball so much with our top players though.

    Just my opinion. What does everyone else think?

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  • NUFC_Richyg01

    Jul 1, 2011 at 11:34 AM

    Comment #22

    @19

    I agree with you there that we could do with a decent communications outlet in the club.

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  • LGFUAD21

    Jul 1, 2011 at 11:35 AM

    Comment #23

    i get that £35m should also cover wages. And given that Ashley spent a chunk of his own money clearing the debt I wouldnt expect him to contribute anymore (£10-15m being the rule of thumb per year). However, if we are clearing the wage bill then surely new signings can replace those wages (eg Nolan for Marveaux, Alan Smith for someone elses wages)

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  • kakaobi

    Jul 1, 2011 at 11:35 AM

    Comment #24

    when taking players wages into account you should only take 1 year for example what if Cabaye cant settle in the epl and we sell him next season for 5m will ashley put the rest of his wages say 3m back in for new players, i don’t think he would so basically he’s ripping us off. The 35m should all be spent on players and not include wages. This man gets enough off tv and people going to games to cover wages.

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  • P.I.

    Jul 1, 2011 at 11:35 AM

    Comment #25

    @NUFC_Richyg01

    To invest in the club?

    Ok then so are you willing to accept the restaurant facilities being improved? Sub benches? Probably decorating the executive boxes and fueling the ‘copter he uses? All this is non essential but probably where the Carroll money is going.
    It’s absolute bollocks! A member from the playing staff goes. He fetches a huge sum. To accept that it can be spent on anything else other than improving the playing staff is playing right into Ashleys hands!

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  • NUFC_Richyg01

    Jul 1, 2011 at 11:35 AM

    Comment #26

    @21

    Some wise words there fella.

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  • LowFellMag

    Jul 1, 2011 at 11:37 AM

    Comment #27

    All the fifa console game lads are gonna be pissed off after the big names they keep saying we should sign at least us who expect nowt from the fcb and his monkeys might just might be able to smile wen someone actually proven in the epl is signed

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  • StevieGee

    Jul 1, 2011 at 11:38 AM

    Comment #28

    @Nufc_Richyg01 26

    Cheers mate.

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  • grumpy_old_sod

    Jul 1, 2011 at 11:41 AM

    Comment #29

    Steviegee

    I would have been annoyed if Ashley had said from the start that all of the money would have paid off the debt, but would still have respected his honesty, but Ashley stated that the money would be re-invested in players. This again comes down to the Ashley PR debacle.

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  • LGFUAD21

    Jul 1, 2011 at 11:43 AM

    Comment #30

    Plus if we arent spending as big as they made out why didnt we jump on other frees available such as Larsson and even Bothroyd (not an exceptional striker but maybe we are dreaming too big and he got the job done for Cardiff)

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  • P.I.

    Jul 1, 2011 at 11:43 AM

    Comment #31

    @29 grumpy_old_sod

    Apparently; “the money will be reinvested in the club”

    Which means its 29million on catering bills and decoration for his mates in the executive boxes and 6milllion on players.

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  • CLOIN

    Jul 1, 2011 at 11:44 AM

    Comment #32

    Stuart
    I dont single people out,but i cant help it with you because you are a moron.
    NUFC will have a turnover of approx 120 mill as at the end of 2010/11 season.If our expenditure for this year is approx 70 mill we will have a profit of 50 mill.So stop going on about we cant afford to spend.we can and also i expect MA to be in profit within the next 3 years if we can remain in the premiership.

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  • P.I.

    Jul 1, 2011 at 11:46 AM

    Comment #33

    I must say Pardew truely is a muppet when it comes to speaking to the press like. Why on Gods green Earth did he come out and say ‘one or two more players’?
    We doesnt he keep his trap shut.

    None of us would feel agrieved at the moment and we would be waiting with baited breath for the next signing. But instead we’re all on a downer cos it looks as if hes setting us up for another case of Ashleys lies.

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  • Stuart

    Jul 1, 2011 at 11:47 AM

    Comment #34

    Thank you Cloin.

    In all your little facts and figures there you forgot the fact that we’re still about £120m in debt though.

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  • LowFellMag

    Jul 1, 2011 at 11:49 AM

    Comment #35

    Wats wrong with bringin in a big striker who is getting on a bit f he’s gonna win games even its just til younguns can take his place don’t like this gotta be under 26 shite

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  • CLOIN

    Jul 1, 2011 at 11:49 AM

    Comment #36

    stuart
    how do you know?
    please give figures

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  • Stuart

    Jul 1, 2011 at 11:50 AM

    Comment #37

    Also, you hurt my feelings calling me a moron.

    However will I go on living knowing some miserable pr1ck from a blog thinks I’m a moron. I better go end it now haha.

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  • roshan MAGPIE

    Jul 1, 2011 at 11:50 AM

    Comment #38

    common guys we all know that the players we signed now are not going to stay for 5 years they will be sold when a good price will come to ashley so there is no need to add there wages in that 35m£ we have now who knows we might sell them next season itself

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  • Stuart

    Jul 1, 2011 at 11:51 AM

    Comment #39

    It was in all the papers and that a week or two ago, it listed every clubs overall debt and ours was around £120m.

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  • davybtoon

    Jul 1, 2011 at 11:51 AM

    Comment #40

    stuart – at last someone who sees sense n knows how the transfer window works, ya bang on the money picking up ba, marvuex n cabaye for 3mill when it shud of cost us 29mill not to mention last summer n jan we got tiote, gosling n hba for around 10mill when it shud of been more like 35/40mill

    half r totally jumping the gun n assuming things that arnt true we will sign more players u just got to hav patience.

    if u take what pardew yesterday as the truth that we will only sign 2 more players then u r fools as he has proved that he was saying that not give anything away, he said we wudnt sign anyone b4 july 4th n what happens sign abeid the day after he said

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