Problem With Newcastle – Little Worldwide Brand Recognition


Keith Harris has been interviewed about Mike Ashley attempts to sell the club in late 2008, and then again in the summer of 2009, after Newcastle were relegated.

Keith Harris – the man charged with selling Newcastle United

And one of the interesting things to us was one reason Newcastle didn’t get people flocking in to buy the Tyneside club, is that it’s brand name world-wide is not particularly good.

It’s hard to be unbiased and objective about the club, when you have been born and bred in Newcastle, so it’s good to have an independent assessment of the club, by someone who has been involved in selling clubs like Chelsea and Manchester City.

The other major reason buyers didn’t come flocking in to buy the club, is there seems no real way to increase the revenues of the club, since they seem to have been maximized by the current owner already.

But first of all it’s an interesting interview with Keith Harris, who is Chairman of investment banking firm Seymour Pierce, who was charged with selling Newcastle United for Mike Ashley, and the owner seems to have remain calm during the whole process.

“We were retained by Mike Ashley to sell the business. We got expressions of interest from a lot of people as is typical in football.”  “Most of them were just kicking the tires. There were one or two that came further than that but didn’t have all the money to invest but had some of it.”

“It meant they required additional funding but Mike lost patience with the whole process.”  “I wouldn’t say he was desperate to get rid of the club.”  “But he was disillusioned with what he saw going on at Newcastle United and he was obviously not massively popular in front of the fans.”

“There’s not much honour in football. When a team gets relegated it tends to be the owner who gets criticised, but when things go well it’s the manager who gets the plaudits and I don’t think Mike was used to that.”  “There were probably about 20 people who came back positively to express an interest and that was filtered down very, very quickly.”  

“Football is a great opportunity for people to enhance their personal profile but Mike stayed cool through the whole process.”  “As we narrowed it down there was one very interested party. He was very interested and a deal was on the cards. Because it was sensitive the press got hold of it and it nearly killed it. He had some additional money to raise and the terms he suggested were not far off. It was a credible and possible buy-out.”

“Part of the due diligence is that it has wonderful fan support, but it doesn’t have much of an international brand presence.”  “The problem is that if you own the club, how do you improve it? Off the pitch they have already done a good job of optimizing what they earn and you can’t get more people in the stadium.”

“There were guys that he wanted to sell it to. He wanted the information and he made the decisions to go ahead or change the plans. I think the figure was a sensible expectation for the club. These types of businesses are still regarded as trophy assets.”

“Academically, it should be worth more, but whether or not there’s a population willing to take it on is something else.”  “It was difficult to sell for a host of reasons. At that time, we didn’t know what was going to happen. But the real negative was how you could get more out of the club.”

“Mike Ashley was very straightforward to deal with. He wanted to know the news and he relied on Derek Llambias as an intermediary.”

The 61-year-old investment banker has worked to sell Chelsea to  Roman Abramovich, and he worked for the former Thailand Prime Minister  Thaksin Shinawatra for six months, until he eventually bought Manchester City, but then he sold to the current owners.

It’s hard to see why the revenues of Newcastle cannot be increased, and also the world-wide brand name cannot be improved.

Here are some potential ways to achieve those two things, and they seem to go hand in hand:

Ways to increase world-wide brand names and increase revenues:

  • Get and keep in European competition  – we made a good start at that with Alan Pardew but we really need to be in the Champions League – but if Newcastle are in the top six in the Premier League our games will continue to be shown world-wide
  • Expand St. James’ Park to 60,000 capacity – there have been plans in place to do this – but we must ensure the extra seats would be filled – so we need to have a very good side before the club can be expected to do that
  • Sell the naming rights to St. James Park – but we’ll keep calling it by what it is – St. James’ Park
  • Keep reading The Newcastle United Blog around the world for more global brand recognition 😀

I couldn’t resist putting that last bullet in there, but surely if Newcastle become a regular top six club or even top four club in the Premier League – both the brand recognition and the revenues should increase substantially.

We should get more revenue from European competition, and from full houses all of the time at St. James’ Park, and then we can charge more for the shirt deals we have.

To us,  it all seems so dependent on having a very good side.

What do you think?

Comments welcome.



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88 comments so far

  • jesperfuglsang

    May 24, 2012 at 1:31 PM

    Comment #1

    Yes, thank you Ed, we have moved on from Joey Barton 🙂

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  • jesperfuglsang

    May 24, 2012 at 1:34 PM

    Comment #2

    Just imagine what a mass frenzy he can incise 🙂 lol

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  • aussietoonfan

    May 24, 2012 at 1:37 PM

    Comment #3

    Hey guys,
    Sorry to have to ask but does anybody have a copy of the year in review double that was mentioned a few pages back that they would be willing to email to me?
    I saved the video by “Gallowgatetooners” I believe, on youtube to watch today, but the bloody FA have blocked it on copyright grounds.
    Dunno if it’s because I live in Australia or what, but I was keen to watch it.
    Please, please, please from one Toony to another, can ANYONE help?

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  • cupiddstunt

    May 24, 2012 at 1:38 PM

    Comment #4

    Yep you are right there Ed the whole thing hinges on the team’s success on the park

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  • cupiddstunt

    May 24, 2012 at 1:41 PM

    Comment #5

    Aussietoonfan @ # 3

    Go through a proxy server that way you can access anywhere and get stuff from anywhere, google proxy servers and you will see what I mean.

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  • WWYCD

    May 24, 2012 at 1:42 PM

    Comment #6

    Thought they couldn’t expand St James as the planning permission isn’t there? As for European competition it takes investment to begin with and is in no way to be certain it will come and selling the naming rights is hard to do unless its the owner buying it

    My reasons why its hard to make money out our football club

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  • Level 7 Hero

    May 24, 2012 at 1:52 PM

    Comment #7

    Isnt the answer simple? Look at other clubs of a similar size, see how there making money, then copy them.

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  • Hatem's better than Messi

    May 24, 2012 at 1:54 PM

    Comment #8

    Design a really really really really cheap black and white striped t-shirt with a Newcastle logo and give them free to poor kids around the world.

    0
  • aussietoonfan

    May 24, 2012 at 1:55 PM

    Comment #9

    thanks cupidstunt but:

    it returns and says that the site cannot be found?

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  • bollance

    May 24, 2012 at 1:59 PM

    Comment #10

    Another way for nufc to make more money is managing costs. The biggest cost to any business is salaries. Keep cutting the playing staff salaries will help the team overall. If we overpay any of our players it will make them less attractive to potential buyers. Danny Simpson is a prime example. He is very saleable now because he has low wages

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  • bollance

    May 24, 2012 at 2:01 PM

    Comment #11

    If we were to sign Drogba next season he should help our brand profile as he is a global superstar. Don’t think it will happen as he is in massive demand and his wages will be mega

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  • bollance

    May 24, 2012 at 2:03 PM

    Comment #12

    Neymar would be the player to get but sadly we could not afford to buy him unless we sold our crown jewels plus he would rather go to Real or Barca ahead of us!

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  • bollance

    May 24, 2012 at 2:04 PM

    Comment #13

    Can anyone see virgin providing cheap flights to toon army while we are in Europe?

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  • LGFUAD21

    May 24, 2012 at 2:08 PM

    Comment #14

    On Joey:

    Shame really. Lad is his own worst enemy. Should definitely consider therapy if he hopes to continue playing. I genuinely believed he had changed but the Man City match behaviour was appalling. Was one of my favourites here last season.

    On Ba:
    Clueless. I could accept him going for £12m + (enough to activate Giroud’s clause) but for £7m when we will only get £3m. Im struggling to believe that is the case. Time will tell. Let’s hope hey.

    On this:
    Like the guy said its a “trophy buy”. We should focus on France atm though. Should have arranged a pre-season tour of France (close and cheap). We can definitely build a fan base in France and then build from there. Why not then try and develop fan base in the African nations (especially the ones with French backgrounds).

    Liverpool and Man U have dominated the Asian countries. Man City look to have now monopolized the Arabic countries.

    Either way I’m sure there is some sort of clever marketing activities that could be undertaken to develop the worldwide fanbase. All clubs have pre seasons. Why not set up some fun little friendly tournament between Us and a club from each major european league. Hold it every summer in hope that each teams supporters then follow each others clubs as foreign teams.

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  • LGFUAD21

    May 24, 2012 at 2:09 PM

    Comment #15

    bollance

    Reported today that he is to be offerred 80k by Juve. Surely that is a huge pay cut for him?

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  • cupiddstunt

    May 24, 2012 at 2:10 PM

    Comment #16

    WWYCD @ # 6

    I do believe that there was planning permission lodged and in theory granted on an expansion to 60,000 without infringing on the houses at Leases Tce. and it has been on the back burner since.

    Correct from the point of view of selling the naming rights, if the club does not have a sizable global image then the international sponsors we seek are not going to be there, and local sponsors are going to be adversely affected by the local unrest by the fans over the renaming of the ground.

    I fail to see what all the hue and cry was all about with the re-naming of the stadium to me it was just such short sightedness from those fans kicking up the fuss, to me it could have and should have been pitched a little differently and all could have been kept happy.

    What’s wrong with a commentator saying “and now we go to

    St James’s park the new home of the ****insert sponsors name here”**** stadium, so the outside i.e. the building stays as St James’s as it’s been know for over a century but inside the actual play area and its perimeter the bit that is seen by the tv cameras as the game is played out has the sponsor’s name there for all to see.

    This will be worth more as we progress and improve the team and are more regularly seen as a European regular.

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  • toonincheek

    May 24, 2012 at 2:12 PM

    Comment #17

    You cannot change the image of the Toon, or any club, quickly.
    We still have a media image based on hitting the headlines to often for the wrong reasons.
    .
    We need to gradually consolidate our image.
    We have had just one season of doing things the right way, achieving success, and getting headlines for the RIGHT reasons.

    We need to do that for quite a few more years before we can come even close to matching the big earners based on image and reputation.

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  • Wor Shearer

    May 24, 2012 at 2:17 PM

    Comment #18

    The only way to increase our global recognition is to win something or get into the knockout stages of the Champs League, consistently.

    You can’t grow if nobody watches you no matter what sort of headlines you get in England.

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  • toonincheek

    May 24, 2012 at 2:17 PM

    Comment #19

    “Big” signings like Drogba are not the way we are going, and rightly so IMO.

    We are going the way of having an outstanding youth coaching scheme, and bargain buys, to develop players and sell some on.

    I’m OK to go along with that, but it will be a long time, if ever, before we can compete with clubs as long as they have an effectively unlimited transfer/wages budget.

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  • Jail for Ashley

    May 24, 2012 at 2:21 PM

    Comment #20

    I always wondered what happened to him,I really liked that Orville singing how he wishes he could fly.

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  • ShanghaiMag

    May 24, 2012 at 2:21 PM

    Comment #21

    This is very true, I went to the fake market here in Shanghai and the only Premier League shirts for sale were Chelsea (all with Drogba on the back, what a waste), Manu, Man city, Arsenal and Liverpool.

    I was happy to see no Spurs shirt though, and that’s the team we need to be aiming to displace.

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  • out of toon

    May 24, 2012 at 2:37 PM

    Comment #22

    im wondering what will happen to all the (talented) players at villarreal, now they’re relegated – smash and grab anyone?

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  • out of toon

    May 24, 2012 at 2:40 PM

    Comment #23

    Nilmar, Rossi, Soriano, Valero, Zapata etc

    interesting

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  • bollance

    May 24, 2012 at 2:42 PM

    Comment #24

    Juve offer to Drogba is reportedly 80k per week plus a £10m golden handshake. Any deal he will get will be his last big payday like eto’o to Anzhil

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  • out of toon

    May 24, 2012 at 2:42 PM

    Comment #25

    too many posts i know, but can anyone actually confirm that Ba has the release clause in his contract? I remember floppy chops brought it up, but don’t remember anyone verifying that it’s there…

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  • cupiddstunt

    May 24, 2012 at 2:42 PM

    Comment #26

    ShanghaiMag @ # 21

    That’s because all the NUFC shirts were sold out ages ago. 😉 🙂

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  • toonincheek

    May 24, 2012 at 2:46 PM

    Comment #27

    cupid – beat me to it!

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  • cupiddstunt

    May 24, 2012 at 2:47 PM

    Comment #28

    out of toon @ # 25

    What’s up does your mammy not let you out very much???

    It has been well documented and confirmed by AP that the clause does exist although it is “not as simple a clause as some may make out”

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  • Dannyo

    May 24, 2012 at 2:49 PM

    Comment #29

    Am i the only one getting seriously put off by Hazards comments on what club to chose?
    He realises he’s not the only player in the world right? And by far the best?
    I’m regurgitating when i read comments form him now.

    0
  • Indian Magpie

    May 24, 2012 at 2:50 PM

    Comment #30

    Yes we should go for

    Carlos Marchena,
    marcos senna

    😎

    0
  • out of toon

    May 24, 2012 at 2:50 PM

    Comment #31

    thanks clown, erm cupidstunt

    i’m in australia champ
    news and time is hard to come by
    i like to read and post like a mofo 🙂

    wonder how complex a clause it actually is:

    “in order to activate Demba Ba’s release clause you must first swim the English Channel, then drink 12 pints of Brown Ale etc etc)

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  • LooneyToon41

    May 24, 2012 at 2:53 PM

    Comment #32

    @16 Cupiddstunt, and Ed. I agree with you about the naming rights. The whole reaction has been ‘short termism/anti Ashley etc’ .
    St James’ will always be that to me, but if Amex or Coca/cola want to pay NUFC £Xm a year for naming rights, which could help us attract better players etc etc.

    Without Champions League revenues, and with our shirt deal all tied up, the ONLY major short term revenue provider is naming rights.
    And yet people still post… we should spend £40m on this player, that player etc etc…. with what???
    You won’t sell the naming rights, but you still want to spend money NUFC haven’t got!!
    Look to the future.. not the past!

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  • FatmanJoe

    May 24, 2012 at 2:58 PM

    Comment #33

    There’s actually a huge Market out there for us. I’ve just got back from travelling Asia, australia and new Zealand for a year and in most cases people had heard off and loved watching Newcastle, in fact many people said they were their second team. We just have to be successful and have another season like this one. And maybe sign an Asian.

    Everton and qpr are huge in Asia too.

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  • cupiddstunt

    May 24, 2012 at 3:00 PM

    Comment #34

    ut of toon @ # 31

    My comment @ # 28 was because ever since floppy chops mentioned the clause it has come up for discussion at least weekly ever since so you must by quite selective in your reading to have missed the discussions in their many and varied guises.

    The complexities of the clause have never been revealed by NUFC and rightly so the less talk about it the better.

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  • out of toon

    May 24, 2012 at 3:06 PM

    Comment #36

    cupid @34

    yeah i only get on here a couple of times a week and you can’t exactly take the stuff posted on here for granted… Thanks for clearing up.
    I get the feeling he’ll be the big player leaving, wouldn’t want to see him move for peanuts

    Good night all

    Debuchy tomorrow?

    Saturday THE WORLD

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  • cupiddstunt

    May 24, 2012 at 3:12 PM

    Comment #37

    FatmanJoe @ # 33

    I agree with you in that a quick and easy fix to globalise is to buy a player from the country/continent you are looking to raise profile in.

    But I think the article is looking at a different demographic when they are saying “little worldwide Brand recognition” yes at grass roots watching the games this last two seasons have probably started to pull back some of the watchers we had when we were the entertainers, but that takes a little while to work its way back up the corporate ladder. So to the money men we have a small footprint at the moment and that comes from a man that is actually involved in finding buyers and selling clubs.

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  • wor geordie

    May 24, 2012 at 3:35 PM

    Comment #38

    yes cupid, thats true, but somtimes it doesn’t always work that way. some chicken guy bought blackburn to promote it in his country, got relegated. hardly any profit there. he2

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  • Beardo

    May 24, 2012 at 3:42 PM

    Comment #39

    Ezekiel Fryers due to arrive at Benton on Monday to undergo a medical.

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  • nobby sol

    May 24, 2012 at 3:45 PM

    Comment #40

    ba has to go now imo 7 million is fair let remember his knees.

    splash 10-15 million on dejong aswell as tulio de melo on a free

    get a solid young centreback, mbiwa?

    and a good fullback, debuchy?

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