Newcastle Owe Mike Ashley Over Quarter Of A Billion Pounds


The latest Deloitte report on European football has just been published, and the Premier League is top of Europe’s money charts, and that is due to record TV deals that produced £2.4B in revenues in the last financial year.

mike ashley   -880074675

Mike Ashley – Newcastle owe £267M

Next in line was the Bundesliga, with nearly £1.4B  generated, according to the Deloitte annual report, but also the Premier League clubs had a massive total debt of £2.4B among its clubs.

Newcastle made an operating profit in the last financial year, but over half of the clubs in the Premier League still lost money.

And from this August, when the new TV deal takes effect,each Premier League club will receive an extra £25M on average and that of course will help clubs balance their books – which is what the UEFA Financial Fair Play Rules will demand in the future.

This quote  is taken directly from the report:

“Achieving a more sustainable balance between their costs and revenues and thereby generating more profits provides opportunities or, some might say, a culture shock for clubs,'” ‘Increased profitability will allow greater longer-term investment in stadia and training infrastructure, youth development and community programs.”

Newcastle United’s revenue of £93M in the last financial year, was enough to get us back in the Deloitte Football Money League Top 20, in 20th position, after a three year absence, so we are going in the right direction.

There’s also £1.4B in interest-free (soft) loans from the PL clubs’ owners, with Roman Abromovich leading the way with a massive £895M.

Next is line is Newcastle with £267M owed to owner Mike Ashley, but that’s a little bit misleading,  because it includes what Mike paid for the club back in 2007, which was around £133M – so he loaned Newcastle almost as much again since that time.

We know he paid off £100M in existing loans to cover debt the club already had when he took over at Newcastle, and he didn’t know about because he didn’t do too much due diligence on the club, and Newcastle were paying interest on that debt.

And then for the Championship season,   he paid the rest out to help pay the wages, so that’s largely where the extra £34M came from – so it seems to add up at a cursory level.

The loan  is at zero interest rate, and that has saved Newcastle millions of pounds each year – but remember these are all separate businesses – with their own financial books.

And Mike formed a company to buy Newcastle United in 2007, and that’s where the loans are coming from – it all helps – and Newcastle are now in a much better financial situation than when Mike too over.

It’s great that we managed to stay in the Premier League last season, and we’ll get anything from £60M to £100M from the Premier League next year, and that compares with the £45M we got this year for finishing in 16th place.

You may love or hate Mike Ashley, but he’s been very savvy at putting Newcastle on a very solid financial footing, and that’s got to be good for Newcastle’s future.

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30 comments so far

  • Ibizatoon - Back By Popular Demand

    Jun 6, 2013 at 10:11 AM

    Comment #1

    Don’t normally do this type of thing, but I’ve put together a website for people to donate money to Ashley.

    That’s a lot of cash for him to put in and I for one, struggle to sleep at night.

    Anything you can donate is appreciated.

    http://www.saveashleysgreggsfund.com

    Thanks

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  • roshan MAGPIE

    Jun 6, 2013 at 10:12 AM

    Comment #2

    I got a question for everyone
    who is better manager pardew or Di canio

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  • Rainrix

    Jun 6, 2013 at 10:12 AM

    Comment #3

    Can we pay him back in turnips? Everyone knows we Geordies are simple farm working peasants who have narry a thing to our names.

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  • Ibizatoon - Back By Popular Demand

    Jun 6, 2013 at 10:17 AM

    Comment #4

    From Previous Threads…

    Graeme….How’s tricks? Basically then, it’s just a case of giving up as we see nothing to inspire us? I honestly do get where the negativity has come from, but what next? Do we just sit and turn anything and everything in to a negative? What is the point?

    Laurent…Thank you, one of the few that actually answered the question 🙂 I get people are down, just checking to see how many were serious that they don’t care who we sign as they just get ruined or something to that effect.

    Roshan…Way too early to tell imo. Big season for Di Canio to prove his actual worth.

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  • Graeme

    Jun 6, 2013 at 10:19 AM

    Comment #5

    All hail MA!!

    We have a financially sound club, some of the most skilled players seen at SJP in many a year, yet we just managed to avoid relegation.

    The football – I use the term loosely – is dross, the tictacs are a joke, the coaching is neanderthal and the prospects are for mid table mediocrity, if we are lucky!!

    What a wonderful prospect we have to look forward to and the transfer window hasn’t even opened, yet we are told 2 players coming in – Oh Joy!!

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  • spitfire_

    Jun 6, 2013 at 10:22 AM

    Comment #7

    I don’t care how many pounds the club own him because he knew what was the situation in Newcastle when he buy the club… the afterwards debt it’s only because of him and his stupidity. This debt should not mean that the club will be passive on transfer market like last summer… Now there is a new sponsorship deal and much more money for TV rights. If this summer is like the last one I hope Ashley’s copper to crush and burn with the fat b@stard inside him.

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  • TorqToon

    Jun 6, 2013 at 10:24 AM

    Comment #9

    Good morning gents.

    Glad to see another day of positivity is upon us! Oh and another AC article!

    Love this place….! 🙂

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  • numba9

    Jun 6, 2013 at 10:27 AM

    Comment #10

    We owe him knack all he gets by quite ok ripping fans off and employing Muppets to coach dross football and selling five players for big bucks n buying cheap donnay types signings . We won’t progress under his regime and he has laughed at us and treated s with contempt many a time

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  • Graeme

    Jun 6, 2013 at 10:27 AM

    Comment #11

    Ibiza, all well in Nigeria, bit chilly though!!

    How can you give up? Supporting the toon is bred into you, there is no escape lol.

    What next? I havent a clue mate. Maybe they could try a bit of ambition? Show a bit of interest and intent? I guess it would be a start.

    The thought that the height of the “Management’s” ambition is just such a chilling prospect, its hard to generate any enthusiasm for the prospect. If they get it slightly wrong, or we suffer some serious injuries to key players, we will be in a relegation battle all over again!!

    Its not an appealing prospect is it??

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  • TorqToon

    Jun 6, 2013 at 10:30 AM

    Comment #12

    Numba 9 – which 5 players have we sold for big bucks? I can only think of AC?

    And not sure I would class debuchy, Cabaye, sissoko, yanga etc al as “donnay” signings?!

    You might not like the bloke and that’s fair enough, but we have punched way above our weight in recent transfers.

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  • roshan MAGPIE

    Jun 6, 2013 at 10:31 AM

    Comment #13

    its really hard to pass the time without premier league

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  • Belfast

    Jun 6, 2013 at 10:35 AM

    Comment #14

    But I thought we were the best run club in the land ? And Mike saved us from being another leeds ?

    No debt people say ?
    Look like a huge amount of debt to me.

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  • Tommyy

    Jun 6, 2013 at 10:35 AM

    Comment #15

    I’ve become detached and it’s horrible. We won’t do anything under Ashley and I’m now just waiting until he is bought out. Surely someone out there can save us from our misery!

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  • Ibizatoon - Back By Popular Demand

    Jun 6, 2013 at 10:36 AM

    Comment #16

    Spitfire…The only half excuse I am expecting for lack of summer spending is that this season we don’t have any EL. Even with that in mind, I expect them to address the balance within the squad, or should I say lack thereof. We desperately need striking options and actual wingers, that’s a must for me. Other than that, I would like to see serious effort made with the youth squad.

    I’m all for a plan to grow, but they need to move along with it and time is running out.

    Torq…Good morning, what would our day be without an AC story? It’s the only reason I get out of bed 🙂

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  • nufc 11

    Jun 6, 2013 at 10:36 AM

    Comment #17

    He is keeping AP and back room on bcoz they are cheap and fit into the model but at what cost? Bcoz for all to see with the players we have we should have been top 8 at least i dont buy the europa league as an excuse he lost the plot, the team and dressing room combined and I must say I was a fan but if hed been at any other club hed have walked, my fear is if we have to fire him in september their wont be many top managers around to replace what then? bring King Kenny back have to find someone that dosent exsist failing to prepare is preparing to fail and that sums Nufc UP.

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  • jesperfuglsang - captain of the lemon crew

    Jun 6, 2013 at 10:38 AM

    Comment #18

    So how is everyone doing this after noon? (or is it just noon)

    ..allrighty then! 😉

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  • Ibizatoon - Back By Popular Demand

    Jun 6, 2013 at 10:44 AM

    Comment #19

    Graeme…Sorry to hear that, it’s stinking hot over here.

    True, there is no escape 🙂

    As for ambition, it’s a funny one. I could see the sense in our model and thought we were doing quite well really up until last season. Big summer for Mike to show what he wants to do.

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  • numba9

    Jun 6, 2013 at 10:46 AM

    Comment #20

    Well put it this way he didn’t spend last summer and look what happened .he had forty mil from a c and k Nolan and only brought in cabs in the summer a free ba and took til Jan a year on from the big sale to get cisse . Players like loven best Barton have left in this period too and although some players brought in are quality some are not . Debuchey is very over ratedI cannot see us replacing collo and strikers cost money. I’ll leave you to do the maths torq

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  • Ibizatoon - Back By Popular Demand

    Jun 6, 2013 at 10:46 AM

    Comment #21

    Hi Jesper, Doing well this end, except for shutting my thumb in the car door 🙂

    At least it’s slowing down my typing.

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  • estechco

    Jun 6, 2013 at 11:11 AM

    Comment #22

    Perhaps Mike could ask our new sponsor Wonga for some help with the clubs debt…oh, no, wait!

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  • ITUNDERASHELL

    Jun 6, 2013 at 11:18 AM

    Comment #23

    Torq,

    Any developments regarding possible transfers from Holland and Spain mate?

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  • Dagga

    Jun 6, 2013 at 11:19 AM

    Comment #24

    The last official comment from the top regarding transfer activity came from DL during the January transfer window when he admitted they made a mistake by not investing in players during the summer. Having made that admission I will be amazed if there is not a few significant signings made on top of any replacements required for any departing purples. We know the regime keep their cards very close to their chests which to supporters is frustrating but it is probably infuriating to agents etc. as we seem very good at screwing the price down as far as possible.
    As far as I can tell people are just filling the void of no information and no football with their usually pessamistic doom-mongering. Come the start of the next season if the situation is still the same then feel free to let rip but until then lets just wait and see.

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  • lesh

    Jun 6, 2013 at 11:33 AM

    Comment #25

    From previous thread…..

    Ibiza. I wonder if Laudrup’s trying to attract interest from European clubs given the vacancy at. Real?

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  • fergies left foot

    Jun 6, 2013 at 11:50 AM

    Comment #26

    morning! anyone got some positive transfer news? dont care if it’s genuine, as long as it has some made up substance and makes sense! cheers.

    whats on your wishlist anyway? talks about mertens and valbuena got me dreaming but considering alan pardew is a vampire who feeds on attacking creativity, imagination and ambition i would think most of my options are hiding away somewhere safe.

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  • workyticket

    Jun 6, 2013 at 12:53 PM

    Comment #27

    In June 2007 when Ashley gained full control of the club, it appeared that Ashley inherited £71 million in debt. However, after Ashley’s takeover, it became apparent that the mortgage on the ground had to be paid off too, and the level of real debt was actually £124 million.

    Ashley passed all of this £124 million on to the club and at the time of the most recent accounts, this debt stood at £129.34 million, which is still higher. Hence, it is somewhat deceptive to say “Newcastle are now in a much better financial situation than when Mike too over, as it is actually in more debt to Mike Ashley than it was in 2007.

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  • MysteriousStranger

    Jun 6, 2013 at 1:25 PM

    Comment #28

    Owners loaning money to clubs rather than giving is quite common, I’m no expert and very possibly wrong (pleasecorrect if so) but is it not better for tax reasons? and getting away from that I think it shows financially the guy has made a substantial commitmnet but surronded himself with muppets on the football sense.

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  • David B's Toon

    Jun 6, 2013 at 3:20 PM

    Comment #29

    Ibizatoon no one knows what Mike’s long term plans are. We’re quick to point his immediate ones: raking in as much as he can. But knows one knows why or for what purpose? I hope this analogy explains my thoughts .

    I don’t buy into this idea that the club owes him money. Inasmuch as my house dose not owe me money. Sure it may pick up equity along the way; but I need somewhere to live. So unless I down size I’ll never reap the benefits. Even then the flat I buy will probably have ground rent and even then the flat would have increased value along the years. If I paid over the odds: then I have to sell over the odds to get my losses back.

    In the meantime I can increase my cash flow. Spend less! Both my wife and I have moved jobs, had promotions’ in the twenty years we’ve invested in the property. But my loss will always remain the same!

    If I don’t want to ruin my life and my families: I move on! We as a family can still enjoy the property. We can still invest in it and in return: it will still increase its value. Now over the years my loss will be covered (I probably only spent a couple of thousand over?). In the long great scheme of things the loss is negligible. Providing I could afford the original loan!

    At the end of the day if Mike managers to get a profit out of the business: he has done well. As long as his wealth increases each year: he will never (in real terms) feel the loss! It is however important that he runs the club responsibly.

    If we do think of businesses like mortgages then I worry that some clubs are being bought: without the debt ever being paid back! They are just being swapped around like rare art. Fine until the lender decides he wants their money back.

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  • marshy

    Jun 6, 2013 at 10:20 PM

    Comment #30

    fatash maybe a good businessman but he has proved over and over that he and his crony llambias know virtually nothing about football. the sooner they are history the better for NUFC.

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