The Newcastle United accounts for the financial year 2018-2019 show that the club owed the owner £111M from interest-free loans Mike Ashley has given the club over his 13 years at the helm.
The Ashley era is one of the worst periods in Newcastle’s long history, and we have been relegated twice from the Premier League in that time, the only times we have ever dropped out of the Premier League.
It’s interesting that in the previous year, the club owed him £144M, so that’s dropped from July 1, 2018, to June 30, 2019, by £33M.
Since at the time, Ashley had the club up for sale, that would amount to another £33M profit for the owner when and if the club was sold.
It has almost been sold now, and since Ashley (shown above) spent an initial £134M to buy the shares of the club from Sir John Hall, Freddie Shepherd, and others back in May 2007, he has a total investment of about £245M in Newcastle.
So that’s about a profit of around £55M – roughly – assuming the club is sold for £300M.
This is how the report reads on the loans from Mr. Ashley as reported in the Chronicle:
“Mr MJW Ashley and companies under his control continued to provide loan facilities to the group during the year.
“The total balance outstanding at 30 June 2019 was £111M (2018, £144M).
“The maximum amount outstanding during the year was £144M (2018, £154M).
“No interest was payable for either the current or prior year.”
So a total of £43M in loans were paid off to Mr. Ashley in the two years from July 1, 2017, through June 30 of last year.
It also appears that £1.1M came in as revenue from Frasers Group last year – formerly Sports Direct.
So that’s the amount he probably paid for the advertising at the ground.
Yes – for the Sports Direct stuff that’s all over the place, and if that’s true, it’s peanuts, as we suspected it would be.
The club made a profit of £34.7M for the financial year ending June 30, 2019.
And that’s almost double the profit of £18.6M made in the previous year.
So Newcastle made decent profits in the first two years back to the Premier League, with Rafa Benitez the manager.
Those profits will help the new owners with the Financial Fair Play (FFP) rules since they will need to spend big money on improving the team in the next few years.
They can spend any amount on infrastructure and youth development since that does not count towards expenditures for FFP.
We’re sure the fans would have liked Ashley to spend more money to improve the team in those first two years back to England’s top division, where we were fighting against relegation, and Rafa didn’t get the support he was promised.
That’s been Ashley’s big failing over 13 years – he’s been more concerned about the financial accounts than what the team is like on the pitch.
Hopefully, it will not last much longer.