Newcastle United’s finances for the year ending June 2010 have been released and following their season in the Championship, unsurprisingly Newcastle’s revenues took a major hit and in turn losses increased. While the figures that were submitted to Companies House are interesting, especially those that show more that one million people visited St James’ Park, what has stood out to me is the money that owner Mike Ashley has invested into the club. In those 12 months alone, Ashley injected £42 million into Newcastle United, so is it time that Newcastle fans gave him the benefit of the doubt and appreciate the financial stability that he has brought to the club?
I know this won’t be a stance that many Newcastle fans will be willing to take given some of the decisions he has made during his time at the club. I for one have been continually frustrated by the good work Ashley has been doing being ruined time and time again by, in my opinion, needless errors – the replacing of Chris Hughton with Alan Pardew the latest example of this. However, there is no disputing that Mike Ashley has made a huge financial commitment to the club and has used some of his business acumen to ensure that, at the very least, the financial future of Newcastle United is looking more rosy.
You only need to look at the examples of Leeds United and more recently Portsmouth to see the problems posed by relegation from the Premier League and how precarious some club’s financial position can be. There is no doubt, that while Freddy Shepherd’s time at the club brought much excitement to the north east, spending millions on players season after season clearly wasn’t financially viable in the long term and when Mike Ashley took control of the club they were in a mess and on the road to financial ruin. Ashley has turned this around and while the journey hasn’t been a smooth one, Newcastle are in a better position because of the steps he has taken.
[ad_pod id=’unruly’ align=’right’]
Newcastle chairman Derek Llambias has outlined the position the club found themselves in 18 months ago. Llambias has said that “Relegation presented a considerable challenge for us financially,” which is something of an understatement. He went on to say that “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 Ashley” and while this might sound like they’re blowing their own trumpets, I believe that they’re entitled to do so.
In total, Mike Ashley has lent Newcastle £139.8 million in the form of an interest-free loan. In the 12 months in question alone, he reduced bank borrowings by £25 million and thus lowered the amount of money effectively being thrown away each and every month in the form of interest on the loan. He is also on the way to changing the whole ethos at the club, from spending big money on players and paying extortionate wages to searching out young talent on the cheap and developing those starlets.
Then we come on to the Andy Carroll issue. This has been discussed extensively already so I don’t want to go over old ground but I just have one point to make – as much as I’d have loved to keep Carroll, selling him for £35m plus a percentage of any further fees was the right business decision to make, however frustrating it was to not be able to bring in a replacement before the January window slammed shut. I don’t expect Newcastle to spend all that money in the summer and don’t think it’s necessary either, as long as a couple of decent players are brought in then I’ll be relatively happy, and the signs look relatively promising given the money already spent on scouting missions.
I think we should give Mike Ashley the benefit of the doubt and cut him some slack. While I won’t make any excuses for some of the ill-advised decisions he’s made, he’s put his money where his mouth is and has ensured Newcastle are on a solid financial footing. Newcastle should now be in a position where they don’t need to sell the likes of Cheik Tiote and Jose Enrique this summer unless astronomical bids come in and it would thus be foolish not to take the money. Granted, Ashley hasn’t made things easy for himself, but his financial achievements should be recognised and not just glossed over in favour of the Ashley bashing that has popular backing.
I want to finish with another Llambias quote about Ashley: “Quite honestly, Newcastle United would not be here without him, it is as simple as that.” I’m not sure about that and it definitely isn’t that clear cut, but the guy deserves some credit, even if you give it to him through gritted teeth!
[bet_365 type='odds' size='300' af_code='365_050711']