Tuesday 26 May 2009

Newcastle United count the cost of failure

One look at the sponsor should have been enough of a warning.

On the radio fans of Newcastle United were putting the blame squarely on chairman Mike Ashley, after the club failed to come close to beating Aston Villa, and will now drop from the Premiership into the Championship. Mr Ashley might feel a little aggrieved at the suggestion that its all his fault.

He spent some £180 million of his £950 million fortune on the club. The 2008 accounts show that having bought the club for £134m, Ashley paid off borrowings of £43m and cleared the overdraft, paid off the previous owners and hangers on, lending the club £100m on which he has chosen to waive interest. He has not declared a dividend nor paid himself a salary.

The club will face a massive drop in revenue with its fall from the top flight. Premiership clubs receive around £30 million from Sky. Championship clubs around £3 million. There will be parachute payments of around £11.5 million to tide them over but with a £73 million wage bill alone there will have to be a sale of players, staff and probably fixtures and fittings too.

Liverpool University’s Professor Tom Cannon said the massive cut in TV money would be added to by drops in season ticket sales, a fall in sales of merchandise and a collapse in money coming from corporate entertainment and sponsorship. I take some issue with the prof in the terms of Newcastle.

1} Luckily the arrival of Keegan and Shearer probably means season tickets for the 2010 season, sold at premiership prices, were well advanced.Possibly for 2011 too.
2} They have the most loyal fans. They will turn up if it was the Conference League.
3} Merchandising will continue. If Mr Ashley does know one thing its how to create a buzz out of nothing. Sales and BOGOFs and Alan Shearer golf clubs and polo tops etc. Its his talent.

However with no relegation clauses inserted into players contracts, as they never thought they would need them, Newcastle will have to sell players. But who have they got? And how much would they get for the 33 man strong first team.
Michael Owen, who takes home 10 per cent of the wage bill, and Mark Viduka are in the final year of contracts and would together cut £9 million in wages. These two are probably the jewels in the team but the pacey young Owen of the 1998 World Cup era is now 31 and injury prone. Mark Viduka is 34 in October. Nicky Butt is also 34, Damien Duff 30. The younger boys may well find a price but Alan Smith hasn't done well since Leeds, and Kevin Nolan has only just signed. Joey Barton the £13 million signing may well end up staying, as who is going to take the risk on him, and Newcastle will probably need a bruiser in the Championship. Obafemi Martins should find a home in the Premiership but Jonas Gutierrez {£9 million}, Xisco {£5 million} and Fabricio Coloccini {£10 million} are likely to attract low bids

So poor Mr Ashley is about to lose more of his fortune. He put the club up for sale in a credit crunch. There were no bidders. Probably be fewer now its in the Championship. And for all the money he spent he gets grief from the fans.

I asked a very good friend of his back in January "Why is he doing it? Why put yourself through this media barrage. He doesn't need it. Why sit on the terrace listening to partisan, unrealistic, reality challenged fans, when you could just sit on the beach? What's he possibly going to learn? "

"Its Mike isn't it. He likes football. He thought why not?" came back the reply. "On balance, he should probably have just bought a season ticket, not the whole club."



Electro-Kevin said...

Newcastle fans are utterly fanatical. I'm spending the next weekend with a few and relegation will be beyond joking about, I'm sure. They'll stick around.

Now can we southerners get back to calling Newcastle New-car-sol instead of the affected New-cassel as is the wont of trendy sports presenters ?

If not then I insist that northerners call my own city Larrnden as is proper in those parts.

roym said...

the fact that Owen takes away 10% of the wage bill says it all really about Newcastle and its fans.

Since Keegan Mk1, there has been a real lack of foresight and planning. That a club of that size with an exclusive cachement area has failed to produce the next Beardsley, Waddle or Gascoigne(!) is a damming indictment of the whole mess. their short termism led to them being unable to even compete in the cup competitions and relying on big name signings to placate the fans once in a while. witness the reaction when owen signed. that little so and so has only proven himself to be a craven mercenary, yet they were acting like they'd won the cup!
Im afraid you get the club you deserve, and if the morons are going to abuse and harangue the manager (how many in 10 years?) after three bad results in a row then this is where you end up.

Bill Quango MP said...

EK. Mrs Q is Sarf Larnden. Her maidenly Surrey accent disappears if she is angry of tipsy,It all comes out when shes is phoning the council.
"Youse people don't not know nuffin' even what bleedin' day of the week it youse ..etc"
Have fun on the Tyne. The clubs contain the most visible amounts of flesh in the land, so I'm told. Whether this is due to the skimpiest of the clothes or the fatness of the ladies is never reported. Let us know.

Listening to 606 and hearing all the 'castle fans blame the managers, then the chairman. Little condemnation of the players and none of themselves. The fans forced a short term mentality onto the club as you explained.
Spurs almost followed the madness, but had the sense to pick an experienced manager over an icon.
They went from bottom to just missing out on a European place.

Demetrius said...

When Keegan first took over NU they were not well placed in the Championship,but he drove them to promotion, and nearly to the top. The world turns, the Championship is an unpredictable and tricky league to be in. Who would have thought to see all of Norwich, Charlton, and Southampton all going down at once, never mind Burnley doing up? For NU next season it could go either way, I will not be placing any bets.

Mick said...

They won't get good prices for players in a fire-sale. And they can only sell players if they agree to go - and who's going to agree to a salary cut?

They'll probably end up selling them and having to make up the shortfall on the wages, as Leeds did with Robbie Fowler and others when they got relegated.

Bill Quango MP said...

Demetrius: NU really have to get out first time or the troubles of Leeds, the spiralling debt,possible administration and points docking might push them down another tier of the league. Middlesbrough and WBA will have the parachute payments too. WBA will probably even have the same squas so may get off to a good start through natural cohesion.

Mick. Quite. Worse their players look a bit over rated if Middlesbrough decide to part with some of their stars.

Steven_L said...

Loyal fans? You're kidding BQ! When I was 9 years old in south east Northumberland the one lad who came to school with a NU bag used to get beaten up for not supporting Liverpool.

There is a hardcore of fantatics in the west end of Newcastle, but a fair few of the season tickets that filled out those big stands in the glory years were bought by middle class Northumbrian parents.

Gunner said...

Presumably now Northern Crock will desist fromwasting our money on sponsoring this shower?

Anonymous said...

I would not really take any of this post seriously as he did not even get Michael Owens age right.

stock market trading said...

Fanatics shouldn't give the blame to MA. There are thing also that they need to considered. The league is unpredictable you don't know what will happen. Unless NU will do their job well.