I had to smile the other day when I read about Mike Ashley’s “sponsorship” deal with Darren Clarke, Lee Westwood and David Howell. Basically he has bet them 2 million pounds that they can’t win one of golfs “Majors”. If they lose – which effectively they do until they actually win – they have to advertise Dunlop free of charge. If they win they still have to wear the name, but Ashley pays them £2 million for doing it.
You can take the Boy out of the Casino, but apparently you can’t take the Casino out of the Boy.
Well Clarkie just took the Open Championship at Sandwich and now Ashley is 2 million down. Even so – probably still a very cost effective advertising philosophy for Ashley. No doubt he’ll either try for double or quits, or best out of three.
I also have a little smile to myself when I hear everyone asking “what happened to the Carroll money?”
It’s not like Alan Pardew can just pop off down the Player’s Pick ‘N’ Mix and ask for “10 million quids worth of Fullbacks, 10 million of Midfielders and a couple of Strikers. Oh and can you chuck in half a pound of Sherbet Lemons while you’re on?”.
It doesn’t work like that. Even the most well funded teams still haven’t made all of their purchases yet, so who’s to say that Pardew isn’t going to spend another 10 or 15 million before the window closes in 6 weeks? Hell, we are so used to waiting until 11 pm on August 31st I don’t even know why we’re discussing transfers this early in the day.
But even if he does, aren’t our priorities a little off the mark here? What is the requirement? To go out and spend 35 million, or to build a competitive squad?
I take a look at the squad we have and I’m already excited. OK its not blood pumping pass me the tissues kind of excited, but between the new French Connection and those that no longer have broken limbs I’m quite looking forward to the new season. The icing would of course be another couple of quality signings, but let’s see what happens.
We also seem to have lost the plot even further with the incessant complaints about Ashley trying to take money out of the club. If the paperwork is correct Ashley has piled somewhere in the region of £130 million of his own cash into the club under the guise of an interest free loan.
Let’s get this straight – a business is supposed to make money, not cost you £25 million a year.
I have the odd beverage with a mate who is a Financial Advisor, and a reasonable one at that. He has managed to increase my personal stash by 20% over the last 12 months, but mine was specifically structured as a low risk portfolio, as I apparently fall into that category of investors known as AIMLESS (“Afraid I Might Lose Everything – Scared Shitless).
We had an interesting chat about the £130 million that Ashley has loaned the club. If Ashley were the type of person willing to take a risk – and as my mate put it “he bought a shagging football club, that puts him way off the right hand side of the risk scale” – then over 3 years he could easily expect to take that particular wad from £130 to maybe £300 million plus. Even if he wimped out and went with my AIMLESS plan he would make £100 million over the 3 years.
So if Ashley loans £130 million over 3 years, then gets it back interest free, he has potentially lost £170 million. If he leaves it there for 5 years he has lost a staggering £390 million, so you can see that an interest free loan repayable on sale of the club can best be described as a deal of the “bloody good” variety.
Lliambas has stated that none of the Carroll money will be taken out of the club, but at no time did anyone say that they will go out and buy £35 million worth of players.
Here’s an interesting fact. Four new players on £30,000 a week on 4 year contracts works out at £25 million. That is salaries alone with no transfer fees, no wage increases and no agents fees.
What has happened with us in the past is that we have bought players on tick, and paid them from our annual income (Gate money, Sponsorship, TV Money) as it comes in.
Ashley, in his efforts to get the club running like a proper business, and a viable one, has calculated costs with regard to the players from the outset and budgeted accordingly. This results in the “doon-the-road-dosh” being available for other things. It’s actually good business practice.
It means that in a few years time we may even be able to change our accounting system from the current NPM system (Negative Profit Model) to a more conventional one.
Here’s another interesting story to finish with. I read this a couple of days ago and can’t find the article again, so can’t give names and addresses but essentially its spot on-ish. Ashley floated Sports Direct on the market in 2007. Share prices immediately plummeted through a combination of bad PR and bad management.
He sacked top management and brought someone else in to run it, and then sacked them, because in his eyes they were not doing a good enough job. Between then and 2009/10 he made a number of “managerial adjustments”, finally focusing more of his time on the running of the business himself. Last year, bucking the global downturn, he made £200 million.
The story goes that as a reward for their hard work he has given his staff £90 million in shares and cash.
OK. Think Allardyce, Keegan, Kinnear, Hughton and change the £90 million to half a million for the St James’ staff if we won the last game of the season, and that noise you hear should be that of a penny dropping.
Does this all sound a bit familiar?
Does this sound like NUFC?
Have we carried out enough managerial adjustment yet? He’s definitely running the ship himself.
This isn’t Sports Direct. The journey to profit will be a longer one, but are we about to beat the economic downturn and stumble across a profit?
My Financial Advisor friend also has a few things to say about that £90 million business but I think that spending all his time handling other people’s money has just made Nigel a bit of a cynical old Hector.
Does Ashley know anything about football? I doubt it, but I put my money on him making money, and he won’t be doing that in the Championship.
Thanks to rchie Brand for submitting this article for us to read and discuss.
Fatty is a quality owner, we are so lucky 🙂
jay jay(Quote)
The reality in football these days is that you have to spend to be successful. No one is asking for £20mil to be spent on a single player or even just two for that matter. We all want to see the squad strengthened but it doesn’t look like it’s going to happen. How can you blame fans for asking where the £35mil has gone when the club publicly stated it would be reinvested in the team, although these words have since been be rijigged by those in charge to muddy the water.
The club constantly misleads fans and seems to turn the opposite way each time we seem to be on the road to improvement. I’m all for running the club on stable financial footing but football isn’t just a business, it’s still a game we love and a team we love and it’s a love Ashley certainly doesn’t share. He needs to get his money back and get out and let someone with a bit of passion or even interest in football take over.
RichToon(Quote)
Absolutely top notch posting toonsy. Had me gripped all the way through. What I’d like to know is what is Ashley looking at short term? Obviously pumping millions back in will ruin his plan of getting 2 pies and not 1, but he needs to do something surely to increase income now? Or am I way off the mark? 😀
GeordieLadMick(Quote)
Thanks Toonsy for the insight and clarification, spotted with good humour to boot. It all stacks up when you put it like this but what I can’t quite understand is why it takes a good lad like yourself to clear all this up and cast a good light on our owner when the likes of Mr. Llambias is being paid – no doubt quite handsomely – to do exactly that. All he can do is slag us off for slagging off Andy Carroll after he jumped ship. Mind boggling…
Paul in Hollywood(Quote)
NUFC are in brilliant hands in terms of financial stability under Mike, but I like many others doubt his ambition.
Josh-NUFC(Quote)
Ashley will make us financially prosperus but it’s a shame he makes some right **** decisions along the way.
jay jay(Quote)
Great read like always
everything you said was well said
but we must remember its football not a business
however we have to keep an eye on the finances due to us going bankrupt
add me on my facebook page
umair(Quote)
*prosperous 🙄 😳
jay jay(Quote)
Has anyones Leeds or season tickets arrived yet? I’ve got no patience 😡
jay jay(Quote)
I for one would nor be the biggest fan of Ashley personally i think he is a fat mess, but once you understand what he us doing it all makes sense.
Four new players on £30,000 a week on 4 year contracts works out at £25 million. Leaving room for maybe one or two players to come in if ones go out. The financial structure is almost immaculate afterall making 200million profit in this economic climate is just short of amazing, We may all hate him but his businesses are running superb, the fortune on the pitch better be a positive or shouts of “fattie out” will echo louder. haway the lads because by god i love this club till my final breath…
MarkdutchNufc(Quote)
Well said! I personally a very big fan of Ashly but not only i love NUFC but i am sure the club will get out of debt and start making profit in 3-5years time and also ashley will build the team to be fighting 4 the 4th place by then and maybe we produce few legends from the academy and with some money in the bank… gamble 4 the title….. I would like to remind you all out there with your words on mouth about ashley putting the money in his pocket…. think if the owners of chelski, man citi and co… run out of money, then every one of you can kiss goodbye to the club… they are doomed……….
So lets give Ashley the chance and he is done well so far and may it continue… bring in a striker and one of each LB,RB ,CD (not quantity but quality please) and sell JE and keep JB. we will finish easy 7th or even higher depending on luck and injury free! bring on 2011/2012.. GO NUFC
Max-T-million(Quote)
I think MA has one plan minimal investment but enough to survive in the prem along with greatly reducing the wage bill to make OUR Club more attractive for a sale, he learned from previous attempts that to get all of his investment back he needs a low cost well supported club with potential he has reduced the wage bill significantly and generated investment on players from the sale of AC not to much longer to go one more average season and he’ll be off fank thuck
Shearclass(Quote)
@UMAIR – try telling portsmouth fans football is not a bloody business!! Harry rednap spent everything on huge salaries and transfers for one decent cup run and now look at them and many more clubs will proabably go the same way if they try and keep up with man city!! All fans have to realise that football is a business and you cannot just go out and buy a tevez for £40m @ £200k a week.
scottie(Quote)
Great post.
Ashley still has a £7.5m bid on the table for Erdinc. If Erdinc doesn’t come then Ashley will not be saying ‘thank God I can keep the money’- he will use it for another striker.
sidekick(Quote)
Nice article Toonsy and exactly right – there’ll be plenty of people that still won’t get it though unfortunately and none of them will have looked at the accounts or the numerous links to independent articles about the Toon’s financing.
3hourswasted(Quote)
Very interesting article and well thought out. As I have said many times on here, I think the club is now run very well fiancially. They just need to be up front and honest with the supporters. The double talk is what drives me uo the wall- I am generally OK with their actions
MDS(Quote)
@Umair
Football is a buisness sad but true 🙄
Great read toonsy will bring the trolls out in force though 😀
Santii(Quote)
Santii – Bring out the trolls? Even if it’s not related the trolls are out preaching their anti ashley *****.
Jobey07(Quote)
Very interesting article mate. A great read.
Mike(Quote)
Did anyone see that channel 4 doc on football clubs for sale??? Sudenly makes MA look like a nice guy!!
scottie(Quote)
Great article , Im fully behind the way Ashley is running the club , Since relegation the club has been building from scratch again and its going to take time. Yes they could communicate a bit better but maybe they feel if they are totally honest there will be a massive backlash from the fans again?
I do feel top 10 and a cup run is a realistic target next season with the squad as it is now and if we add 2 or 3 good players ( if we lose Jose ) we will be very strong next season. We are building for the future one step at a time,
Johno Toon(Quote)
so is Ashley good now or is he still a fat c**t?
mark(Quote)
Thank goodness for a breath of reality. Some of the insane comments and incredibly poor behavior exhibited recently reflect a lack of common sense.
No, you don’t have to like the owner. But for God’s sake, act like adults. Don’t bring shame on yourselves.
Also, take a look around. Half the teams in the Prem haven’t done squat yet this transfer period! Are their fans invading the pitch and screaming in pubs? Hardly.
Finally, show some dignity and respect for the team on the pitch. Make them want to play for the Toon.
Phew. Now you can tell me to F* off.
DCMag(Quote)
yes, excellent article btw
mark(Quote)
Spot on rich toon !
Bobby Shinton number 9(Quote)
gosling
ben arfa
vukic
cabaye
marveaux
ba
thats half a team !! and very good players
looking 4wad to vukic , just hope he gets a chance
cant w8 4 this season!! 25 DAYS TO GO!!!!!!!!!!!!!!!
Army69(Quote)
For once a really balanced perspective – great!
Pity most of the great unwashed will never read it.
Keith(Quote)
@DCMag
nicely said..
I watch L’pool spending 20mill on Downing etc and love the fact we’ve spent nowt.. theres gambling and down right retardedness..
Hail Ashley!! 😯
mark(Quote)
I MISSED THE FIRST BIT
new players next season
gosling
ben arfa
vukic
cabaye
marveaux
ba
thats half a team !! and very good players
looking 4wad to vukic , just hope he gets a chance
Army69(Quote)
The sale of Carroll for 35 million was unanticipated. We only have one other player at the club who could command a large fee and that is Tiote. I really don’t think he sees the club generating money from player sales. Getting the clubs running costs down seems the most obvious way to generate a profit.
Lacedaemonian(Quote)
@27
thats because 1, you need electricity and a PC
2, they can’t read..
mark(Quote)
Also remember that as NUFC we dont have a high ticket price as compared to MANU or other big clubs. our season tickets are much cheaper and affordable then the rest so we cannot compete with the big guns until we get the basic right.
Any football club is a business and no man in the world will support a company with his own money forever… one day.. sooner or later Chelsea and ManC will go down under… keep my words and we will be better off in the future!
Max-T-million(Quote)
Bobby – I answered your last contract question on that earlier thread . Hope it clarified the position.
sidekick(Quote)
A football club is made to win triophies, not to make money for the owner. MA is a cheap stupid lier, and we are investing less in players than all other pl teams. We cannot win anything with him in charce and although some fans are happy watching a mid tabel team allways selling the best players, the majority is fed up with the fat man and wants a new owner with more ambitions
Expert(Quote)
😈 😈 😈 😈 😈 😈
any1 is lying if they say they like that pic of ashley ……… look at him man , the fat ***** ***** ******* **** *** ***** piece of ****
😀 feel better now
Army69(Quote)
Sorry guys. Wasn’t me who wrote this. I forgot to add the line at tge end atributing it to Archi Brand but its there now 🙂
toonsy(Quote)
Most business men are total c*nts. Some of you seem surprised by this fact. Just look at Rupert Murdoch at al.
Lacedaemonian(Quote)
“we are investing less in players than all other pl teams”
Sunderland are investing a lot into players, trouble is theyre all shoite..
Pool also, henderson 20mill > Toite 3.5mill
Downing 20mill > marveaux free
mark(Quote)
@army69
he looks like that fat bizzy off hong kong fuey
mark(Quote)
mark – whats marveaux meant to be like?
never seen him play
Army69(Quote)
mark – he looks like jabba the hut
Army69(Quote)
@Army69 same goes m8, havent seen him but by all accounts, if he stays injury-free he should be a good player
mark(Quote)
you are all blind tits
tom(Quote)
Tom – And???
toonsy(Quote)
This blog should be required reading for every person that wants to add their opinion to any and all Newcastle blogs and comments pages.
I don’t know how Ashley came to have his heart set on Newcastle, but I’m glad he does and he is applying his profit motive to it.
People may have wanted Carroll around, but his sale did not get the team relegated and it added money to improve the squad and facilities. I would argue that the overall squad is better now, and a better squad working in a first class environment will attract even better players in the future.
BeeGuy(Quote)
Great read toonsy. I understand what Ashley is trying to do, I just think if he explained his intentions to our fans, he would have less ‘Anti Ashley fans’.
That is the frustating thing about Ashley, however if Shepphard was still running the club, we could and probably would have become the next Leeds utd. Debt debt debt….
He is trying to run the club like a business rather than a toy. When you look at some of the stupid money being thrown around at the moment on mediocre players, I think we have got our transfer policy spot on. Henderson:£20 mil, Downing £20 mil, Carroll although a good player £35 mil. Its crazy money!! All the ‘Ashley out’ stuff does my head in tbh. Without him, we would still be spending big money on crocks like Owen, paying ridiculous sums of money on wages and increasing the debt of our football club. At least we all have a football club to support. Without Ashley, we may not have in a few years to come. As long as his intentions are to stay with club and build it up year by year, then long may it continue.
hattonbenarfa(Quote)
Toonsy- Did you get my email earlier?
Zoë Vicarage(Quote)
Oh man, I could kiss your face.
Best article I’ve read in weeks, and fully agree.
His five year plan, it’ll deliver.
Daverism(Quote)
I asked this question to a few people yesterday.
Cabaye and Marveuax or Henderson and Downing?
Paul(Quote)
tom wot u talkn about?
Army69(Quote)
paul do u no much about cabaye and marveaux?
Army69(Quote)
Paul,
Ten Tiotes or 1 Andy Carroll is my favourite question!
Daverism(Quote)
Value for money wise, i think we got the better deal by a mile!
hattonbenarfa(Quote)
Zoe – I did indeed. Sorry for not responding. Been flat out all day 😕
toonsy(Quote)
I know the chances of this would be slim to zero but wouldnt it be great if the blog could secure some sort of interview with LLmabris or Ashley for them to try and give their vision of the clubs future to us.
Johno Toon(Quote)
Decent article Archie, always respected your opinion on various sites but I think some people are incredibly naive to believe the spin so effortlessly.
Toonsy – you have created a monster!
Fair play for the positive vibes chaps, I hope it’s me left with egg on my face in the not too distant future but I see black clouds ahead.
bowburnmag(Quote)
No but I know Downing and Henderson
Paul(Quote)
Cabaye, is a technically gifted central midfielder, capable of playing holding aswell as attacking.
Has the ability to split defences with range of passes and to slip through in possession with his deft touch and agility. Not shy of a shot frOm distance and a fine free kick taker!
Marveaux, don’t know as much, hear he’s quick!
Daverism(Quote)
Toonsy- That’s ok, just wanted to check you got it. Lol, same here. Looking forward to my holiday!
Zoë Vicarage(Quote)
Good, cos we need a new free kick taker, barton was shyte.
SpencerTheToon(Quote)
I mean he shyte at free kicks you shoot from, his long ball free kicks/crossing free kicks are top class.
SpencerTheToon(Quote)
http://theoriginalwinger.com/2010-05-19-chelsea-is-debt-free-owes-roman-abromovich-726m
I know its from 2010, but if Abramovich decided he was bored of his chelsea ‘toy’ and decided to call it a day tomorrow, they would be up **** creek!
hattonbenarfa(Quote)
Great article after some drivel I have written on other sites recently – if we can be in top half of the table and compete then we will do well – I am also a Financial Advisor and what your mate will also is that there is great power in incentives and performance based bonuses that’s why SportsDirect has done so well it is not luck ! The guy is great at Business but really really bad at PR but then he does have a face for radio so what would you expect!! Great article look forward to further reviews
Toon Ed(Quote)
You’ve written drivel ED? Probably shouldn’t be so self-criticising, you’ll get enough as it is.
bowburnmag(Quote)
Bowburn – I haven’t created a monster. I’ve just given him an avenue to express his thoughts 😉
toonsy(Quote)
Anyone who thunks the reason for not spending the Carroll money is so we have down the road money do you know the gullible has been taken out of the dictionary?
The real reason is so he can sell the club with lots of liquidity and a tidy cash flow-much more attractive!
Big risk though as no team has ever been successful on the cheap even though they have a great balance sheet!
What is football about again?
Stuart79(Quote)
The philosophy of being self-funding is more than possible, and certainly nothing most sensible folk would disagree with. The problem is that they are cutting corners on the road to breaking even. Instead of outlaying money on player investments in the meantime with the unexpected funds they now have, not only do we risk the threat of falling into a relegation battle again due to a lack of quality and strength but it also makes it difficult to watch.
Of course I’ll be told it’s not even August yet and that is indisputable but the vibes and utterances from Pardew are hardly encouraging.
By the same token, as has been said many times on here, it could also be easily interpreted that they are clearing the decks, and ready for the off.
bowburnmag(Quote)
Tom. Thanks for the insightful comment. Please post more often 😉
MDS(Quote)
Great read. Always been happy with what he is trying to do. Better the devil you know I say
Raffo(Quote)
@sidekick
Cheers fella for answering my question . How do you have knowledge of football contracts?
Bobby Shinton number 9(Quote)
nonsense ash didnt plan to gamble/invest/loan/donate/put as much money in the club. he didnt do diligence and got caught out by hos own stupidity
Greenboy(Quote)
Fair enough T, I think it’s coming together well and you have a canny mix as planned.
I just hope you have sponsorship in place with Kleenex for the last day of the transfer window as some of our more positive supporters may need them.
bowburnmag(Quote)
Great post, two questions though and these have been bugging me; if we take the new players wages into account out of the £35m, doesn’t that mean that they don’t contribute to the wage bill as technically they’ve been paid up front (as far as the accounts are concerned)? Pardew himself has said that the wage bill has gone up considerably which it can’t have done if the above is true. Also, getting promoted to the prem is apparently worth £60m, therefore by staying in the prem doesn’t that mean that we made at least £60m? I may very well be wrong of course 😆
blackiegray(Quote)
BG – you aren’t wrong but don’t spoil the party with some decent financial nouse.
bowburnmag(Quote)
So does this mean we’re not signing Sturridge? 😕
& businesses no longer speculate to accumulate?
geoff777(Quote)