It’s 50 years since Martin Luther King gave that momentous speech on the 28th August 1963, a mere eight years after we last won a major domestic competition – The FA Cup 1955 for the younger readers.
Since then the world has changed dramatically with the removal racial discrimination laws in most countries, except for Australian Aborigines and Native Americans. And of course the Geordie Nation is still waiting for a major honour.
I had thought of rewriting that speech but decided not even I am that pompous and presumptuous. However it did get me thinking because one thing is clear, the vision of the owner for the future of this club is not apparent. We are all guessing. Some look at the lack of spending and assume that as long as we clear relegation he will be happy. Whilst others look at the starting 11 and conclude that with a bit of luck it’s at least as good as any outside of the top six. Our finances are the 7th biggest in England, admittedly only just, but in the top 20 in Europe. It seems to me that a bit of analysis could reveal a bit more.
My starting point was the 2012 annual report for Sports Direct. Since this is the source of our owners wealth it seemed logical to see how much control he has. And a masterpiece of an annual report it is. However I could not get everything I wanted out of that so I had to resort to the press which given Mike Ashley’s notoriously private lifestyle is highly unreliable. However it would appear that Mike’s role in the company as Executive Deputy Chairman would indicate that he is not hands on day to day. It would also appear that that role is unpaid. So where does he get his money from? Well there is a bonus scheme which if the company grows he receives extra shares, but that has been scuppered, and he would not have got them until 2018.
However he does still own 70+% of the company shares and the dividends paid per share are zero, so no money there. He did sell £86.8m worth of property to Sports Direct, hopefully that will be enough to live on. What all this leads me to believe is that although Mike Ashley’s current worth is valued at £1.5bn most of that is asset rich and the degree of liquidity is not clear. Obviously plenty to live off but unlikely that he has a couple of hundred million in the bank waiting to spend on new players. Similarly I think his influence at Sports Direct whilst obviously not the absolute leader he was before floatation is still significant. Whether he could persuade the board to sponsor NUFC to the tune of tens of millions is debatable especially as they seem to be getting lots of coverage for free.
The first vision is to compete with the best. Now to do that with a level playing field we would need squad expenditure that is comparable with them. In other words our wage bill would have to double to compete with Arsenal, Liverpool and Spurs, or treble to compete with the Manchester clubs and Chelsea. This means our turnover as a club would need to grow to about £200m from the less than £100m that it is now. Then we would need to buy the players. This means that we would be looking to Mike to spend maybe £200m or £300m up front and then subsidise us to the tune of £100m per annum. Now that is not going to happen because firstly I doubt that he wants to do it and secondly I doubt that he could afford to do it himself or persuade Sports Direct that it benefits them enough to do it. Perhaps we can sell out to somebody else who does want to do that, It won’t be some robbing barsteward like some of our previous owners who used the club as a cash cow. Something you can’t accuse Mike Ashley of doing.
The next vision would be to be best of the rest, finishing top ten every season and getting good cup runs. From a financial viewpoint that is actually where we are. Bit of strengthening here and there running the club soundly that is the reality for NUFC. Whether that is being achieved or not is open to debate. Our Manager may not be good enough for a top six club but he has proven himself to be a competent Premier League manager although some don’t like him. Our DoF is not up to the job as he proved this window. And our club structure could be improved. The danger with this vision is that there is not much margin for error. Last season QPR out spent us on every front, with wages at £86m (to our £68) and were still relegated. Realistically nobody outside the top six is safe.
The final vision, for which there is is no evidence in the accounts whatsoever, is to asset strip and sell. This means selling off our best players and highest earners and replacing with cheap imports and hoping to stay in the gravy train of the Premier League. The problem with this vision is that there are no monies disappearing from the club in to the owners’ pockets, unlike previous owners.
Also the disaster of relegation is so real that no businessman would risk it, especially having been burned once already. Those who believe in this vision will point to the January window as evidence of an owner desperate to avoid relegation as justification of this attitude. But the accounts don’t reflect that. Also despite reoccurring rumours which appear to be based more on optimism than reality, there do not appear to be any buyers. Why do you think that is, Surely NUFC must be the best option for any billionaire to buy? No it’s not, it’s just about the worst.
Why is that? Well there is no room for growth and no room to play. Any billionaire will want his team to play in the Champions League. Now the league is already stuffed with six clubs chasing four places and the cost of breaking into that and regularly snaffling a place is horrendous. See above. They are more likely to move to a league where there is room for a big club to move to the top. We have seen this already across Europe.
Alternatively they may see the prospects of a Championship club winning promotion as several have already. Southampton for example. Ah, but there is big money in the Premier League you say, massive profits, great return on investment. That’s not really the case either. The average out of town supermarket turns over £150m (More than NUFC) and makes significantly more profit. So buying a football club is not for profitable investment reasons. No the idea that some multi billionaire is going to ride to our rescue is highly unlikely.
So what sort of vision do I have. Taking the positives I would hope that Ashley and Sports Direct sort out their compensation plan so that Mike knows where he stands. Also I would hope that they recognise the benefits to themselves of having a vibrant NUFC. To that end I would like to see our finances improved so that we can move clear of the pack and consolidate our position as the best of the rest. I would also like to explore an idea whereby instead of having players not playing we utilise them as a worldwide touring team raising the Newcastle profile. This to me would be the ideal scenario as a better owner is unlikely. A dispirited hated owner is not going to invest and the hate poured in his direction is likely to stem any support he is minded to give. However, the fans have spoken. They hate him, his regime and everything about him. Mediocrity beckons.
The world may have moved on since 1963 but NUFC appears to be no nearer a major trophy.