During an exchange with Newcastle fans on Twitter, the Telegraph’s Luke Edwards has admitted that he understands Rafa Benitez’s summer transfer budget to be around £50m plus player sales – however there’s a bit of a twist that exposes Ashley’s devious approach.
£50m plus player sales sounds pretty healthy (especially when the likes of Mitrovic and Mbemba looking set to hand us an extra £25-£30m), however it’s clearly not as simple as that.
What seems clear is that Mike Ashley factors in much more than the transfer fee when players sign. So, let’s say it is £50m plus player sales is true and we raise £30m from sales. That suggests an £80m budget, leading fans to believe that we could spend that figure on transfers alone.
The truth seems to be that it’s nothing like as simple as that under Ashley, making these budgets much less than meets the eye.
For example, if we somehow managed to agree a £20m fee to sign Kenedy, it wouldn’t be just £20m that comes off this hypothetical budget of around £80m. Ashley would also factor in wages, which could be £2.5m a year on a 4-year-deal, therefore costing the club another £10m – something he’s sure to take away from Rafa’s budget.
If you then factor in agent fees, you’re suddenly looking at him costing over £30m – or at least that’s how the club clearly see it. And this will mean that Rafa’s budget will always be less than it appears, with the club always factoring in every single cost involved.
Luke Edward’s – the Telegraph’s North-East reporter – hints at this here:
I’ve been told but haven’t written it because these numbers are always difficult to be precise about because of wages and so that it will be around £50m plus player sales.
— Luke Edwards (@LukeEdwardsTele) June 15, 2018
It’s a devious move and one most fans may be naturally oblivious to, but this just sums up why Ashley’s way of doing business can be so misleading.
It really shouldn’t work like that, but Ashley’s a penny pincher and clearly wants to cover every single cost – so, with this in mind, you can see why Rafa’s budgets are, in theory, less than what’s claimed, with him having so little freedom to spend.
It may be £50m plus player sales, but if long-term wage packets and agent costs are factored in on top of the actual transfer fee, we’ll appear to spend so much less than what’s claimed in the press.
I said this years ago but got laughed at for my post (not on this page but on the chronirag) it’s always been the way with Ashley and to be fair the right one too
Sean(Quote)
It’s not the right way , it means if we want to sign players who are actually gonna improve our squad , we can only sign possibly two that will do that if each players fee works out to be 30million , no other club does this and it just shows a total lack of ambition
Jack(Quote)
If this is the case why are there complaints from Ashley about the wage budget being too high. Needing to sell before we buy. Surely the wages have already been covered in previous transfer windows, when we’ve spent 50 million but actually only managed to spend 20. It’s a load of rubbish. We all know were in trouble, the only thing that may save us is Benitez. Unless a takeover comes our way. But then Ashley will just increase the price to make sure it falls through. He’s here until we do a Leeds or a Portsmouth and only then will he leave.
John(Quote)
Think it’s a case of Ashley wanting his cake and eating it. You can’t factor wages into the transfer budget then factor them again in the annual accounts. Typical of his accounting methods.
Magpie 48(Quote)
suck *** fatshley
fuckuashley(Quote)
Surely if the wages are factored in to a budget, then the wages saved on players leaving should go back into the pot?
Joe(Quote)
If we do a Leeds he won’t be able to leave without taking a massive financial hit. And that just isn’t going to happen
mactoon(Quote)
People my sister who works for nufc has told me that we are looking a load deals mostly yes the odd under 10 mill,singing but mostly load deals N mr ashely wants what he put in returned to him but not in one season bit over 3
Sap us you like(Quote)
Your conclusion is not in any way supported by the quote from Luke Edwards. All he is saying is that if (as an example) we signed Bas Dost on a “free” this wouldn’t mean Rafa still has £50m left in his transfer budget. Because the signing on fees and likely massive wages, significantly more than the first team average, would have to be considered, and that would reduce the £50 budget. Makes sense to me.
Edwards doesn’t say that the total wage bill of every new player over the next 4-6 years of their contract has to be removed from Rafa’s budget. And he doesn’t even mention agents at all. A reasonable player on £50k per week on a five year contract costs £13m in wages, if he remains at the club. But no accounting standard ever would count this as an upfront cost. The cost of wages is an annual liability of £2.6m per year and comes out of revenue (matchday receipts, TV money etc.).
If you sign players on super high wages, say £100k, then it stands to reason that Rafa’s budget for this year reduces by £2.6m. And £2.6m next year…etc. Not a massive factor. Though Bas Dost might also require a €10m signing on fee, and that very obviously must come from this year’s transfer budget.
potski(Quote)
John, you are spot on. Ashley isn’t a shrewd businessman, he is a con and a cheat – factoring in four years of wages at the start of the contract but still crying poor because the wage bill is too high (according to his own ‘accounting’, all wages have already been accounted for when the player signs). This guy clearly needs the government to have a long hard look at his shonky business practices. If he is like this with the football club, what is he like with his other businesses. serious criminal investigation is long over due.
Peter(Quote)
If we offload mbemba and mitro then their wages cover any new signings so it has to be factored in rather than just saying the available money has to cover the players wages too. If mbemba and mitro earn 50k a week and dost wants 100 then its an even money deal
Nick(Quote)