Newcastle United Finances - 2008 Accounts Recently Filed

[LoveItIfWeBeatU]

http://www.guardian.co.uk/sport/blog/2009/feb/10/newcastle-united-mike-ashley-john-hall-freddy-shepherd

 

Ashley counts cost as old guard count their riches

 

• Former owners made £145.8m from Newcastle

• Ashley has put fortune on line and taken nothing

David Conn  Wednesday 11 February 2009

 

Mike Ashley's Newcastle United are pressing on with their hesitant charm offensive this week, with Derek Llambias, the club's managing director, stressing in the local newspaper Ashley's revised commitment to the club, the money he has put in, and making an extended plea for owner and fans to go marching on together.

 

The tragedy of Ashley's tenure at Newcastle – if that is not too grand a word – is that this was the takeover which should have gone so right. There was concern elsewhere that new owners buying Premier League clubs were overseas financial speculators who knew nothing of football and, at Manchester United and Liverpool, were loading flourishing clubs with debt. Ashley was English, loves football and had a great deal of cash to spend – £929m made personally from selling shares when his Sports Direct company floated on the stockmarket in March 2007.

 

Newcastle's previous owners, the outgoing chairman Freddy Shepherd and his brother Bruce, and Sir John Hall, his son Douglas and their family bought their majority stakes relatively cheaply for an initial estimated £3.3m by 1992, just before football boomed comercially. They steered the club since the early 1990s from the old Second Division to runners-up spot in the Premier League and European football at a rebuilt, 52,000-seat St James' Park, yet mostly without garnering affection from the Toon Army faithful.

 

Accounts recently published by Newcastle, for the year to June 2008, show how much more generous Ashley's contribution has been already, with debts paid off and £100m loaned interest free to the club, compared to the millions relentlessly earned from the club by the Halls and Shepherds. When Sir John, the Gateshead shopping-centre magnate, took over Newcastle, he promised that the club would herald north-east regeneration and revive the "Geordie nation". Whatever the outcome of that, the club certainly became hugely profitable for Sir John and his family.

 

The Halls and Freddy Shepherd, who became a director alongside them, took no salaries for the first few years, then made up for it in 1996: Sir John was paid £836,803, Douglas Hall £793,612 and Shepherd £750,000. The accounts said the payment "recognises the fact that the directors received no remuneration prior to this year".

 

Shepherd, who staunchly defends his and the Halls' record of achievement at Newcastle, acknowledged that after the club floated on the stockmarket in 1997, they never contributed money for the club to invest. Before that, he said, they had guaranteed loans – documents at the time noted that £3.5m of the club's borrowings were guaranteed by the Halls' company, Cameron Hall, and that Cameron Hall had loaned the club money, at 11% interest.

 

The latest accounts provide a final reckoning on the Shepherds' and Halls' era because they sold all their shares to Ashley in June 2007 and have also resigned as directors. Altogether, the two families made an extraordinary £145.8m from their years of involvement – the Halls made £95.7m, the Shepherds £50.1m, mostly in salaries, dividends and ultimately selling their shares. The Halls had already made £20.35m from selling portions of their shares before Ashley paid £55m for their remaining stake. Shepherd did not want to sell – he had steadily bought more shares – but was effectively forced to – Ashley paid Freddie and Bruce £38m. Shepherd did not receive a pay-off when he resigned as a director in July 2007 but Douglas Hall, paid a £494,655 salary package in 2007 via a Newcastle United company registered in the tax haven of Gibraltar, was entitled to two years' pay in compensation and received an additional £1.17m when he resigned.

 

The unrest and despondency on Tyneside now make it easy to forget how Ashley's arrival put a smile on local faces, a new owner who watched matches with supporters, drank on the Bigg Market and had £1bn in his pocket, too.  The accounts show that having bought the club for £134m, Ashley paid off borrowings of £43m and cleared the overdraft, lending the club £100m on which he has chosen to waive interest. He has not declared a dividend nor paid himself a salary. In short, he has put a chunk of his considerable fortune on the line, and not taken a penny out.

 

Yet after the departure of the Geordie talisman Kevin Keegan as manager last September, Ashley's party ended. Fans infinitely preferred Keegan's charisma to the operations of Dennis Wise and the "cockney mafia" Ashley appointed in senior positions and, when their criticism hit, Ashley announced he wanted to sell. Only when no buyer could be found did Ashley announce in December that he was staying after all and wanted to "take the club forward together" with the fans. Llambias's local media work this week is part of that new project.

 

Ashley himself is still deeply reticent about talking to the press, so there is no public explanation about how a man canny enough to make almost £1bn cash from sports retailing allowed himself to have so hapless a time at Newcastle. His appointments, after his lawyer, Chris Mort, left following a year as the chairman, lacked experience of running football clubs. Llambias was previously a director of three London casinos, including Fifty, which Ashley is said to have visited. Tony Jimenez, briefly appointed vice-president responsible for player recruitment, was a director of a small sports agency. He is said to be a close friend of Wise and to have been key to Wise's appointment as director of football. One well-informed source said Ashley, Llambias and Jimenez were good friends; the three used to follow England and watch other football together, and Ashley wanted people he could trust in charge at Newcastle, because he believed football could be dodgy, particularly in its transfer dealings. Ashley is understood to have known Joe Kinnear, too, whom he appointed when Keegan left.

 

Some of what has happened can better be understood by considering the stage Ashley had reached in his life. He had worked in sports shops, then his retail company, since he left school at 16, then had finally made that £929m and, one friend says, wanted to enjoy himself. He bought Newcastle three months later almost on impulse, telling Mort to get the deal done without undertaking lengthy investigations of Newcastle's books. Supporting from the stands with his replica shirt on told of a man suddenly liberated, wanting to have a good time. Friends say he did want the club to be run well financially, hence the idea of appointing Wise to target young, good-value signings, but he seems to have underestimated how difficult football actually is on the inside and how public the ordure when it all goes wrong.

 

After a transfer window in which Shay Given and Charles N'Zogbia were sold, fans not profoundly cheered by the signings of Kevin Nolan, Ryan Taylor and Peter Lovenkrands will hope that Llambias's public appearance this week heralds Ashley getting a grip on the practical business of football. Otherwise, Freddy Shepherd's pointed observation – "anybody can buy a football club, not everybody can run one" – will continue to wound.

[Mr Logic]

Was just about to post the very same link..

 

• Former owners made £145.8m from Newcastle

• Ashley has put fortune on line and taken nothing

 

 

[ChezGiven]

Newcastle's ability to invest and back their managers during the period 92-05 (which the previous board did without any doubt) was because football was, as the article above highlights, experiencing (like the overall economy in the UK incidentally) a period of sustained growth financially and economically.

 

The outlook for the game is still good but the levels of growth in revenue are not the same they were, which changes the ability of club's to raise finance beyond their current means. The model is now more static and financial performance in the current year is expected to be similar in forthcoming years now that the Sky money has been factored into the financial analysis of the lenders and backers. 

[AyeDubbleYoo]

http://www.guardian.co.uk/sport/blog/2009/feb/10/newcastle-united-mike-ashley-john-hall-freddy-shepherd

 

That's spot on basically, he looked to be the perfect owner and I still don't want to let go of that. I think he can get things back on track... the principles are all sound.

 

And now he knows about how explosive fan reaction can be!

[ChezGiven]

One thing that gives me a little optimism is our relative position financially to other clubs. If we survive this year then i think we'll pull more weight than several clubs who are spending (seemingly) more heavily than us for now. The annoying thing for everyone is the fact that money should have been invested to guarantee survival. I feel Ashley assessed the options in January, saw they were not perfect or over-priced and gambled on our future by delaying any further activity until the summer. If we get there, i think things should get better. Big if.

[Mowen]

One thing that gives me a little optimism is our relative position financially to other clubs. If we survive this year then i think we'll pull more weight than several clubs who are spending (seemingly) more heavily than us for now. The annoying thing for everyone is the fact that money should have been invested to guarantee survival. I feel Ashley assessed the options in January, saw they were not perfect or over-priced and gambled on our future by delaying any further activity until the summer. If we get there, i think things should get better. Big if.

 

Sounds about right. Massive gamble for sure. The main point of contention for me is that they surely could have brought in a manager of the quality that could have done more to guarantee survival for much less money than they were prepared to spend on Johnson.

[madras]

One thing that gives me a little optimism is our relative position financially to other clubs. If we survive this year then i think we'll pull more weight than several clubs who are spending (seemingly) more heavily than us for now. The annoying thing for everyone is the fact that money should have been invested to guarantee survival. I feel Ashley assessed the options in January, saw they were not perfect or over-priced and gambled on our future by delaying any further activity until the summer. If we get there, i think things should get better. Big if.

which other clubs ?

 

just it seems like most have pulled the reins right in and we were in a worse position to begin with.

[Teasy]

I suppose the one area for optimism is our revenue which is very high.  If we can cut down the wages to a level nearer to the likes of the Spuds and Everton and stop giving managers massive payoffs we'll be in a position to make big money rather then lose it.  Most clubs can't say the same, clubs like West Ham have a wage bill 30% lower then ours but they're still in big trouble because they just don't make enough money.  I suppose what I'm saying is its much easier to see how we can turn our finances around then it is for a lot of other clubs in this league.

[LoveItIfWeBeatU]

15/Feb/09

Said and Done - CALL ME A CAPITALIST - David Hills The Observer

1997: Sir John Hall ("call me a capitalist with a social conscience") says football needs ethical club ownership. "Chairmen have to be responsible financially. All I hope is that pure greed does not take over and ruin everything."

2009: Newcastle publish final accounts covering Hall's years as club co-owner. • Hall's salary: £837,000. • Son Douglas's salary: £794,000. • Daughter Allison's fee as a director: £151,000. • £14m: amount they made in dividends. • £10m: amount made from selling part of the club to NTL. • £20m: amount made from share sales in the years before the final disposal to Mike Ashley.

 

Total overall profit for the Halls: £95.7m. ("People in the south exploit this region," said Hall in 1994. "They use us and take everything they can from us. I'm fighting for the Geordie Nation!")

[Guest The Libertine]

Was just about to post the very same link..

 

• Former owners made £145.8m from Newcastle

• Ashley has put fortune on line and taken nothing

 

 

 

so y r we not buying all da players ffs?!?!

 

[NJS]

Was just about to post the very same link..

 

• Former owners made £145.8m from Newcastle

• Ashley has put fortune on line and taken nothing

 

 

 

Considering Ashley did exactly what the Halls did when he floated SD (though the Halls weren't damned by the City for ripping them off) how are they "morally" different if that's what you're implying?

 

Also what about the price he allegedly wanted off the Arabs in September which would have made him more that £150m?

 

 

[Liam Liam Liam O]

Was just about to post the very same link..

 

Former owners made £145.8m from Newcastle

Ashley has put fortune on line and taken nothing

 

 

 

Considering Ashley did exactly what the Halls did when he floated SD (though the Halls weren't damned by the City for ripping them off) how are they "morally" different if that's what you're implying?

 

Also what about the price he allegedly wanted off the Arabs in September which would have made him more that £150m?

 

 

 

Shepherd & Hall creamed millions of the trading income out of the club & left it in a disastrous financial state, that's entirely different to money made from selling shares.

 

 

[NJS]

Was just about to post the very same link..

 

Former owners made £145.8m from Newcastle

Ashley has put fortune on line and taken nothing

 

 

 

Considering Ashley did exactly what the Halls did when he floated SD (though the Halls weren't damned by the City for ripping them off) how are they "morally" different if that's what you're implying?

 

Also what about the price he allegedly wanted off the Arabs in September which would have made him more that £150m?

 

 

 

Shepherd & Hall creamed millions of the trading income out of the club & left it in a disastrous financial state, that's entirely different to money made from selling shares.

 

 

 

The vast majority of the £146m was from selling shares. Yes they did take salaries and dividends but that's small beer compared with what Ashley wanted to and would have made but for the credit crunch.

 

I also object to any money Wise and the rest have had from the club far more more than what Shepherd did.

 

 

[Liam Liam Liam O]

Was just about to post the very same link..

 

• Former owners made £145.8m from Newcastle

• Ashley has put fortune on line and taken nothing

 

 

 

Considering Ashley did exactly what the Halls did when he floated SD (though the Halls weren't damned by the City for ripping them off) how are they "morally" different if that's what you're implying?

 

Also what about the price he allegedly wanted off the Arabs in September which would have made him more that £150m?

 

 

 

Shepherd & Hall creamed millions of the trading income out of the club & left it in a disastrous financial state, that's entirely different to money made from selling shares.

 

 

 

The vast majority of the £146m was from selling shares. Yes they did take salaries and dividends but that's small beer compared with what Ashley wanted to and would have made but for the credit crunch.

 

I also object to any money Wise and the rest have had from the club far more more than what Shepherd did.

 

 

 

You carry on comparing taking profits out of the club which could have been used for player purchases with making money from selling the whole entity though. 

 

I believe they (the Halls & Shepherds) made over £24m by taking dividends & using the club's money to buy their own shares off them.  That £24 million doesn't include their salaries either.

 

Small beer to you perhaps, but more than a couple of players for the football club.

 

 

[NJS]

Was just about to post the very same link..

 

• Former owners made £145.8m from Newcastle

• Ashley has put fortune on line and taken nothing

 

 

 

Considering Ashley did exactly what the Halls did when he floated SD (though the Halls weren't damned by the City for ripping them off) how are they "morally" different if that's what you're implying?

 

Also what about the price he allegedly wanted off the Arabs in September which would have made him more that £150m?

 

 

 

Shepherd & Hall creamed millions of the trading income out of the club & left it in a disastrous financial state, that's entirely different to money made from selling shares.

 

 

 

The vast majority of the £146m was from selling shares. Yes they did take salaries and dividends but that's small beer compared with what Ashley wanted to and would have made but for the credit crunch.

 

I also object to any money Wise and the rest have had from the club far more more than what Shepherd did.

 

 

 

You carry on comparing taking profits out of the club which could have been used for player purchases with making money from selling the whole entity though. 

 

I believe they (the Halls & Shepherds) made over £24m by taking dividends & using the club's money to buy their own shares off them.  That £24 million doesn't include their salaries either.

 

Small beer to you perhaps, but more than a couple of players for the football club.

 

 

 

I always knew the Halls and The Shepherds were in it for the money and never subscribed to their "Geordie nation" bollocks but I was always happy that despite being bastards they wanted the team to succeed (even if there was an element of further financial interest in that) and on the whole did their best to do make that happen.

 

That's why I think they come off better when compared to Ashley's lies.

 

 

[Liam Liam Liam O]

Was just about to post the very same link..

 

Former owners made £145.8m from Newcastle

Ashley has put fortune on line and taken nothing

 

 

 

Considering Ashley did exactly what the Halls did when he floated SD (though the Halls weren't damned by the City for ripping them off) how are they "morally" different if that's what you're implying?

 

Also what about the price he allegedly wanted off the Arabs in September which would have made him more that £150m?

 

 

 

Shepherd & Hall creamed millions of the trading income out of the club & left it in a disastrous financial state, that's entirely different to money made from selling shares.

 

 

 

The vast majority of the £146m was from selling shares. Yes they did take salaries and dividends but that's small beer compared with what Ashley wanted to and would have made but for the credit crunch.

 

I also object to any money Wise and the rest have had from the club far more more than what Shepherd did.

 

 

 

You carry on comparing taking profits out of the club which could have been used for player purchases with making money from selling the whole entity though. 

 

I believe they (the Halls & Shepherds) made over £24m by taking dividends & using the club's money to buy their own shares off them.  That £24 million doesn't include their salaries either.

 

Small beer to you perhaps, but more than a couple of players for the football club.

 

 

 

I always knew the Halls and The Shepherds were in it for the money and never subscribed to their "Geordie nation" bollocks but I was always happy that despite being bastards they wanted the team to succeed (even if there was an element of further financial interest in that) and on the whole did their best to do make that happen.

 

That's why I think they come off better when compared to Ashley's lies.

 

 

 

Except for the additional £24 million which could have been invested in the team?

[OzzieMandias]

Was just about to post the very same link..

 

? Former owners made £145.8m from Newcastle

? Ashley has put fortune on line and taken nothing

 

 

 

Considering Ashley did exactly what the Halls did when he floated SD (though the Halls weren't damned by the City for ripping them off) how are they "morally" different if that's what you're implying?

 

Also what about the price he allegedly wanted off the Arabs in September which would have made him more that £150m?

 

 

 

Shepherd & Hall creamed millions of the trading income out of the club & left it in a disastrous financial state, that's entirely different to money made from selling shares.

 

 

 

The vast majority of the £146m was from selling shares. Yes they did take salaries and dividends but that's small beer compared with what Ashley wanted to and would have made but for the credit crunch.

 

I also object to any money Wise and the rest have had from the club far more more than what Shepherd did.

 

 

 

You carry on comparing taking profits out of the club which could have been used for player purchases with making money from selling the whole entity though. 

 

I believe they (the Halls & Shepherds) made over £24m by taking dividends & using the club's money to buy their own shares off them.  That £24 million doesn't include their salaries either.

 

Small beer to you perhaps, but more than a couple of players for the football club.

 

 

 

I always knew the Halls and The Shepherds were in it for the money and never subscribed to their "Geordie nation" bollocks but I was always happy that despite being bastards they wanted the team to succeed (even if there was an element of further financial interest in that) and on the whole did their best to do make that happen.

 

That's why I think they come off better when compared to Ashley's lies.

 

 

 

You think Ashley wants the team to fail?

[NJS]

Was just about to post the very same link..

 

? Former owners made £145.8m from Newcastle

? Ashley has put fortune on line and taken nothing

 

 

 

Considering Ashley did exactly what the Halls did when he floated SD (though the Halls weren't damned by the City for ripping them off) how are they "morally" different if that's what you're implying?

 

Also what about the price he allegedly wanted off the Arabs in September which would have made him more that £150m?

 

 

 

Shepherd & Hall creamed millions of the trading income out of the club & left it in a disastrous financial state, that's entirely different to money made from selling shares.

 

 

 

The vast majority of the £146m was from selling shares. Yes they did take salaries and dividends but that's small beer compared with what Ashley wanted to and would have made but for the credit crunch.

 

I also object to any money Wise and the rest have had from the club far more more than what Shepherd did.

 

 

 

You carry on comparing taking profits out of the club which could have been used for player purchases with making money from selling the whole entity though. 

 

I believe they (the Halls & Shepherds) made over £24m by taking dividends & using the club's money to buy their own shares off them.  That £24 million doesn't include their salaries either.

 

Small beer to you perhaps, but more than a couple of players for the football club.

 

 

 

I always knew the Halls and The Shepherds were in it for the money and never subscribed to their "Geordie nation" bollocks but I was always happy that despite being bastards they wanted the team to succeed (even if there was an element of further financial interest in that) and on the whole did their best to do make that happen.

 

That's why I think they come off better when compared to Ashley's lies.

 

 

 

You think Ashley wants the team to fail?

 

No but his priority is money - the number one priority of any football club should be the first team imo. That doesn't mean the financial situation should be ignored but I think he has seriously ignored the team.

[Liam Liam Liam O]

Was just about to post the very same link..

 

? Former owners made £145.8m from Newcastle

? Ashley has put fortune on line and taken nothing

 

 

 

Considering Ashley did exactly what the Halls did when he floated SD (though the Halls weren't damned by the City for ripping them off) how are they "morally" different if that's what you're implying?

 

Also what about the price he allegedly wanted off the Arabs in September which would have made him more that £150m?

 

 

 

Shepherd & Hall creamed millions of the trading income out of the club & left it in a disastrous financial state, that's entirely different to money made from selling shares.

 

 

 

The vast majority of the £146m was from selling shares. Yes they did take salaries and dividends but that's small beer compared with what Ashley wanted to and would have made but for the credit crunch.

 

I also object to any money Wise and the rest have had from the club far more more than what Shepherd did.

 

 

 

You carry on comparing taking profits out of the club which could have been used for player purchases with making money from selling the whole entity though. 

 

I believe they (the Halls & Shepherds) made over £24m by taking dividends & using the club's money to buy their own shares off them.  That £24 million doesn't include their salaries either.

 

Small beer to you perhaps, but more than a couple of players for the football club.

 

 

 

I always knew the Halls and The Shepherds were in it for the money and never subscribed to their "Geordie nation" bollocks but I was always happy that despite being bastards they wanted the team to succeed (even if there was an element of further financial interest in that) and on the whole did their best to do make that happen.

 

That's why I think they come off better when compared to Ashley's lies.

 

 

 

You think Ashley wants the team to fail?

 

No but his priority is money - the number one priority of any football club should be the first team imo. That doesn't mean the financial situation should be ignored but I think he has seriously ignored the team.

 

Like skimming off £24million?

[NJS]

Except for the additional £24 million which could have been invested in the team?

 

Fair enough but I don't remember too many windows where we ended up in profit.

 

 

[OzzieMandias]

Was just about to post the very same link..

 

? Former owners made £145.8m from Newcastle

? Ashley has put fortune on line and taken nothing

 

 

 

Considering Ashley did exactly what the Halls did when he floated SD (though the Halls weren't damned by the City for ripping them off) how are they "morally" different if that's what you're implying?

 

Also what about the price he allegedly wanted off the Arabs in September which would have made him more that £150m?

 

 

 

Shepherd & Hall creamed millions of the trading income out of the club & left it in a disastrous financial state, that's entirely different to money made from selling shares.

 

 

 

The vast majority of the £146m was from selling shares. Yes they did take salaries and dividends but that's small beer compared with what Ashley wanted to and would have made but for the credit crunch.

 

I also object to any money Wise and the rest have had from the club far more more than what Shepherd did.

 

 

 

You carry on comparing taking profits out of the club which could have been used for player purchases with making money from selling the whole entity though. 

 

I believe they (the Halls & Shepherds) made over £24m by taking dividends & using the club's money to buy their own shares off them.  That £24 million doesn't include their salaries either.

 

Small beer to you perhaps, but more than a couple of players for the football club.

 

 

 

I always knew the Halls and The Shepherds were in it for the money and never subscribed to their "Geordie nation" bollocks but I was always happy that despite being bastards they wanted the team to succeed (even if there was an element of further financial interest in that) and on the whole did their best to do make that happen.

 

That's why I think they come off better when compared to Ashley's lies.

 

 

 

You think Ashley wants the team to fail?

 

No but his priority is money - the number one priority of any football club should be the first team imo. That doesn't mean the financial situation should be ignored but I think he has seriously ignored the team.

 

Yet he's put in more than the last lot took out, hasn't taken any money out himself, and isn't charging interest on his loan to the club.

[NJS]

Yet he's put in more than the last lot took out, hasn't taken any money out himself, and isn't charging interest on his loan to the club.

 

All will be sorted when he sells.

 

 

[Liam Liam Liam O]

Except for the additional £24 million which could have been invested in the team?

 

Fair enough but I don't remember too many windows where we ended up in profit.

 

 

 

And where has that profit gone?  To stave off the losses already incurred. 

 

You can talk about transfer window profits all you want, but the fact is the financial situation is desperate, as a result of the actions of the previous owners/board/managers.  No money has been taken from the club by its owners.

 

IIRC the summer we only signed Bowyer on a free coincided with club funds being used to buy back shares from them as well.

[Liam Liam Liam O]

Yet he's put in more than the last lot took out, hasn't taken any money out himself, and isn't charging interest on his loan to the club.

 

All will be sorted when he sells.

 

 

 

Who is he selling to like?

[Guest toonlass]

Yet he's put in more than the last lot took out, hasn't taken any money out himself, and isn't charging interest on his loan to the club.

 

All will be sorted when he sells.

 

 

 

Who is he selling to like?

 

Did you not know. NUSC seems to believe that there are a long line of eager buyers queuing up to the Strawberry, cash in hand to buy the club!