Jump to content

Recommended Posts

From .com: 'It's reported that Ashley faces a £10K fine if a rule breach is proven, while the Govan club could be hit with both financial penalties and expulsion from the Scottish Cup.'

 

Guess who wins again.

Link to post
Share on other sites

Issued with notice of complaint by the SFA. Hearing on January 27th: http://scottishfa.co.uk/scottish_fa_news.cfm?page=2566&newsCategoryID=1&newsID=14110

On SSN now.

 

death penalty iyam

 

:lol: Is it really bad that I said exactly the same thing when this came up on SSN yesterday??

 

Apparently wor lass reckons it's not in the SFA book of applicable punishments for this offense. Not even at Xmas...

Link to post
Share on other sites

Ban lifted on papers apart from Telegraph. Only took 14 months.

 

This right? ncj will be wedged up his sphincter again double quick, no doubt.

yep, think it was lifted before the Chelsea match (or seem to recall seeing the journos mention it anyway)

http://www.pressgazette.co.uk/newcastle-united-lifts-ban-local-press-telegraph-journalists-remain-barred?

 

 

Link to post
Share on other sites

I have previously written about the large drops in Commercial and Matchday revenue at Newcastle United under Mike Ashley.  Clubs around the world are compared by the likes of Deloitte and the measure they use to gauge the size of a club is revenue, not profit.  A club that wants to be considered amongst the biggest is always looking to maximise revenue, but this is not something that concerns Mike Ashley.  Ashley follows the maxim from the business world that "Turnover is vanity, profit is sanity".  Though it's rarely one used in top class sports where clubs almost always look to re-invest any profits to maintain a challenge at the highest level.

 

Many times I have been taken to task for highlighting the dwindling non-TV revenues at the club because Mike Ashley has purposely outsourced some of the costliest enterprises in order to cut expenses.  It makes sense to sell off an area of the club that is either not profitable, or offers low margins, if another company can make it more profitable and will pay the club a higher amount for the contract than the club were able to generate for themselves.

 

However, this defense of Ashley's approach only deserves credence if it improves the overall profitability of the club.  Newcastle have sacrificed profitable streams of business to other companies, and the unanswered question is to what extent that has helped or harmed the clubs finances?  Are those deals more beneficial to the outsourcer or the outsourcee?  I don't think it's possible to determine this accurately from the figures reported in the accounts, but I want to get an idea.

 

http://i57.tinypic.com/6xtd2e.png

 

Non-TV revenue streams and non-wage related expenses all peaked around 2007/2008.  After staff wages the club has reduced outgoing expenses by £8.9m from the peak.  Whether by selling off catering departments, selling (giving?) the retail wing to Sports Direct or refusing Steve Stone any free tickets for his cousin.

 

In similar timescales the combined reduction in matchday and Commercial income has been £16.3m (£5.8m and £10.5m respectively).  Notably the biggest drop of those two has not been from ticket sales, somewhat debunking the argument that people have made about cheaper tickets impacting the bottom line, the drop in commercial income is almost twice as much.  That's the area that free advertising and outsourcing retail would have impacted.

 

The "profitability" column is the one that’s my attempt to get an idea of the cost of Ashley's business model for the club.  It's the only column not taken directly from the accounts, but is instead a calculation from the other values (Matchday and Commercial Income minus Other Expenses).  This figure reduced every year under Mike Ashley from a peak of £38.7m when he took over to a low of £12.6m after relegation, a 67% reduction.  It's most recently recovered to a current value of £25.6m, which is only 34% down, on the peak value.

 

There’s a big caveat to remember when looking at this figure.  The biggest expense in any outsourced department will likely have been the staff and not accounting for that leads to inaccuracy.  The wage figure includes players and non-players across the club.  In my view the catering and retail staff would be only a small fraction of the total, but it does mean that the profitability figure quoted for 2006 has a higher margin of error than the figure for 2013, player wages becoming a higher proportion of the overall figure as business units are outsourced.  If anyone has any idea of the figures for off-field wages I’d love to get the extra accuracy.  However I think the amounts are indicative of not only reduced revenue but also of reduced profitability at the club outside of TV income.  I don’t believe catering and retail staff earned enough to make up the £13m difference from 2006, a quarter of the overall wage bill at the club at that time (£52m).

 

In my view this, confirms that profitable areas of the club have been handed to Sports Direct (among others) at a cost to Newcastle United.

 

 

Can people pick holes in this?

Link to post
Share on other sites

I see Ashley lost millions of pounds today following a slump in a company listed on AIM called MY SALE along with Sir Philip Greene

 

http://www.cityam.com/205751/sir-philip-green-and-mike-ashley-lose-millions-after-mysale-slump

 

lost a few more quid also when he invested in Tesco in October.

He'd only have lost money if he sold all his shares when they were at their lowest. As far as I've read he didn't sell any shares. Buying shares usually involves taking a long term view. Mike Ashley can afford to wait decades for the shares to recover.

Link to post
Share on other sites

I see Ashley lost millions of pounds today following a slump in a company listed on AIM called MY SALE along with Sir Philip Greene

 

http://www.cityam.com/205751/sir-philip-green-and-mike-ashley-lose-millions-after-mysale-slump

 

lost a few more quid also when he invested in Tesco in October.

He'd only have lost money if he sold all his shares when they were at their lowest. As far as I've read he didn't sell any shares. Buying shares usually involves taking a long term view. Mike Ashley can afford to wait decades for the shares to recover.

 

He's only essentially lost millions of pounds of equity and on the proviso that the company fails to recover. Sensationalism, but I suppose not totally inaccurate.

Link to post
Share on other sites

Guest
This topic is now closed to further replies.
×
×
  • Create New...