Mike Ashley's Newcastle United: Cash Cow at tipping point.

It seems Newcastle United has reached it's primed level as far as owner, Mike Ashley is concerned.

Having got the Club finance into profit, it seems there is going to be another huge summer of bad gambling from the Sports Direct mogul.

Not gambling in the literal sense, obviously, as that would require a financial outlay. No, this is more about the current squad being shipped-out piece by piece, and then the money received, not a penny more, will be "re-invested" back into the squad.

So although there will be transfer activity, Newcastle United's Management will not allow Pardew (or whoever actually is in charge of transfers) to exceed what has been received.

It's not a case of the Manager being given a chance to progress, he's being told to start again. Pretty much.

There are set boundary's for the transfer & wages finance and in most cases that's sound judgement.

Trouble being, that in the case of Newcastle United, the budgets set are far beneath what can actually be afforded.

With the Barclay's Premier League & Sky pumping mega-millions into the game at this top level, you've really got to question the fundamental calculations of the Newcastle United Board members, or perhaps just Mike Ashley.

The Sky Bet Championship Play-Off Final is touted as the golden ticket to the land of milk & honey because of the massive boost in the clubs income. Newcastle United have been in this land for a few years now but, have been sat in the waiting room for far too long and it seems Mike Ashley is intent on keeping us there.

And breath...

 

Early voting suggests many of you think the same.

 

But did big Mike not save you from oblivion?

 

What's oblivion like? Having less debt than all the other big clubs?

 

I don't know if we're a cash cow, not directly anyway but we are an advertising cow.

 

Well we are a cash cow now, because he's not putting in the money he's making, he's just reaping the profits, especially on transfers. The danger is the fact teams in this league usually have to spend millions to stay where they are, never mind progress.

We're doing pretty well in that we've managed to keep this model without being relegated again. So far.

I think most fans were quite happy with what he was doing, making the books balance etc... But most of us naively assumed that profits, at least partially, would be pumped back into making the team better. But that is not a fundamental aim of this regime, and never will be.

 

I went yes, more than anything because I've never liked him. In reality I'm probably in the camp of he just sees as another business to make a profit out of. Its what he does. Its always gonna piss off the fans when there is a lack of ambition. From his point fo view though, he is bucking the trend with 90% of football clubs. We are just a small piece of his financial empire.

 

I would have voted........ but I didnt and I will explain why.

In the last couple of years you could say YES as he has had his free advertising, big sales and no reinvestment....

But now because of the lack of reinvestment there is no money to be made. The point really comes down to pure business, when he buys a shirt and then subsequently sells it he makes a small profit. Tiny in fact. But he shifts millions of them. With us its small volume and big profit. The problem is now we have no players to actually sell to make a profit without it seriously affecting our position in the premier league.

There is no product left. So where is he going to get the money from....

Let me answer that... the new TV sponsorship. But that is provided we stay in the Premier League.

To stay in the premiership we need premiership quality players. To get them you have to produce them or buy them. We are doing niether.

Thus my conclusion is that he HAS to invest money into playing staff now or we will get relegated. Thus losing the company money. Either way he is going to be down.

 

It's all very simple, isn't it? He paid 'x', which the club still owes him as part of the interest-free loan and in its' value. He has no interest or intention of paying a single cent of his own money into the club, this has been clear since day one, the only difference was in being relegated the club had to borrow some. Since then, we've got a very finite budget based solely on what the club can afford, and an even more finite wage structure, which means we're operating on fumes. We entrusted the last majority of transfer windows, inexplicably, to an incompetent boob in Joe Kinnear and now have the utterly inexperience Lee Charnley doing the negotiating, pretty much reading from a teleprompter written by Mike Ashley. The lack of trust in Alan Pardew is evident, as is the lack of interest in appointing anyone who may cost a few bob to support. We are a closed book, destined for failure, locked away behind the misguided arrogance of the owner and unchallenged due to the "I can't believe my luck" of both our manager and managing director. We will implode, via relegation, at some point, unless Ashley swallows his own pride, accepts that football isn't just some sums to be done on an Excel spreadsheet and pays what needs to be paid.

And we have to bear in mind that he will make no such change because we want or demand it, or because he feels compassion or empathy, or because he suddenly discovers a sense of ambition - he will do so for one reason, and that's if staying in the Premier League is important enough for his S***** D***** branding. If and when he senses that cost of supporting NUFC outweights the benefits of the advertising, or brokers a deal somewhere else to tout his tat, he'll go. Not a day before, but more or less the day after.

 

Aye thats about right - you see some of the debts that they talk about and it makes you wonder how they are still in business

 

He's a bad egg is Mike, I reckon we should have a boycott. Failing I vote for drinking lots of rum and not really giving a ****.

 

I voted "No" but the question is meaningless unless you define the terms.

Is Ashlye drawing a stream of cash out of NUFC ? No. Not my opinion, it's in the audited financials.

Does he get free advertising ? Yes, but he provides free financing so that is more or less a wash.

Does Ashley have a plan to be able to draw a cash stream out of NUFC in the future ? Quite possibly.

Does Ashlye plan to make a profit out of owning NUFC one way or another ? Of course.

 

Let's just skip the boycott. So you an aficionado, old sport? I do enjoy a drop of the golden stuff, myself. Cuba Libre is my personal favorite beverage, though a Dark & Stormy goes down a treat. My personal preference (everyday affordability!) is either Mount Gay, Appletons or a Havana Club Anejo Especial.

And none of that spiced malarky.

 

It's clear that some part of the Sports Direct growth can be attributed to it's association with NUFC and the linked marketing opportunities. The hardest part is actually trying to quantify it.

 

Realistically though, if you owned 100% of a football club and it's entire fan base kept telling you that you were a fat ****er, then what incentive is there for progression? I'm asking a deadly serious question here, regardless of whether he's spending NUFC's money or his own private money (although it's all technically his), for him to turn you into serious top 4 contenders consistently, you'd require a wage budget that would probably double your current one and at least £150m to £200m plus £30m per year on player acquisitions.

All that for the glory of the people who call him a fat ****er non-stop.

Alternatively, he could spend very little and manage to keep you in the division, idling without any purpose, but he makes more money personally.

 

Hes a fat turd who will stick around like ****e to a blanket... he is getting financial benefit from owning us...

we are stuck with him, I just wish he would buy rangers when they rise to top again...

 

I don't think Ashley needs to quantify it, does he? There's no need for such accountability, the finite detail always evades big business. In basic terms, since he bought NUFC/floated SD, the share price has gone through the roof, revenues exceed annual targets and it's all happening on other shores with minimal investment in advertising. Whether it's just because of acquisition, whether it's because their cheap n cheerful model just outstrips the competition and its all about price is just opinions. If he wanted to employ a team of economists to work out exactly where the growth is coming from, he would. But I suspect it's just so cheap to use NUFC as an advertising platform, why bother? The reach of the PL has just grown again, we're in World Cup year which will also have an impact on his shops - in fact, I suspect the global NUFC platform coupled with the WC will have a ridiculous effect on SD profits. And how much has he spent on NUFC, actually spent - in Roman Abramovic terms? Not a bean.

 

Bang on. Catch-22, of sorts, though if the people of Newcastle threw a party in his honour, I don't think he'd give two hoots and wouldn't change the model.

Sir John Hall said, categorically, that Mike Ashley was buying this club to grant his main brand - Sports Direct - global reach. That's what's happening, the rest is just angry fans, none of whom have the money to do anything. And I dare say if a geordie went to Ashley with a cheque, the price would double anyway.

 

Buying Rangers is of no consequence. The CL has strict advertising rules, so SD wouldn't be on any hoarding without him having to pay UEFA. The SPL has no audience. He's bought some shares in Rangers to make some money out of them, he is well aware that Rangers does not run itself.

As I said, and will keep repeating, until it costs too much to keep NUFC up, he will remain. He is here for PL advertising for SD, the end. If SD plateau's out and revenues stagnate, he may change strategy. If the PL becomes more stringent, a la UEFA, with its advertising rules, then he may change strategy. But no part of him wants to invest in NUFC, no part of him needs to sell it. Stuck. As DMW says, we might as well just work together to understand how the hell we can get any enjoyment from it.

 

He started off fairly good in terms of the fans though, wasn't he one of the lads? Drinking in town with the fans and so on? It went sour when he fired Keegan and the fans jumped on his back. Keegan walked away squeaky clean and the fans attacked Ashley, not allowing for teething problems with him considering he had never owned a sports club before. Then came the financial meltdown of a global economy from which he must have suffered as well, obviously just bad luck but you lot carried on at him.

If I was Ashley I'd not invest in Newcastle either, I would have no interest in satisfying the grumbles of a bunch of people who hate my guts. As for the Rangers thing, that's clutching at straws, even with their CL money (if they get back there) they won't be turning over anything like Newcastle are, a quick look at Celtic's turnover for last year will tell you that.