The striking thing about Newcastle United’s latest set of robust financial figures is that the club is in debt to two men.
Mike Ashley’s £129m loan to the club means that he remains the central and pivotal figure at St James’ Park. It consolidates his interest and binds the club tightly to a man whose appearances on Tyneside have become increasingly sporadic and whose intentions have become the focus of bitter debate.
But there is another man to whom United owe a sizeable amount: Graham Carr. In these days when Alan Pardew pulls funny faces in an attempt to shift the negativity that has clouded the club, there is something uplifting about the club continuing to overachieve on the recruitment front.
The importance of Carr and the scouting network that has been constructed around him was writ large in the accounts posted on Monday. Of the £9.9m operating profit that Newcastle reported, a staggering £10.6m was down to player amortisation – an accountancy tool intended to assess how far the stars that Newcastle have sold had appreciated in value before they left.
The bottom line is that the £10.6m figure suggests that Newcastle’s squad rose significantly in value during a period where United acted on the instruction of Carr and his team of scouts. What is even more remarkable is that the Magpies managed to appreciate the value of the squad while cutting the wage bill by £3m.
Whichever way you spin, that is pretty solid business from a club that used to regard recruitment as a peculiar Achilles heel. Whatever the other mistakes that Ashley has made in recent years, there can be little doubt that Carr’s eight-year contract was money well spent.
Ashley’s own debt remains static, although it is pushing it to claim – as the club did this week – that it is effectively interest-free. It might be that in banking terms, but the advertising that adorns St James’ Park on behalf of Sports Direct also comes free, and might be worth significant amounts to the club.
The club rightly pointed out that a loan the size of Ashley’s would command interest payments of £8m a year – significantly more than the Magpies would bank from selling those ads.
Perhaps, but if Ashley owns the club personally should a distinction not be drawn between that personal debt and the way his companies deal with the club? The way the owner has done things he benefits both ways: keeping the debt constant while his companies get a global Premier League profile which is not offset against his own debts.
In addition, are we supposed to swallow the idea that the amount of the loan required was not influenced by Ashley’s own mistakes?
Relegation, the sacking of Kevin Keegan and a failure to do due diligence on the club were all errors on Ashley’s watch that contributed to the black hole filled by that interest-free loan, which is a millstone around the club’s collective neck. This is his prerogative. But these latest figures should draw a line under the idea that he is a benefactor of any kind for Newcastle. He is an owner who is utilising the club for his own benefit.
There remains a personal feeling that commercial revenue is disappointing for a club of this size.
Newcastle’s alliances have been with Wonga, a pay-day loan company, and more recently with Papa John’s pizzas. Commercially, Puma remain kit suppliers.
Most of the improved turnover of £95.9m is down to the television deal. As The Mag points out, they are fractionally better off in terms of turnover than in 2006/7, when they recorded a figure of £87.1m with a £25.9m TV deal. That has improved by £8m but with a TV deal worth £51m.
United feel like exactly like what they are at the moment: a club run for the benefit of people who aren’t particularly interested in satisfying a supporter base that yearns for something to believe in.
Everything about the last week has felt designed to appeal to those outside the city walls, from Pardew’s smiling face gesture right through to accounts that were spun as further proof that there is a grand plan unfolding at St James’ Park. For while Pardew says his intervention was intended to persuade the media to become less “miserable”, it also felt like a message to outsiders about the peculiar pressures that he is working under in the North East.
Look at this, it felt like he was saying: I’ve got this team to eighth in the league and the reporters still aren’t happy. Dovetailing with the solid financial figures, it does present a rather different picture to the one that your average match going supporter has been confronted with over recent months.
There may yet be another twist. The narrative of this season, despite the depressing events of the last month, is yet to be written.
Loic Remy’s late winner was another encouraging footnote, but it will take something more sustained to encourage the people of Newcastle that their sustainable club is the new model for the Premier League.