Llambias reveals Ashley’s ‘black hole’ and speaks of healing wounds.
Posted on November 5th, 2009 | 82 Comments |
In the latest salvo of the Ashley counter offensive, Newcastle United’s managing Director, Derek Llambias, has been revealing the depth of Mike Ashley’s financial black hole in an interview for Radio Newcastle. He moaned about the financial meltdown involved when a monster £70 million wages club that is supposed to be geared up for European competition get relegated and much more…
What follows is Llambias’s exchange with Radio Newcastle’s Mick Lowes.
On the financial consequences of relegation, Llambias said:
“It’s been extremely painful – it was a shock, it was unthinkable. We did have a business plan in place at the time that we just put into a cupboard, because we thought we never needed to use it.
“We’ve had to move on since then and it’s given us an opportunity to bring the wages down to an acceptable level in the Premier League, but not in the Championship.
Hailing chief, Chris Hughton, Llambias went on:
“Chris has created a tremendous team spirit that’s reflected on the pitch. Going forward, we hope to maintain that.”
On the financial ‘black hole’ of relegation, he spoke of the hugely different sums involved when an underperforming £70 million wages monster team, a team who should be geared up for euro competition and the revenue that brings gets relegated instead:
“It’s huge. We’ve dropped from £100m revenue to £50m. A good chunk of that is TV money from the Premier League – £40m. We get a parachute payment of £12.5m.
“In the Championship itself you get £2.4m income. You get a drop in your season tickets, attendance and retail – it all drops. That shortfall needs to be made up. Mike is picking the shortfall now and it’s very, very difficult, but we’re getting through it.
“We didn’t fire sale. At the time the press were saying we needed to fire sale, but we didn’t. We purposefully kept a nucleus of the team that we felt could take us up. It’s working and we’ll add to that – Chris will continue to add to the squad.”
However, for those concerned whether Mr Ashley will be bringing a galaxy of stars to Tyneside, Llambias offered little encouragement. On loans he said:
“That’s where we’d like to be – it’s affordable. But if Chris identifies a player that we feel will add value, then we just may go out and buy him.”
On the rather thorny issue of the renaming rights announcement, he understated:
“We could have worded it (the announcement) better, which is why I came out yesterday to try and explain where we are and what we’re trying to achieve. With the renaming it was always going to be whatever brand it was @ St.James’ Park.
“For the remainder of this season, we already have sportsdirect.com on the Gallowgate. We’d like to take that branding through the rest of the stadium and have on the outside where you see St.James now, ‘sportsdirect.com @ St.James’ Park’ to showcase to whoever’s out there who wishes to buy that package.”
Lowes went on to ask “So will there always be signage reminding people that this is St James’s Park?”
Llambias: “In our reign, absolutely. It’s just adding to it. If it brings in a good chunk of money to the club that goes straight to the team, it’s a revenue that we should look at.
“Newcastle United’s history is just incredible. It will go to other stadia – people have to look at maximising their revenues. That’s one part of a stadium that you can use that is under-utilised.”
Lowes: The £20m investment announced last week – how much will go on running costs?:
“In the Championship, every penny plus. It’s a very expensive club to run – we’ve got the highest wage bill in the Championship and that will increase over a period of months to make sure that we give Chris and the team 100% to get us to where we belong.
“I can’t give you a figure (on how much of that will be invested on players). If Chris comes along and says, ‘I need a right winger, I need a creative midfield player – this is the cost’ then that’s the cost and that’s what we have to put in.
“We need to get out of it (the Championship) and then once we’re out of it, we need to stay in the Premier League. We believe that we have got the foundation to get out of this league and we believe that we’ve got the foundation to stay in the Premier League. Let’s hope that we have the team that will take us there.
“It’s very important that the negative press and negativity around the city needs to stop. You need to concentrate on supporting the team. You may not like the administration but we’re here, we’re investing. We’ve made mistakes in the past but we are doing our best. If you get behind our team, your team, it’s necessary.”
Lowes: Is Mike Ashley in it for the long term?
Llambias: “His vision is that he’s going to be here to take it back up the Premier League. I think that’s his goal. Once we’re back up there it’s a review of where we again. He may want to take on a partner, i’m not sure – we’ve not had that conversation.
“Getting back to the Premier League is his total focus. It’s all our focus – let’s get back up to where we belong.”
Lowes: Do you worry about your popularity?
Llambias:“There’s always something you want to change – what would that be? too much to mention, quite honestly. We’re nearly spot on, it’s just that certain decisions took us in a certain direction and it’s very hard to recover from those decisions.
“A combination of time and results – success – will heal the wounds. We’re patient people and the fans will come around eventually. I’ve no idea of what length of time that will be – I may be a very old man, but they will see in the future that we do care.”
Returning to the subject of now permanent manager, Chris Hughton, Llambias gushed:
“Once we focused on taking the club off the market, Chris has done a very good job, the players back him 100% so he was the obvious choice going forward and I think it’s the right choice.
“He’s a really nice guy and he’s got an opinion that we like. We just like what he does.
“It’s been difficult for Chris. He’s been treading water for so long, he’s been the bridesmaid for so long and now he’s the main man and he will put his stamp on it, absolutely.
“Chris can recommend players and the board will have the final say. Mike’s got to put the money in so he’s got to agree to that sort of funding. You need to be as flexible as possible. You can’t be too stubborn about certain players.
“If the number one choice is this and the manager is insistent – but we can’t afford it, then there has to be a number two choice. So it’s a question of ‘Chris, what do you need – give us two or three options for this position and we’ll do our best to get the first one.’
“You need that flexibility and a lot of Premier League clubs will go down the line of recommendation by the manager.
“Mike inherited a very heavy wage bill – and still has some hefty players to pay, but they are good players. They are the guys who are going to get us back up and it’s worth the price if we get back up.
Concluding, Lowes asked Llambias whether the adverse reception to his first announcement of the stadium renaming masterplan. Llambias replied:
“We considered it, but then you have to consider what it brings to the club. On a financial basis it brings a good chunk of money that goes directly to the team. If you want extra players, then we need to bring extra revenue and that is one source of revenue that has been undervalued in the past.
“We’re not taking away St.James’ Park, we’re just adding to it. We will showcase sportsdirect.com until the end of the season and I’m sure we’re going to get a sponsor in for next season.”
The soap continues…