Do Newcastle United actually have £35m to spend?
Posted on July 1st, 2011 | 38 Comments |
The transfer market is a strange and sometimes scary place, with confusion abound by exactly how much money we apparently have, others have the knowledge only provided by Football Manager and FIFA and you’d be surprised how correct that actually is. The long and short is, we have never had £35m to spend – never.
There’s a lot of confusion around exactly what we have to spend since the sale of local lad and full time thug Andy Carroll to Liverpool for £35m with £30 of that being handed over in cold, hard cash – just how we like it. Alan Pardew himself stated that the money was to be reinvested in the squad and even went as far as to say that he wanted it solely for players but unfortunately, that isn’t how it works.
At the start of the season, the manager and the chairman sits down and discusses season targets, contracts, incoming players, outgoing players and everything else you’d come to associate with a professional football club. They then decide on how much money they will need for the season; primarily both transfer windows. Anybody in the game will tell you that a manager has two budgets for a season: one for transfers, and one for wages.
Agent fees, signing on fees and other expenditures will fall under the transfer budget and that will need to be significantly larger than the wage budget which is still likely to be a few million pounds strong. Now the key phrase here is “agent fees”. The people everybody could probably do without, the horrible little mercenaries who look for the best deal for their player but also for themselves – and it’s often extortionate.
When a player is reported to be bought for £2.5m, we’ve actually probably played closer to twice that based on agent fees, signing on fees and, depending on whether we’re fronting other costs, travel, hotels and everything that goes with relocation – this gets especially expensive when you start signing players from abroad. There’s also the rarely reported ‘signing off fee’ which is where a player effectively tries to get one last payday from their now former club. The less said about that the better.
Since the sale of Andy Carroll, we have signed John Carver on a permanent basis, Tioté on an improved 4.5 year deal, sold Kevin Nolan, reportedly given Danny Simpson and improved contract, signed Sylvain Marveaux, Demba Ba and Yohan Cabaye, all of which on 5 year contracts, with exception to Ba who is contracted to us for 3 years, and they’re all likely to be on 40 to 50k per week.
None of us know how the board and the manager are handling contracts but we can make a good estimation that Newcastle United will be taking a years worth of wages for each player and putting it aside. I’m also going to assume that this is only for new players or players on new contracts.
Once you have split that lump sum up into chunks for the sake of transfers and wages, we realise that we don’t necessarily have that much money for £20m signings. Yes, a marquee signing would be nice but is it really practical and good for us in the long run? We have seen overspending at our club before and it almost ruined the club along with the drop in fees and finances that relegation brought.
Nobody knows how that money will be reinvested, but it’s not as simple as taking £35m and spending it all on transfers and agent fees. There were rumours that Mike Ashley was going to bankroll us to the tune of £15m, giving us a huge £50m of pocket money, but it seems more likely that money was to cover wages for the coming campaign – and I’d like that to be true. More money for playing staff!
“But Thump! What about the money they make from seat sales, season tickets, rent (for the businesses housed in SJP) and food, drink and match day programmes? What about that?”
That money will go directly back into respective areas. Money from tickets will go into the coffers of SJP maintenance (hopefully for a new PA system), likewise with rent money. Food and drink goes back into food and drink with finances made from match day programmes being given back to the printers and graphic designers as well as writers on the books at SJP. Lest we forget the security, stewards, website costs and the other thousand things I’m not remembering. All of this is considered overhead.
Newcastle United is not just a football club – it’s a business and it must be ran as that. Yes it’s easy for us to forget there’s more to the club than just the football but it’s a fact we must remember and embrace.
We must also remember that each player comes with a wage demand and that will inevitably be coming out of that £35m. I won’t do the math but I’m sure you get a good picture of how that impacts our actual net spend during the transfer window.
On a more positive note, we have so far signed three players on a free with a reported £4.5m for Marveaux with the outgoing Kevin Nolan for the same fee meaning our net spend is primarily on wages – meaning the better part of our transfer budget is still ready for spending. I believe we will have a marquee signing for a sizeable fee but who that will be is anybodies guess.
Of course, Kevin Nolan’s leaving us resulted in his wages being freed up to be spread elsewhere and with the likes of Xisco and Alan Smith rumoured to be on their way, that’s £120k a week in free wages to go to players who, in all fairness, probably deserve it more.
With Alan Pardew working his magic in the transfer market and Graham Carr doing his outstanding work, I’m sure you’ll all agree that we’ve had a good window so far and with it officially opening today, we’re in good stead.
All of that aside we can’t escape the £35m point – we have a sizeable chunk of cash that is, quite literally, doing nothing but increasing in interest. Why is it not being spent? I’m all for not paying over the odds but the fans and players have been screaming for a big name signing. I’m not talking Ronaldo or Messi but a player we can get truly excited about; somebody we all recognise. Sturridge, N’Zog – I can go through the list of Premier League players and give a good list of players I’d love to see in the black and white.
Of course, this may all be irrelevant in the next couple of weeks. All we can do is sit tight and wait to see who is coming through the door – Pardew, and Ashley, will be judged on September 1st.
In Carr we trust.