What has Newcastle United ever done for Mike Ashley (and Sports Direct)?

Posted on June 29th, 2012 | 62 Comments |

Sports Direct sign, St James' Park.
Cheap and nasty.
There has been something of a rehabiltation of the reputation of Mike Ashley at Newcastle United recently.

This, of course, has been due largely to the club’s generally upward trajectory in terms of it’s League position in recent seasons under Chris Hughton and Alan Pardew, as well as some successes in the transfer market since Ashley and Llambias cast their their three casino aquaintances adrift and let Chris Hughton bring in a proper chief scout, a move which has been highly beneficial for the club so far.

Less obviously, perhaps, there has also been a relentless PR campaign run through the media on all levels. Like the current coalition government, much has been said to demonise the previous administration, presenting Ashley as some kind of messiah type figure who made tough choices to save the club from certain liquidation as a great benevolent gesture to the people of Tyneside. But, according to the narrative, this has been a thankless task, with Geordie ingrates not showing the suitable appreciation of his selfless largesse. Admittedly, this isn’t the most difficult thing to do when the targets are the likes of Freddy Shepherd and Douglas Hall. According to a peculiar logic, much has also been made of what Ashley’s alleged financial “backing” of the club in terms of making a £140 million loan to himself, which is repayable on demand by the club, to save himself from paying high interest rates on his own Newcastle United debts. The term “clearing” the club’s debts has been used so often that many fans are still oblivious to the fact that the club is now actually far more in debt than it was when Ashley assumed control of the club in 2007.

However, although all who have been to the stadium formerly known as St James’ Park, as well as those who have seen it on television, have noticed the relentless encroachment of Sports Direct on the fabric of the once proud edifice, with no camera angle left uncovered (including the sky); one question which has been asked less often is: What has Newcastle United done for Mike Ashley and his most important business interest, Sports Direct International PLC?

It started with a single sign on the top of the Gallowgate end of the stadium, eventually spreading like a tumour over the roof of the Gallowgate for TV helicopter shots, and eventually all around the stadium, inside, outside, in post match interviews and so on. Then of course, there was the renaming of stadium itself in two stages, the first of which added Sports Direct to the stadium’s original name in November, 2009. Despite a promise to fans from Derek Llambias to always keep the St James’ Park name, Ashley inevitably reneged on this, eventually discarding the original name entirely two years later in November, 2011.

I was originally inspired to write this piece quite some time ago with the news that Ashley will almost certainly be awarded an ever increasing bonus (which currently stands at almost £24 million) by Sports Direct. It is based on the company meeting a series of “EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation), however the large sums involved have also been justified on a platform of providing extensive free publicity for the company through his other business interest, Newcastle United Football Club. I also noticed some time ago that Sports Direct was, and still is undercutting Newcastle United’s own club shop, and other outlets, by almost 20% on replica shirts, a conflict of interest which, along with the extensive free publicity for Sports Direct, is damaging the club’s merchandising revenue.

Whilst the parameters for Ashley’s so called “Super Stretch” bonus scheme have been based on profit targets, Ashley has already benefitted hugely from Sports Direct’s radically improved figures. At the point in time (November 2009) when the first rename of St James’ Park was announced to the consternation of fans, when the Sports Directification of Newcastle United really started in earnest, Sports Direct’s share price was a lowly £1 and flatlining (see illustration). At the time, Newcastle United were in the Championship, and still in the shadows relatively speaking, so the price kept fairly steady for a while. However, as we all know, the club eventually acheived promotion at the first attempt that season under then manager, Chris Hughton. As soon as Newcastle United made their home return against Aston Villa, an incredible 6-0 victory in front of the cameras of ESPN, the share price proceeded to rise markedly, and has hardly stopped since, rising in line with the club’s fortunes. On the close of trading as of Friday, June 22nd, 2012, it was £3.05, over three times as much. This means that in November, 2009, Ashley’s holding in Sports Direct International PLC was worth around £425 million according to the market. At the time, his total net worth was estimated to be as low as a mere £700 million. Ashley’s holding in Sports Direct is now around £1.3 billion, a rise of around £875 million, and his total net worth is now estimated to be worth around £1.7 billion, a rise of as much as £1 billion. Of course, this is many times what the whole of Newcastle United is worth at it’s current valuation, especially so with Ashley’s £140 million debt hanging over it.

Sports Direct share price

Sports Direct’s share price ticker.

However, Mike Ashley has acknowledged none of the considerable benefits the ownership of Newcastle United has brought to him, with his cipher at the club, Derek Llambias, frequently berating fans for not showing due deference and gratitude for his great charitable gesture in buying the club as a promotional vehicle for his sportswear company. With a breathaking effrontery, the club’s Managing Director has made made statements such as:

“This club can’t support itself without the financial backing of Mike Ashley; we still rely heavily on the owner. To date Mike has invested over £280m into the club, including £140m in interest-free loans. For him to continue to support the club, he has to be interested and enthused to do so. He deserves credit for his financial support but a section of supporters don’t make him feel welcome at St James’ Park, or when he attends away games.”

Of course, I am NOT saying that the Sports Direct’s fortunes rising along with those of Newcastle United’s is a bad thing on it’s own, far from it. I am also not silly enough to credit all, or even most of this rise to the extensive publicity Sports Direct have received through Ashley’s Newcastle United vehicle. Other factors such as Sports Direct share bonus incentive scheme for it’s Oberkapos, more highly ranked employees on real employment contracts rather than the hard pressed drones on minimum wage zero hour contracts, have undoubtedly played a major part. However, the huge exposure through the worldwide media of Premiership TV must have helped significantly. After all, if it didn’t, why has Ashley and his cipher at the club, Llambias, been so aggressive in pushing it through against such vociferous opposition? As for the strange idea that this is some kind of “showcase” to attract another sponsor, virtually everyone in the marketing industry, except for the one employed by Ashley, immediately saw through Llambias’ claims that this was a “showcase” for to attract outside sponsorship what it was, a sham:

“Arguably the most bizarre decision made by the club, however, is to brand the stadium as the S_____ D_____ A____ (named after Mike Ashley’s sports goods company) for a year to showcase the opportunity. What it has showcased to date is the sheer naivety of the club’s board. First, naming rights deals work over a long-term. They are not used for short-term tactical marketing or generating brand awareness but for long-term relationships and brand building.

Look at naming rights deals around the globe and it is very rare to find any that run for less than five years and most significant examples run for 10 years at minimum. It’s difficult to see how the Sports Direct Arena name can be activated to create a ‘showcase’. There is little time to do anything significant to bring the new name to life, especially with such universal derision among the football, media and marketing communities.”

IMR sports marketing & sponsorship intelligence.

No, it is a long term relationship with Sports Direct, with no gain whatsover for the club. On the contrary, the complete Sports Directification of the club is almost certainly a massive turn off to potential outside sponsorship, who don’t want to be drowned out by the ridiculously excessive and tacky SD rebranding of the club. Despite the undoubted advances made in factors such as the wages to turnover ratio of the club and so on, much of this has been cancelled out by the clubs very low commercial revenues, which are amongst the lowest in the Premiership, a ridiculous situation for a club the size of Newcastle United when you look at other clubs on a similar level. To put things into some kind of perspective, Liverpool FC receive £45 million per year in shirt sponsorship revenue alone from American shirt company, Under Armour, and Standard Chartered bank. Newcastle United’s loss is Sports Direct’s gain, but this is no loss to Ashley bearing in mind the great advantage it gives to his primary business interest.

Now the club finds itself in European competition, it’s time for some payback from Ashley in terms of reinforcing the squad, and an end to the almost constant chicanery would go amiss either.

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NUFCBlog Author: workyticket workyticket has written 1055 articles on this blog.

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62 Responses

  1. yawn yawn yawn

    who cares
    john hall had ashopping centre, mckeag a solicitors practice , freddy had his engineering and even stan seymur ad a sports shop,

    i cared little about those as well

    yet again if theres nothing positive to say lets have a moan at ashley

    grow up

  2. His association with us has raised his profile to the general public no-end, as a result he himself and his company are well known to the public, this association is one of the reasons why SD have became so popular, we have done a lot more for him than what most people would imagine, before us it was a case of who is Mike Ashley, he is now a well known character whose business has benefitted greatly

  3. Good article. The widespread acceptance of the damage done to the clubs identify is a travesty.

  4. Ashley’s propaganda and half truths have been swallowed hook line and sinker by the vast majority of fans. Ashley is laughing at us all. A great piece which hopefully lifts the fog of propaganda from the eyes of the more gullable among us.

  5. Tbh i flitted through this article again and wondered what your point was. We are in a situation caused by the world economy and that sadly means footy is a luxury that some people cannot afford. Over the past 6 years or so we have had some SHOCKING players with some shocking wages most of which have since been shown the door. Clubs taking a backwards step to going forward is maybe something that other premier league clubs should look at. Manshitty spent an astronomical amount on players and inflated wages and there is no way they can sustain this but their downfall is going to have a knock on affect that will probably somewhere along the line bring down the transfer market worldwide. MA and SD maybe doing things on the cheap but we know NOTHING of player contracts and tbh i would rather see a million go in the arse pocket of a decent player in wages than to some club. If we were going backwards again i would be on board with the whinging masses, i agree that losing the SJP name is a tragedy but the club is moving forward and while “troublemakers” have almost become a distant memory for the club and we are NO LONGER in the papers for the wrong reasons i will continue to support my team and enjoy the product they are putting out.

  6. Ashley is a business man and will always act as one.We are supporters/fans and will always act as such.The best we can possibly hope for is a little common ground in between.

  7. The biggest point made in this article is the heinous loss of revenue from sponsors due to Ashley whoring sports direct for free everywhere. Compared to other premier league clubs sponsor revenues this represents a massive loss of finances to the club and a huge tax free bonus to Sports Directs portfolio. We simply cannot afford not to be getting these millions in revenue. The finances need to go to newcastle not sports direct.

  8. Apparently we’ve signed Curits Good the 6ft2 Melbourne CB…for 400k.

    And improved our offer for Debucey the French RB, to £6m.

    And we’re in Holland trying to tie up Luuk De Jong…

  9. Nothing quells a fevered, febrile Geordie brow like the Lads doing well in the league.

    ‘Feel good factor!’

    Though it could be propaganda, but that would amount to an excellent spin machine & credit due wouldn’t it?

    Oh! I’m confused!

    Brilliant plan/mistakes, here comes the little yella van!

    Aaaaarrrrggggghhhhh!

    :)

  10. Yeah some of us got it, but thanks for laying it out so well.
    One wonders what would have become of the club had Ashley not taken over ?
    Some (apparently most) really don’t give a rats ass, as long as the side does well.
    And yeah it’s an eyesore, all those cheap “sports Direct” signs wherever one looks and yes Ashley and his corporation is coining it, at the expense of “The club”.
    Unfortunately it’s his toy he bought it and is free to do whatever he pleases.
    However that does’nt mean those opposed to his policies should be grateful and just shut their mouths, after all NUFC is an old established club, with traditions that extend a hundred years before Ashley appeared on the scene.
    To blatantly trample on those traditions, not to mention the re-directing of revenue from the club to Sports Direct, may be in fact legal, but it’s ripping off the club, as is his direct competition with the sports shop for shirt sales.
    As for the improvement in the quality of the side and the fact Ashley is now spending money on quality players, all part of the learning curve.
    It finally became apparent that you are going nowhere with a bunch of £1m. & £2m. quid signings and no one wants to cover a mediocre side in the sports pages, therefore no publicity.
    Believe it there’s a master plan in place to use the club, as part of the overall link-up with sports direct being the main beneficiary and NUFC as the source of advertising.
    IMO there was never any intention of renting the name of the stadium to any outside bidder (again we were lied to)
    But seems the majority of fans though they claim to be upset about the loss of the venerable name St. James’ Park, are willing to forget about it and happy enough to make the trade for an improved side.
    What does that mean, obvious, go figure !

  11. Milner says:
    June 29, 2012 at 10:56 am

    “Apparently we’ve signed Curits”

    I thought that was something rude when I first read it, Milner.

  12. There will always be some pathetic moaners writing rubbish like this unfortunately. Ashley is a very smart businessman and knows what he’s doing. He’s the best thing that ever happpened to this club so just shut up and get behind the team you moron!

  13. Anyone know the stock exchange symbol for Sports Direct? I was thinking of jumping on board..

  14. ChasNUFC says:
    June 29, 2012 at 5:43 pm

    “Ashley is a very smart businessman and knows what he’s doing.”

    I agree, Chas, but the question is who’s he doing it for when he has a conflict of interest and can make more by damaging the interests of NUFC for the benefit of his other concern?

    Thanks for referring to me as a “moron” BTW. It’s good to know that intelligent and reasoned debate isn’t dead. :-)

  15. Geez… Listen, it will never be perfect, it werent when the Halls were here, it werent when fat fred ran the joint and it aint now. But it’s still a damn lot better than it have been for as far as i remember… The Keegan days were good, but short sighted and left us without a good foundation to build on. We gentlemen, might just experience the start of an era build on such a foundation… Enjoy

  16. hoosiertoon says:
    June 29, 2012 at 6:13 pm

    “Anyone know the stock exchange symbol for Sports Direct? I was thinking of jumping on board..”

    LSE:SPD, hoosiertoon. LSE being “London Stock Exchange” and SPD being “Sports Direct International PLC”

    You will be cursed though ;-)

  17. A very good eye opening article, but I think it will be lost on most fans so long as we’re doing well on the pitch.

  18. No worries Worky, looked at it, can’t possibly see it shooting any higher than it already is. Would have been nice to buy some when it was around 1 though I can tell you that..coulda made quite the profit.

    And I do suppose I have my eternal soul to watch out for as well, probably for the best it’s that way haha

  19. I’ve just been reading the “football365” mailbox and people are arguing about Catenaccio. Chuck and Worky, are you moonlighting on another website?

  20. bb says:

    yawn yawn yawn

    who cares
    john hall had ashopping centre, mckeag a solicitors practice , freddy had his engineering and even stan seymur ad a sports shop,

    i cared little about those as well

    yet again if theres nothing positive to say lets have a moan at ashley

    grow up”

    There must be an equivalent internet version of sod’s law for blogs. “If someone can show their ignorance then inevitably they will on a blog” ???

    I’m pretty sure McKeag’s solicitors didnt trade on a pan european basis and Shepherds Offshore hadnt got plans for worldwide domination :)

    Maybe the previous ownere didnt have such a highly trained bunch of internet muppets prepared to attack every critical article that turns up on the web ?

  21. GS says:

    “I’ve just been reading the “football365″ mailbox and people are arguing about Catenaccio. Chuck and Worky, are you moonlighting on another website?”

    Its what football is all about GS. You can have great players working within a shite system yet you can have ordinary players playing to an effective team plan.

    http://news.bbc.co.uk/sport1/hi/football/euro_2004/3860105.stm

    Football formations work when you have players committed to the plan and a master tactician who can see beyond plan A and implement it.

  22. Danny “the wedding planner” Guthrie is off to Reading for nowt. How much could we have got for him if we’d run the show like a proper football club and offered DG a new contract a year ago ? Then sold him ?

  23. AndyMac @23: I have decided you are a genius. You can turn any comment into a dig at Pardwho :)

  24. GS says:

    “AndyMac @23: I have decided you are a genius. You can turn any comment into a dig at Pardwho :)”

    Soz GS but where, @23, does it mention “Silver Haired Sycophant” ????

    But he aint no genius either :lol:

  25. Gotta go for a summer break but before I do, keep up the good work WT otherwise the rest of the NUFC blog world will accept the bullshit that comes out of SJP and…………..ooops ssems they already do ???

    Reminds me of that old saying, “You can lead a Geordie to SJP but you can’t make them understand they’re being shafted” :(

  26. Hope you have a nice time, Andy!

    In the latest clampdown on benefit scroungers, it’s been announced that Prince Charles will only getting a 12% pay rise this year. These are tough times and we’re all in this together.

  27. ChasNUFC stop licking things that come out of Ashley and go outside have a coffee,take your dog for a walk , go into bush , make some love. This article is spot on.

  28. Another good n intresting artical Worky.all this cash the fat controller is bleeding from NUFC is disgusting n should be made illegal.theres no other way to put it than fraud….
    On the transfer front i also read like most supporters that we had upped our Debuchy bid to £6mill.we had people in holland trying to sort out the De Jong capture aswell as the other Ajax player Anita.these 3players i was hearing would set us back roughly £20mill.with us losing Guthrie,Lovenkrans n probaly Besty this still leaves us well short ov options wiv a long hard season ahead,if we get a couple ov injuries to key players we are going to be well f*#@%d and it could quite easily turn out to be a real fight to survive when this should be the season we kick on from a excellent season just gone.so lets hope there are more than just the 3names mentioned walking thru the St James’ Park doors.if your reading this Ashely get your hand in your pocket n spend some ov that tax free cash you earn off NUFC n invest in yours n our club

  29. Any word on de jong and douglas yet? according to sky sports nufc representatives are over there trying to tie up deals. also if we get debuchy, anita, that young aussie lad good, and send a cheeky deal barnettas way and we’ll be flying next season.

  30. Pity Guthrie had to leave.
    But he ain’t getting any younger & needs regular first team games, which he’ll get at reading. I reckon a few more established prem clubs have missed a trick there like.
    Good player, sadly little more than back up here, so had to go.
    Thanx for your input Danny, all the best Lad!
    ;)

  31. Raghav.nufc says:
    June 29, 2012 at 9:25 pm

    “ChasNUFC stop licking things that come out of Ashley”

    That put me right off me dinner, Raghav!

    CLiNT FLiCK says:
    June 29, 2012 at 10:55 pm

    “Pity Guthrie had to leave.
    But he ain’t getting any younger…

    Good player, sadly little more than back up here, so had to go.”

    FFS Clint, he’s 25 man!

    Are you suggesting that we can get by without backup for the Premiership, Europe and the two domestic club competitions next season?

  32. Why did i know that was coming?
    :)

    25 & an understudy, at best?
    He NEEDS regular first team football, he’s in his prime, don’t you think?
    I don’t think he’s as bad as you seem to mate.
    He didn’t/wouldn’t sign on for more of that last year, so HE obviously felt he ‘had to go’.

    Where do i even remotely suggest even that we don’t need back up players?
    That’s an odd extrapolation!
    He obviously doesn’t see himself as that, fair play to the lad.

  33. Although i did read a piece that stated that he was, in fact, getting younger like benji button/brad pitt.

    :)

  34. CLiNT FLiCK says:
    June 29, 2012 at 11:10 pm

    “I don’t think he’s as bad as you seem to mate.”

    Where did I say he was a bad player, Clint?

  35. Anyhoo,

    so do ya think ‘some of the more established prem clubs have missed a trick’ then, or what, already?
    ;)

  36. The ‘fail’ is reporting that Forster has now ‘agreed personal terms’ with celtic.

  37. Worky mate: I understand everything you have written and it makes sense, but does it matter? Do you think that we will have a better team this season than last? Maybe we will finish lower in the league but I bet we are good to watch in quite a few games.

    You don’t often get everything that you want in life. Might it not be better to accept what we have on the park and forget the politics off it?

  38. GS says:
    June 30, 2012 at 5:20 pm

    “Worky mate: I understand everything you have written and it makes sense, but does it matter?”

    Yes, of course it matters, GS. So many people only see things in the here and now. They forget where things have come from, and have no clue where they are going until it’s too late.

  39. I might be immune as NUFC have not won anything in the 40 years I have been watching.

    If we get De Jong and Debuchy are we going to be the Premier League team with the least number of British players in the starting 11? I mean week in, week out, because last year we didn’t have that many either. Maybe only Stephen Taylor?

  40. GS says:
    June 30, 2012 at 6:59 pm

    “because last year we didn’t have that many either. Maybe only Stephen Taylor?”

    GS, with the exceprion of Tim Krul, Danny Simpson was the defender who spent the longest time on the pitch last season, and was the automatic first choice at right back.

  41. Worky: I wrote it wrong. I thought one thing and it came out a different way.

    I meant probably only Taylor this year as they look to be trying to replace Simpson with Debuchy and/or others.

  42. GS says:
    June 30, 2012 at 9:25 pm

    “I meant probably only Taylor this year as they look to be trying to replace Simpson with Debuchy and/or others.”

    GS, or it is Simpson who is threatening to replace Newcastle United because they won’t give him the terms he could get at another club.

  43. Has Owl heed got the cheque book out yet?
    Think we will be a force to be reckoned with next season if we get the 65 players we have been linked with :lol:

    Debuchy,De Jong,Hoilett,Douglas….yes please.
    Smelling some silverware and it smells so good!

  44. Alreet Worky?
    Been avoiding the blog and news now because the transfer speculation kills me!

  45. sirjasontoon says:
    July 1, 2012 at 10:19 am

    “Alreet Worky?
    Been avoiding the blog and news now because the transfer speculation kills me!”

    SJT, this is the the Daily Diana’s story on Douglas and De Jong in it’s entirety:

    “NEWCASTLE have agreed a £5m fee with FC Twente for Brazilian defender Douglas.

    But Twente are holding out for £15m from the Magpies for striker Luuk De Jong.”

    I just can’t beleive that other blogs have written some epic stories based on that, even if it turns out to be true. It’s just laughable.

    I’ve been watching Dutch football recently when I can get it and that Douglas is a bit of a nutter who’s often getting sent off, suspended etc. He makes Joey Barton look like Stanley Matthews!

  46. We should at least be confirming Curtis Good, the Melbourne based defender, for 400K.

    Then if we did get a new CB (Douglas £5m), RB (Debuchy £6m), and young/less proven striker £1m+ …plus keep Demba Ba, and also someone to fill in as Midfield squad player to replace Gutherie (maybe that Anita chap, £6m)…

    I’d be very happy with all of that.

  47. Could do with at least a couple in before the start of pre-season training. Need to avoid any overseas players being cup-tied too.

  48. Just heard Besty deal is done n dusted with Blackburn.think we should ov held on to him atleast till jan transfer window just so we could see how this campaign was ganna pan out..wish Besty all luck n hope he does well for new club apart from when he plays against the might ov NUFC

  49. Yo Clinton !
    Nah, i really like both the feel and looks of books, which have the added availability of referencing instantaniously, beside i just purchased an I-Pad which allows me to avail myself of the added luxury of acquiring books.
    So no Kindle’s on my horizon, doing a bit of fishing this side of the pond and having my mini computer cleaned out, therfore using the local library computers.

    Dont have to repeat my evaluation of Hoilett, think every regular on the blog is aware of my tude on signing him, could still happen?

    As for the negotiations with the Dutch side in regard to both De Jong and Douglas, just brinkmanship, we will sign both, depends on who blinks first.
    Actually more concerned about signing Debuchy, which would give us the French international right side.
    My concern is we end up like last year, scrambling to make signings at the last moment.

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