What was Newcastle United’s £498,000 payment to Sports Direct for?
Posted on November 21st, 2013 | 47 Comments |
Firstly, I should declare that this piece was originally inspired by another, one of several on Newcastle United’s finances by a brace of accountants who also happen to be Toon fans in the latest issue of fanzine, ‘True Faith.’ It’s a very good read.
Of course, it has been known for quite some time that Sports Direct don’t pay a brass farthing for all the extensive worldwide publicity they get from Newcastle United. This was something which was finally confirmed by the club’s financial director, John Irving, at the first ‘Fans’ Forum’ meeting between representatives of the fans, the club, and sponsors, Wronga.
However it certainly less well known that although Newcastle United have been paid the square root of b*ggerall for all those vulgar signs, they actually had to PAY Sports Direct half a million pounds in 2012-13 as shown in SD’s 2013 Annual Report (page 90 under “Related Party Transactions”). Here you will see that Sports Direct received a payment of £498,000 from “Connected Persons,” Newcastle United Football Club.
Why? I’m sorry but the truth is I just do not know for certain. One thing I do know however, something which you might have noticed too (especially if you have used Newcastle United’s online shop recently) is that this is now also run by Sports Direct, with all enquiries now being directed to the Sports Direct death star in Shirebrook, Derbyshire.
Listed as “sales,” it could be a fee for designing and running the site (which would be a damn cheek). It could be for some of the awful market stall tat introduced to the Club’s shop by Ashley, or it could be for something else entirely. It is perhaps worth noting at this point that the new ‘nufcdirect.com’ site was only launched in March 2013, and the financial report mentioned above was only for the year up to 28th April 2013.
This brings me to a small but in my own humble opinion, VERY significant detail which I noticed on my journey. This is that the Internet domain ‘nufcdirect.com’ was first registered way back on November 1, 2010 BY SPORTS DIRECT.
I say “significant” and use capitals as I am a web designer amongst other things for my sins. One of the first pieces of advice I have always given to clients (who usually have much smaller businesses than Sports Direct or Newcastle United) is to register their domain in their own name with a separate domain registration company rather than just leaving it with their webhost or some other third party. This is because the host could potentially hold a significant business asset to ransom at a later date if the client wants to move elsewhere among other things.
For a large, established business with an international reach like Newcastle United, it is far worse still to let Sports Direct register the domain for their official online shop in the name of Sports Direct. Even if it was right and it made good business sense for Newcastle United to allow Sports Direct to run their online merchandising (and I have sincere doubts about that one too), they should never have allowed them to register and own the domain for the new site. It is VERY WRONG INDEED, and a sign of where the balance of power between Sports Direct and Newcastle United football club truly lies, with Newcastle United as a vassal, a slave who is bonded to their master.
Why this happened, as well as what that £498,000 was for are both questions which need to be answered by the club. After all, fans shelling out their hard earned for the club’s merchandise have a right to know whether it will be supporting the club or Sports Direct. They should also have the right to know when they are being deceived, which as we all know is Mike Ashley’s forte.