Newcastle United: The European empire waiting to happen

Date published: Tuesday 3rd October 2017 9:05

Newcastle United could be one of the biggest, most successful clubs in world football. It really could. It has often been a regular in the yearly ‘Most Valuable Clubs’ top 20, this despite not winning anything outside of the Championship over the last six decades. It is usually the least successful club in said list.

But the good times will only ever arrive if it is owned and run in a proper, well-thought out, well-planned manner, and not as though it is a social club outing on which everyone has started drinking at 8am, has removed their shirts by noon and been put in jail by the evening for fighting with a horse.

While all places like to think they’re in some way unique, Newcastle genuinely is a city like no other. It has an indefatigable self-identity. Its people have an iron-strong, unshakeable sense of themselves. Incidentally, the same can be said for Teesside too. We’re all proud of our industrial heritage, of our propensity for bonhomie and are used to being out-of-the-way, unfashionable and ignored by the south (which is basically almost everyone else).

If you have never lived in Newcastle, the football club both literally and culturally dominates the city.  Even if you don’t follow football, the club is still an unavoidable part of your life, if only because you know when they’ve scored if you’re shopping in the town. So few places have a football ground actually in the city centre. None in England have one that is so big.

Newcastle is a long way from most of England and is often said to have much more affinity to Scotland, its identity forged on and built by Celtic romance and viking passion.

The idea of a football club being a sleeping giant is almost a cliche now, but it is the best way to express what the potential is at Newcastle United, even if it hasn’t so much been asleep, as in a coma while the incubus Ashley and his incompetent cohorts have squatted on the club.

Reports this week suggest that Mike Ashley is now willing to sell the Magpies for less than £400million and interest from a Chinese consortium is firming up. The presence of Amanda Staveley (surely the name of a woman who has a West Yorkshire-based chip shop empire) in the crowd against Liverpool on Sunday was telling. I wouldn’t claim to be a business expert, but Newcastle United is obviously a hugely profitable, successful club just waiting to happen. The only reason it isn’t is because Ashley and his minions have been so terrible at running the place.

The assumption has always been that Ashley is a great businessman because he’s rich, but such an assumption rather depends on what you consider to be success. Owning factories which exploits labour for a pittance would not conform to many people’s ideas of success. And obviously being very wealthy is only a success if you measure your value by what you can purchase. Many know that money is not the measure of a man.

He says he’s put £250m into Newcastle and won’t put in any more. Fair enough, but it was widely reported he’d not done due diligence when taking over Newcastle United only to later discover a lot more debt and thus having to put in £100m more. That doesn’t sound like someone who’s any good at business, does it? Sounds amateurish. It was to set the tone for a whole ten years of ineptitude.

The whole farce about renaming St James’ Park as the Sports Direct Arena was staggeringly but emblematically incompetent. You’d quite frankly have to be stupid to even consider doing that. Any fool could see the problem. But not Ashley and his mob of dullards.

Ashley’s widely discredited sportswear company was described by parliament’s business, innovation and skills select committee as using “appalling working practices” and that Ashley treated his “workers as commodities rather than as human beings”. The committee’s chairman, Iain Wright, said: “Whistleblowers, parts of the media and a trade union shone a light on work practices at Sports Direct, and what they revealed was extremely disturbing. The evidence we heard points to a business whose working practices are closer to that of a Victorian workhouse than that of a modern, reputable high street retailer.”

And yet Newcastle United is littered with adverts for this grubby business. Does Ashley think that makes the club more valuable or more attractive? Or could it be one of the reasons he’s not been able to sell it? The club is tainted by these accusations of modern-day slavery. And for a city with a proud union history of collectivist action to protect the working class from exploitation, it is especially galling. Again, Ashley is so hopeless that he’s actually undermining the value of his own asset and seems unable to even see it.

He should just walk away, accept his £250m loss and try and survive on his remaining billion. That would be the decent thing to do.

With one of world football’s best managers at the helm, you don’t need to be a business expert to realise that not investing in Newcastle United is a false economy in this era of huge financial rewards in the Premier League and Champions League. But he can’t or doesn’t want to see that.

If there’s any club in England that isn’t absolutely massive, but absolutely could be, it’s Newcastle United. In 2016 Forbes claimed it was the 20th most valuable club in world football on a revenue of $104m. In 2017 the TV deal income alone will surpass that. The fact that they can fill a big stadium despite usually not being very good is a testament to the persistence of their fanbase and is a stone cold guarantee of ticket and merchandise income. If Newcastle United became properly successful, the ground could easily be expanded to generate even more ticket income. It is a fortune waiting to be made.

Had the never-knowingly not downmarket Ashley not treated the place as toilet paper and had set about creating an elite club instead, he’d have had no trouble selling it at a huge profit or generating money. That hasn’t happened because he’s been incomprehensibly bad just from a basic business perspective. So don’t be surprised if he messes up this potential Chinese buy-out too. There’s nothing he can’t spoil, no hope he can’t crush.

More worryingly, he’s often conveyed the impression that actually he enjoys it when there is a lot of frustration and anger towards him, as though he is addicted to the hate.

It’s not hard to crunch the numbers, add up the income from TV, media, potential partnerships, advertising and 52,405 ticket sales and see that there is not just money to be made at Newcastle United, there is a veritable European empire to be built. Let’s just hope that the next owners know what they’re doing, because for ten years, the current ones haven’t had a clue.

 

John Nicholson


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