Accountability?

Seeing as the Toon won't be troubling any statisticians on the pitch this weekend, I've been giving the latest NUFC accounts some thought. Some of the 'highlights' include

Total wage bill: £62.3 m - up from £52.1m in 2007
Monies owed to Allardyce: £4.6m
Amount Ashley paid for club: £134.4m
Extra cash Ashley has poured into club: £110m
Total loss for year ending June 2008: £20m

One of the most concerning things for Ashley must be the size of the wage bill. The turnover is about £100m and the wage bill is at about 65% of that. Apparently the accepted safe limit in terms of percentage is around 50%. Therefore, the natural assumption is (as George Caulkin in the Times Online says)

"This may explain why the club have been eager to cut the salaries of senior professionals such as Michael Owen, Nicky Butt and Steve Harper, all of whom are out of contract this summer, provoking disaffection in the dressing-room. "

I had to read the sentence several times, to understand what Caulkin is saying - not that EMO, Butt and Harper are causing the unrest but that the unrest is caused because of the need to cut salaries. I guess this makes sense in the face of declining revenue - when was the last time SJP sold out? There are still tickets on sale for the mackem game, which has to be a first. Financially there is a conundrum, is it more important to shift EMO off the wage bill or hope his goals keep the Toon in the Premiership? It's a tough call, but ultimately it boils down to either a long or short term strategy. I'd guess it will be the latter as Ashley isn't showing signs of moving on, but its going to require a large amount of holding of nerve, which we haven't seen thus far from the current management team. Also these figures sound a large claxon-like Family Fortunes electronic farting noise to the prospect of any new signings in the January transfer window.

As for the pay-off for Allardyce, yes, its obscene amount of money for the seven months of purgatory that he inflicted on the club, but the pay off will (I'd assume) been dictated by the contract that was negotiated prior to the Ashley regime. What will be interesting to see is how much the Keegan pay off will be? No doubt we'll have to wait another 12 months before we can find out, but it will be interesting to see if its a similar amount. I wonder which enhancements could have been made to the playing staff for that amount of money? Allardyce's pay-off alone would have bought either Bullard or Heskey... Now there's a thought.

Don't get me wrong, I'm not suggesting that Allardyce should have stayed, nor even that I feel any sympathy for the current incumbent of the SJP boardroom. I just feel that its been so much waste and instability that shows no signs of stopping. Stability is what this club is crying out for, on the pitch, in the dug-out and finally in the directors box. But that's not how the roller-coaster ride plays out, is it?

Anyway, hopefully the players will have been making good use of the free time this weekend, especially Barton/Enrique and Carroll/N'Zogbia. It would be great to see a team performing at Man City on Wednesday - but, seeing as I'm going and the scars of the Blackburn game haven't faded from my memory as yet; I'd be surprised.

Money Talks

As I've mentioned before, I travel a lot with my work. I love The frustration that comes with flitting around the UK is the inevitable delays. However, in the "every cloud and sliver lining" category it means I listen to a lot of either radio or podcasts. Nothing quite helps relieve the tedium of the M6 than a radio show that either a) makes me laugh or b) gets me so involved that I end up, ahem, 'discussing the content with the presenter [translation - I shout at the radio in a manic way alarming anyone else stuck in the traffic jam that can see me]

This week I found myself so engrossed in a discussion on Radio5Live that I arrived home and ended up spending 15 minutes parked outside my house, in the car listening to the end of a panel discussion. Despite enhancing my reputation with my neighbours' as the street eccentric, I was intrigued by a programme "Finance in Football". This was an state-of-the-nation look at the Premiership business models and what was expected to happen as the recession bites. The panel consisted of Robert Preston (BBC correspondent who is bringing a new meaning to 'ubiquitous'), John Madejski (Chairman of Reading) and Keith Harris (an investment banker).

The reason that it was so interesting was that Harris isn't just a grey-suited money man; he's had a long involvement in football. From what I can gather he was instrumental in the early days of seeing ways of making vast sums of money from football as he was involved in the ITV Digital TV contracts that started the split of money between the Premiership and the rest of the football league, right the way through to him brokering the deal for Man City to be sold to Shinawatra. There were several really interesting things discussed; Liverpool being the most 'at risk' club from a financial background because of the way that their debt was structured, West Ham being quite likely to go under by the end of the season as well as Harris' involvement in selling clubs.

However, the bit that had me stuck in the drivers seat was Harris' assessment of saleable clubs at the moment. He has been tasked with selling West Ham, Everton and Newcastle. He thinks that Newcastle is one of the best placed to be sold - large loyal fanbase, one-club city, huge stadium and large robust merchandising sales. Needless to say he was then pushed to say why Ashley hadn't managed to shift the club when it had been touted around the super-rich as the next new shiny toy. Harris' explanation was that the club had come very close to being sold to an American investor, but this deal had collapsed due to the investor loosing 'millions' to Madoff's Ponzi scheme

It was just as well I'd parked by this time... because you really couldn't make it up. Newcastle United - after suffering decades of mis-management off the pitch are bought by Mike Ashley, a multi-millionaire who has so little understanding of the business that he neglects to do the due diligence to uncover that transfer fees are paid in installments, and then the club is almost sold to someone who has been conned out of millions. If it wasn't the club I supported then I'd be laughing.... as it is I'm just increasingly bewildered. The worst of it was that Harris thought this was perfectly reasonable.

I have a feeling that Ashley is now in it for the long haul - he'll need to protect his investment (keep the club in the Premiership) whilst imposing tight financial controls (no new players of note, 17th place will do). The only consolation is that at least Newcastle aren't in as much of a mess off the pitch as West Ham. Today's game will be a good clue as to which club is in a worse state on the pitch... Apparently they've got some bloke called Dyer playing for them.

Finally, welcome to the newest member of the Toonarmy - Erin Baird, born last weekend to a couple of fellow Toon sufferers . Erin, I intend to take my duties as your "Fairy Toon-mother" very seriously indeed and look forward to indoctrinating you, as I have done with the Favourite Nephew. Remember the old adage "nothing in red and white is any good - whatsoever"

BTW - it wasn't the same Keith Harris as the one in the picture... In case you wondered....