Magpies In Financial Turmoil

Newcastle United’s accounts have revealed that billionaire owner Mike Ashley had to plough £75m into the club to keep it afloat when he took over. Massive sums were spent on failing to get casino plans off the ground (£5m) and sacking manager Glenn Roeder (£1.1m – now managing Norwich City), and no less than £1.1m was paid to director Douglas Hall as a golden handshake on his departure from the club. The full picture for the last year of the Shepherd and Hall families’ reign at the club shows large debts, a worryingly large wage bill and poor footballing performance sending gate receipts down and hurting the club’s bottom line. The accounts show that former chairman Freddie Shepherd was being paid £500,000 a year, along with private health benefits. In total, Douglas Hall was paid £1.62m by the club, which included his compensation, his £448,654 salary and a private healthcare allowance.

The accounts show that despite the club’s earnings from gate receipts and merchandising rising on the previous year, it made a loss of £32.9m, more than £20m greater than in 2006. The club’s wage bill was £62.5m, up more than £10m from 2006. This meant that 72 per cent of the money generated by the club is paid out in wages, well above the 50 per cent figure recommended by accountants Deloitte. The figures would have been even worse had the FA not paid £6.7m in compensation to the club after Michael Owen was injured. The accounts also state that MGM Mirage paid the club £5m for its stake in land next to St.James’s Park, but the cash had to be paid back in January 2008 if UK gaming laws had not been deregulated.