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Without takeover United could well have folded


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Sep 25 2007 by John Gibson, Evening Chronicle

 

THE COMEDIAN at the black-tie dinner deep in Geordie territory glanced back towards the top table.

 

“So you’re the new Newcastle chairman,” he said. “Got a lot of money?” Quick as a flash Chris Mort, beaming widely, replied: “No, but I know someone who has.” Cue for wild laughter and thunderous applause. Bonding mission accomplished.

 

So it came to pass that when Mort arrived in the private box at St James’ Park for our interview he should immediately reveal that Mike Ashley has sunk another £45m of his personal money into United.

 

Yes, he certainly does know someone who has! Ironic that so far Ashley has spent a whopping £133m to buy the club, followed by an initial £30m injection to steady a rocking boat, and now a further £45m to pay off the hungrier debt collectors clamouring at the door.

 

That’s £208m it has cost Ashley in a matter of months, when he was originally portrayed by some in the City as a quick buck merchant who buys companies in need of maintenance, knocks them into some sort of shape in no time, then sells them off at a healthy profit.

 

In view of Mort’s £45m revelation, two obvious questions sprang to mind.

 

Were he and Ashley surprised not only at the size of United’s debt once they got inside the club, but also at how it was structured?

 

And are they in this for the long haul?

 

United’s new chairman ducked neither.

 

Indeed, Mort went on to admit the financial position was so dire that Newcastle could have folded “like a pack of cards,” a thought which will send shivers through the Toon Army who witnessed the mighty capitulation of another well-supported club, Leeds.

 

“Yes, we were surprised at precisely how bad the financial position was. We didn’t fully realise it from the outside,” admitted Mort.

 

“If the old board had not been successful in re-financing the club by the end of the financial year it would have folded like a pack of cards.

 

“They were in big trouble because, if you remember, Mike bought United in the May and the club’s financial year was up on June 30.

 

“No doubt this crisis looming on the horizon was one reason why they wanted to sell.

 

“We have addressed the situation, met it head on, which is why Mike initially put in £30m of his own money and has now committed a further £45m to pay off the big debts that had people clamouring at the door.

 

“What we also found was that the club had spent sponsorship money before it actually came in. For example, all the cash from Northern Rock, which should have been paid annually, has already gone (said to be used to help buy Michael Owen at £17m). Money was also borrowed against a deal with adidas.

 

“We prefer to invest as the cash comes in, not before it does.

 

“I’m not criticising the previous regime. Their heart was in the right place because they were doing what they could to bring success to the club, but we are approaching things in a different way.”

 

There’s no question that the rich boys’ club which is the Premier League has moved from a playground for millionaires to billionaires.

 

In view of Ashley’s willingness to repeatedly put his hand in a bottomless pocket, United must represent a long-term investment I suggest.

 

“Absolutely,” replied Chris. “I don’t think you could turn United into a quick profit even if that was your intention.

 

“To make money out of a football club of this stature you must have a long-term strategy. Several consortia ran a slide rule over Newcastle before us and didn’t go there because this is a big job.

 

“Mike developed Dunlop and Slazenger, two other companies he bought, over a period of 20 years. He does small investments like adidas which he then sells on, but that was not a whole business, it was a minority stake. This is an entire asset.”

 

While Freddy Shepherd, Douglas Hall, Allison Antonpuolos, Bruce Shepherd and Tim Revill were heading out of the exit, Mike Ashley, the 25th richest man in Britain with a personal wealth estimated at £1.9billion, was ushering his small band of merry men through the revolving door.

 

Mort, a top lawyer and partner of international law firm Freshfields Bruckhaus Deringer, has been joined by commercial director Steve Hayward and Justin Barnes, who works on the brand side of Ashley’s companies.

 

“Steve is on the board with me and Justin will be joining,” explained Mort. “However, they aren’t up here on a permanent basis. I’m the only one day-to- day. I can tap in to the others.

 

“We didn’t want to rush headlong into things, introducing five new people at the top and whatever. We wanted to look at the club and its personnel from top to bottom to see what we had and what we could improve.”

 

The relationship between chairman and owner is what intrigues United supporters most. How do the top two men, both just into their 40s but hugely successful, actually organise the running of the most precious commodity in the lives of thousands of Geordies?

 

“Mike has two roles to play – to sign the cheques and to be a supporter in the normal sense of the word,” smiled Chris. “And that’s the way he wants it, which is why you see him at our matches in a black-and-white striped shirt.

 

“He has a very busy life and he doesn’t want to run yet another company. That’s the way it was from day one.

 

“I guess in some ways Mike is like Roman Abramovich at Chelsea – although Abramovich appears to have much more involvement these days than Mike has up here.

 

“I’m in complete charge of the buying and selling of players along with Sam Allardyce. Their salaries and so forth. We get on with that.

 

“Of course I tap into Mike’s expertise on the business side of the company, on restructuring the debt and plotting the way forward, because it would be stupid not to.

 

“And I’m heavily into the PR around the area, bringing the community closer to the football club. I want a better all-round image for the club.

 

“Frankly, there aren’t enough hours in the day, but then I’m used to working long hours. That isn’t a problem.

 

“I advised Mike on his acquisition of Newcastle United PLC but we knew each other before all this started. We were friends through business and I was happy to take time off from Freshfields to become chairman here at St James’ Park.

 

“That arrangement is open-ended. It’s flexible and I’m thoroughly enjoying what I’m doing. The Geordies are wonderful people who have made me most welcome.

 

“This is a one-club city, unlike say Manchester and Liverpool, so everyone seems with us. I know how much they love their football club and I’m aware of the responsibility I carry. I know they want success – but then so do Mike and I.

 

“That’s why we’re here.”

 

THE Shepherd family were unavailable for comment this morning.

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“If the old board had not been successful in re-financing the club by the end of the financial year it would have folded like a pack of cards.

 

That's pretty much how I would describe Newcastle in the last few years, like a house of cards, any problem just add another l

layer to the top and hope the bottom holds.

 

They were building problems in a similar way to Leeds IMO. :(

 

 

 

Although it's not just FFS that was the cause of that, I'd say all the major shareholders and probably the whole management structure were playing their part (NUFC was certainly little more than a cash cow to the Halls for the last 10 years).

 

That's not to say I think the new owners are altruistic particularly, as if ran well Newcastle certainly could make them a tidy profit, but that's more than fair enough if the club is successful on field and off field.

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Without Big Sam United could well have folded. I dread to think what another season of Roeder would have done to us. We'd probably be without the Zog, and still have much of the shite Sam carted off. We'd have probably spent 13 mill on Crouch, and brought in Anton Ferdinand for 6 leaving us nothing left but a few kids to pitch in at full-back =/ The kind of stuff nightmares are made of. Our only hope would have been Shola's impressive goal record for Roeder haha

 

Reality thankfully is our most competitive squad since SBRs prime (but with more solidarity and team spirit) and debts that are slowly being taken care of by our other big man and Smithers...er I mean Mort.

Edited by bassplayerjj
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So all in, Ashley has pumped in £110m? to buy us, £30m then another £45m for debts, and £8m? for net transfers?

 

= £192m :(

 

Yes, he certainly does know someone who has! Ironic that so far Ashley has spent a whopping £133m to buy the club, followed by an initial £30m injection to steady a rocking boat, and now a further £45m to pay off the hungrier debt collectors clamouring at the door.

 

That’s £208m it has cost Ashley in a matter of months, when he was originally portrayed by some in the City as a quick buck merchant who buys companies in need of maintenance, knocks them into some sort of shape in no time, then sells them off at a healthy profit.

 

:P

 

Someone explain how exactly Ashley plans to make money here? Does he think we can make the money Arsenal are making in the next few years?

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Using all the sponsorship money in one go was ludicrous and shows how desperate Shepherd had become....

 

It's strange because the one plus-point I used to award Shepherd was that he was an astute businessman who made sure the club finances were in order. Now even that seems like it wasn't the case!!

 

I don't doubt that he had good intentions, but the bottom line is that he was simply another Ridsdale - spend money that's not there and when nothing comes to fruition, spend even more....

 

Thank god he's gone.

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Using all the sponsorship money in one go was ludicrous and shows how desperate Shepherd had become....

 

It's strange because the one plus-point I used to award Shepherd was that he was an astute businessman who made sure the club finances were in order. Now even that seems like it wasn't the case!!

 

I don't doubt that he had good intentions, but the bottom line is that he was simply another Ridsdale - spend money that's not there and when nothing comes to fruition, spend even more....

 

Thank god he's gone.

 

Aye I think Shepherd is/was good at making money, but I don't think those practices translated so well into running a football club. Although as I said I think a fair share of the blame has to be given to the other major shareholders as well (and a more than fair share to Feckless).

 

In a way he and we may have been lucky to get away with it, as Newcastle had the financial income to paper over the cracks, a little bit less financial muscle and we might have been doing a Leeds several years ago.

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Ridsdale was worse in my opinion, at least Fred can blame the insatiable demands of the geordie fans, Leeds was more of a personal ego mission for Ridsdale. You have to ask why he went to Cardiff, what's driving him?

 

They were both spending money that they didn't have. I know you have to speculate to accumulate in this life, but putting yourself in a situation where creditors are knocking on the door to claim around £45m is not good.

 

The only difference between the two situations in my mind is that we had someone interesting in buying the club and Leeds didn't.

 

Be interesting to know what Shepherd's contingency plan would have been if Northern Rock had pulled out of their deal...

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Ridsdale was worse in my opinion, at least Fred can blame the insatiable demands of the geordie fans, Leeds was more of a personal ego mission for Ridsdale. You have to ask why he went to Cardiff, what's driving him?

 

They were both spending money that they didn't have. I know you have to speculate to accumulate in this life, but putting yourself in a situation where creditors are knocking on the door to claim around £45m is not good.

 

The only difference between the two situations in my mind is that we had someone interesting in buying the club and Leeds didn't.

 

Be interesting to know what Shepherd's contingency plan would have been if Northern Rock had pulled out of their deal...

 

 

Knock the brothel on the head for a couple of months

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Ridsdale was worse in my opinion, at least Fred can blame the insatiable demands of the geordie fans, Leeds was more of a personal ego mission for Ridsdale. You have to ask why he went to Cardiff, what's driving him?

 

They were both spending money that they didn't have. I know you have to speculate to accumulate in this life, but putting yourself in a situation where creditors are knocking on the door to claim around £45m is not good.

 

The only difference between the two situations in my mind is that we had someone interesting in buying the club and Leeds didn't.

 

Be interesting to know what Shepherd's contingency plan would have been if Northern Rock had pulled out of their deal...

That and the fact that at the end of it all, the sellable assets, being their best players, weren't actually owned by Leeds and in turn Leeds couldn't even hope for the transfer fee to help with the coffers.

At least Freddy never actually took Newcastle down that slippery slope albeit he preferred the buy high sell low method the club still had the opportunity to reclaim some sort of fee.

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