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Mike Ashley Unravels his Business Plan at Newcastle United

Like something from Footballers Wives or Dream Team, Freddy Shepherd was one of football’s characters. Be it defaming the women of Newcastle or bringing Michael Owen to Tyneside, the former Newcastle United chairman has engrained himself into the history of the club rightly or wrongly. You could argue Mike Ashley is forging a similar path with his own questionable PR decisions. Downing a beer in the stands or sacking his much loved pinata of a manager Chris Hughton, he’s had a ‘colorful’ time owning the Magpies.

That is however where the similarity ends. Shepherd’s desire for bringing the flash and often overpaid stars to Newcastle is not something his successor shares. Instead Ashley represents the antithesis of this by appearing to pinch the pennies rather than spend them.

The much publicized £35m ‘war chest’ Newcastle have is already being spent. Yet if you analyze the money spent, you may question how. Consider the £3m for Kevin Nolan offset by a reported £4.3m for Yohan Cabaye and three free transfers: Demba Ba, Sylvian Marveaux and Mehdi Abeid should in theory see a budget remaining of £33.7m.

Like many who play Football Manager (self included), we negate to mention wages, agent fees and signing-on fees (all of which Mike Ashley and Derek Llambias include in the ‘transfer fund’). In essence the budget covers all the costs of transfers. Meaning, in reality, Newcastle may only officially spend at most £15m on fees.

Even their first signing Yohan Cabaye was only approached due to a contract clause activated in his final year allowing him to depart French champions Lille for a paltry fee. You’d be ingenuous to think that this kind of loophole maneuvering was done overnight.

Newcastle are gaining somewhat of a reputation for premeditated scouting and target ascertainment. Player’s situations are monitored closely and even their contracts are structured to make any potential loss to be as minute as possible. Demba Ba, for instance, is said to have a heavily incentivized contract that only benefits him if he is playing and scoring. This is a counter measure to questions over his fitness due to a knee injury sustained while playing in Belgium.

Even their most expensive target thus far, Charles N’Zogbia, is in his final 12 months of his Wigan contract. The more frugal approach can of course reap rewards. Teams like Everton have displayed, if moves are calculated and well planned, they can bear fruit. Of course to use another metaphor they also leave you putting all your eggs into a solitary basket. David Moyes’ most notable sales during his tenure were that of Wayne Rooney and Joleon Lescott totaling over £50m in fees. However little has been given back to reinvest. With the exception of Russian Diniya Bilyaletdinov, Moyes is more often than not purchasing inexpensive youngsters such as Magaye Gueye from Strasbourg — something Newcastle themselves seem keen to attempt with the acquisition of another Frenchman, Mehdi Abeid. The youngster who chose to leave RC Lens comes with a healthy pedigree of youth international football and highlights the club’s constant monitoring of contractual situations.

There is a feeling somewhat of a changing of the guard at Newcastle. Joey Barton’s much publicized situation seems a clear signal that Ashley is looking to remove those high wage earners to move in line with an overall lower wage structure. Rumors that Alan Pardew’s contract is incentivized to reduce running costs haven’t helped matters.

Forgotten man Alan Smith is also being hawked round to any team that may wish to welcome him with Leeds the strongest suggestion. His sixty grand a week wages are putting most potential suitors off including Leeds, meaning Newcastle will most likely have to cover the majority of his wages until his contract expires next summer.

Smith typifies the dead wood Ashley is now attempting to remove. He’s learned quickly that signings such as Smith are not the way to sustainability as Smith’s re-sale value post-Manchester United was never likely to rise following his broken leg. His lack of ability at either striker or midfield positions didn’t help either.

A frequenter of Casino’s Ashley is without question taking a gamble enforcing such a quick period of transition. The players that have arrived — excluding Demba Ba — are without any prior Premier League experience but of course that in itself may explain why Ashley has chosen to raid Ligue Un. Sharing similar attributes to that of England, its fast physical game means many players in Ligue Un find the transition smoother than the slower pace of say Serie A or La Liga.

With self sufficiency the new buzzword at Newcastle, it has left fans questioning when their stars will be sold. Cheik Tiote, Jose Enrique and even Fabricio Coloccini have been linked with moves away from the club in the last six months. Every player now has a price and while for fans at least under Shepherd’s often wayward ship, the team’s stars were somewhat guarded from rival bids.

Suggestions of a conveyer belt-esque talent line seem somewhat wide of the mark, but either way it does remain clear that there are sections of the support that will breathe a sigh of relief when Ashley does end his tenure in the North East.

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1 Comment

1 Comment

  1. James

    July 18, 2011 at 4:40 pm

    A good read, agree with the points wholeheartedly. I think its a change of direction NUFC needed though, with the Toon Galaticos of the past putting the club in the precarious financial position they were at the back of the Shepherd era.

    Will be cheeky and link my similar article

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