Pound stretchers

wsc299 Mike Ashley is reviled by many fans, but according to Mark Brophy, his tough financial policies are making Newcastle self-sufficient

As Newcastle United faced relegation in 2009, they were heavily in debt with one of the highest-paid squads in the Premier League and an owner who was trying to cut his losses by selling the club. Many expected a tumble down the divisions and an imminent financial collapse. Just over two years later, following promotion, consolidation, a summer of turmoil and the unlikeliest of good starts, Newcastle sit near the top of the league, like an urchin crashing a society party. Perhaps more importantly, the finances of the club are under control.

For fans starved of communication from the top, the recent announcement of a mission statement was more surprising than its contents. The plan referred to the club’s aim of achieving financial self-sufficiency. It has been obvious for some time that Mike Ashley’s appetite for bankrolling Newcatle’s deficit has been on the wane, even as he has covered operating losses from his own pocket, not least during the Championship promotion season as the consequent loss of revenue played havoc with the bottom line.

The policy’s attraction to the owner is clear. Ashley has spent the past two years implacably chopping anyone from the roster whose wages outstripped their usefulness. It hasn’t always made him popular, but it was populists in the boardroom who created much of the problem in the first place. Despite his own culpability in causing the relegation that almost broke the club, Ashley deserves credit for sticking to his strategy. Remarkably, Newcastle claim they are set to achieve the desired self-sufficiency this season.

The footballing staff have pulled off the most difficult trick of halting on-pitch decline and then progressing within a financial framework where every penny matters. The health of the balance sheet may not have been so celebrated had the team been losing more often. There is a sense of pride that the club is not only competing with the richest and most powerful, but they are doing so under their own steam. What success is achieved is now funded wholly by fans’ contributions as customers. Despite being told for years that league placings depend purely on a club’s budget, Newcastle have shown – even if only for a portion of the season – that it is possible to overachieve.

The received wisdom has always been that fan-owned clubs are unfeasible at the top level in England. Fans just couldn’t provide enough money to run a club on a day-to-day basis or fund the transfers necessary to stay competitive – though Swansea City might disagree. If Ashley can now manage a club without contributing to its running costs, there is no reason why a fan-owned trust could not do the same. The only sticking point becomes the purchase price.

However, the good feeling brought about by performing well without having to sell the club’s soul didn’t last long. When the club’s historic home was renamed after the owner’s company, fans were disabused of the notion that avoiding the open chequebook of oligarchs and oil-royalty lent a certain moral superiority. The necessity to increase spending just to stand still cannot be denied for ever. Last season’s player sales will surely continue, the overall strategy being dependent on buying low and selling high. Cheick Tioté looks most likely to be this season’s January jackpot. There are, of course, only so many times you can sell your best player and replace with a cheaper alternative before you get it wrong.

With the £45 million maximum loss allowed in any three-year period by UEFA’s Financial Fair Play rules looking positively miserly next to some clubs’ balance sheets, Newcastle’s model might be one to copy. Reducing spending while improving performances on the pitch is desirable to any club. Unfortunately, the devil’s in the detail. Without identifying better, cheaper players than those under contract you will fail – another reason not to delegate scouting to international super-agents if one were needed.

Newcastle’s relative success in the early part of this season has been a triumph for a dying concept, of spending within your means and achieving on-pitch success through the efforts of football men – using coaches, scouts and players rather than exercising the financial might of whoever is using the club as a plaything this week. It is easy to admire but difficult to replicate. Whether any other clubs will be brave enough to try it and whether Newcastle themselves can maintain their position only time will tell. If the experiment has proven anything it is that financial doping and top-flight football need not be bedfellows.

From WSC 299 January 2012