Some interesting figures published on Tuesday morning, regarding ‘financing’ provided to Premier League clubs by the owners.
This particular table comparing the various Premier League clubs, comes as part of a study on Manchester United and their current position regarding finances.
The table has been compiled by the excellent Swiss Ramble who specialises in the business of football.
He (Swiss Ramble) has looked at the net finance provided by the owners of Premier League clubs from 2010 to 2020.
As you can see, Mike Ashley preventing the complete up to date figures (up to the end of last season – 2019/20) available for all but two clubs, as Newcastle United and Crystal Palace haven’t published those 2019/20 accounts so far.
However, difficult to see that those outstanding accounts would have made any difference to the table above, as it is most unlikely Mike Ashley has put any money into Newcastle United last season.
The Swiss Ramble makes these comments on the table / stats above:
“It will be no surprise to see that owners at Manchester City and Chelsea have provided substantial financing, £1.1 bln and £570m respectively since 2010, but Manchester United’s £297m is also behind Aston Villa, Brighton, and Leicester.
“Also, (Manchester) United’s money is from share issues, so it’s not really from the Glazers.”
As the Swiss Rambles says in his notes on the table, owner financing is in effect owner loans plus share capital.
When it comes to share capital, for Man Utd and the Glazers, their £297m is for buying shares in a company / football club where shares are traded.
When it comes to share capital in almost all cases in the table of PL clubs above, is where the owner lends the club money and turns that debt into shares. In effect, just another way of putting more money into their own clubs.
For Mike Ashley, as you can see, in the table above Newcastle United are the only one of the Premier League clubs that haven’t had any net finance put in by their owner(s) since 2010.
The cases of Man City and Chelsea are obvious but Brighton’s owner Tony Bloom has provided a massive £325m to finance what has happened at the club, basically rebuilding it and in particular building a new stadium, as well as strengthening the squad and rest of the infrastructure.
Same at Leicester, where their owners have provided £312m to enable that club to massively grow, including an investment of around £100m in the very impressive new training ground and other facilities.
When Mike Ashley bought Newcastle United back in 2007, he ‘loaned’ the club money that is still owed to him to this day. However, in reality, the money Ashley ‘loaned’ was actually simply part of the purchase price. As well as the cash paid to Hall and Shepherd and the other shareholders for their shares, Mike Ashley had to pay off the outstanding mortgage of £50m+ that was still owed from the St James Park redevelopment of 2000. Also, money to level up the club finances regarding cash still owed to other clubs for buying players in instalments, as well as sponsor money that had been taken up front.
Only the very very very naive still believe the fairytale that Mike Ashley was somehow duped into buying the club, supposedly not aware that the ground development mortgage and other debts didn’t need to be covered as well, on top of the money paid to shareholders.
So when you look at that table above and see an entire decade of Mike Ashley the only owner not having put any net finance into his own club / business, it paints a really depressing picture. This is how he could and should have funded the state of the art training ground that was promised way back in 2013, the same with funding a properly financed and supported Academy to produce the talent of the future, as well as the potential expansion of St James Park. Not to mention supporting strengthening of the squad and showing ambition on the pitch.
The only loans have been to cover cash shortfall on the two occasions Mike Ashley has relegated Newcastle United, though both times that money has then been repaid from the later cashflow of the club, leading it to severely hamper strengthening of the squad, including Ashley taking his loan money back out, rather than supporting Rafa Benitez properly after promotion.
The idea of course for most owners of Premier League clubs, is that they wouldn’t take loan money back out of their club as it would seriously prevent the club growing / succeeding. Instead, if they intend to sell the club at some point in the future, then they would look to recoup their loan money as part of the sale price. A bit like the case of Newcastle United, if that £50m+ mortgage on SJP redevelopment hadn’t been outstanding, he would have simply had to pay £50m more on the sale price to shareholders.