How Newcastle Became Talk Of The Toon

[Christmas Tree 4692]

Here's how Newcastle became the Talk of the Toon (again) thanks to Ashley's rethink

 

 

High up in the stands at the Sports Direct Arena a group of Newcastle United executives are in an air-conditioned office, thumbing through some financials. Liverpool catch the eye.

 

Kenny Dalglish's team, beaten 2-0 by Newcastle last weekend, will be fitted out in Warrior sportswear next season in a deal worth £25million a year. Add the £17m paid annually by shirt sponsor Standard Chartered and Liverpool's kitty is swelled by £42m before a ball is even kicked.

 

Towards the bottom of the list are Newcastle United, paid a combined £5m a year by kit supplier Puma and Virgin Money, who are splashed across the front of the iconic black and white jersey.

 

 

Over at Darsley Park, Newcastle's magnificent first-team training complex, Alan Pardew has a different set of figures in front of him. After 31 games in the Barclays Premier League, his Newcastle team are sixth in the table, 11 points clear of Liverpool.

 

This is the inside story on the complete restructuring of a famous football club, cutting it to the bone and finally settling on a sound business plan. It is the rebirth of Newcastle United.

 

 

When Mike Ashley bought the club in 2007 for £130m and granted an interest-free loan of £100m in 2008 rising to £140m at present, he was immediately caught up in football's brainless bubble. There were 'PAs for PAs', an annual wage bill that reached 91 per cent of turnover and a flawed recruitment policy.

 

He has made plenty of mistakes, most of which he has publicly or privately accepted, since he bought out Sir John Hall and Freddy Shepherd. Those errors include a string of chaotic managerial and executive decisions - Kevin Keegan and Dennis Wise, Joe Kinnear and Alan Shearer among them - based on advice from 'football people'. After Newcastle were relegated from the Premier League in May 2009, the billionaire businessman resolved to do it his way.

 

When Ashley arrived in the North East, annual interest payments and bank charges were a staggering £6.5m. That figure has been reduced to £212,000. The club save £200,000 a year using an in-house cleaning team at the stadium and the training centre, but make more money outsourcing the catering in the hospitality suites.

 

 

Recently they won an award for reducing carbon emissions, saving £400,000 a year in power supplies. If an employee does not turn off a light or leaves his computer on after work, an alarm sounds in the facility manager's office so that they know who is responsible.

 

This is Ashley's business model, unashamedly brought in from the nerve centre of retail giant Sports Direct. He hates waste. When Ashley is not satisfied, he isn't afraid to pick up the phone or fire off an email demanding improvements. Now Newcastle continually review, rehabilitate and then reset.

Ashley works on an 80:20 principle, placing his trust in managing director Derek Llambias to oversee the administration and operation of the club (20 per cent), plus the football (80 per cent). Their popularity ebbs and flows, confusing outsiders because it rarely tallies with anything that is happening on the field.

 

When Andy Carroll was sold to Liverpool for £35m in January 2011, supporters outside Shearer's, the bar at the stadium named after their record goalscorer, blamed Ashley. A little over a year later the Gallowgate taunted Carroll with chants of 'One greedy b*****d' when the Liverpool striker ripped off his shirt when he was substituted 10 minutes from time.

 

 

On February 5, 2011, when the team were 4-0 down at home to Arsenal inside 26 minutes, one supporter ran down the steps of the Milburn Stand, directed a thumb towards the south and told Pardew: 'Get back to London, you Cockney b*****d.' After Cheick Tiote scored Newcastle's 87th-minute equaliser, grown men were in tears in the boardroom at St James' Park (yes, Ashley and Llambias still call it that).

 

The owner is attending matches again, dining out with Llambias and his family in Newcastle the night before last weekend's impressive 2-0 win over Liverpool. They still encounter pockets of hostility, but accept the Geordie Nation's passion for the team playing at the sporting cathedral on top of Town Moor.

 

The current beef is the stadium naming rights, a decision that prompted some supporters to stage a mock funeral by marching to St James' Park with a black and white coffin. Ashley answers them all, telling them that with a stadium already operating at 91 per cent of capacity, he is forced to look at alternative revenue streams. Turnover at Newcastle last season was £88.46m, a million miles behind Manchester United (£286.3m), Arsenal (£222.6m), Manchester City (£153.2m) and Tottenham (£163.4m).

 

Newcastle's recruitment policy is crucial, but Ashley accepts that it will never be truly scientific - there is always a margin for human error.

 

Ashley has restructured the talent and development team, placing Newcastle's players on a grid that monitors current performance, valuation and future potential. It is a system that has produced spectacular results, with 'the 1s' a reference to first-team players and '2s' those pushing for a place in the team.

 

Many of them were identified by chief scout Graham Carr, working to a narrow and specific brief that was provided from the very top. Yohan Cabaye, Papiss Demba Cisse and Tiote were not on the radar of Newcastle's supporters until they set foot inside St James' Park.

 

Positions are identified by Pardew up to a year in advance and then Carr, along with his tiny team of talented scouts, set off on predetermined missions. Only players of a certain age, value and salary expectation make it through the sieve for consideration. The rest are discarded, no matter how good their agent promises they will be.

 

At any one time Carr, Pardew and Llambias have access to a confidential file that itemises the first-choice replacement for any first-team player or a potential second choice. Ashley does not believe that it is a ground-breaking system, but it works based on the financial restrictions in place at Newcastle.

 

 

Until recently, Ashley bought into the myth that Newcastle had to pay a premium to convince players to move to the North East. It drove prices higher and forced him to authorise bigger wages. After nearly five years in charge he will no longer succumb to temptation, trimming the wage bill to 60-65 per cent of turnover and fantasising about the unlikely day when it will be as low as 50.

 

With the exception of the team bonuses agreed with the squad at the start of the season, Llambias rarely commits to incentives in individual players' contracts. The strikeforce do not have a bonus for scoring or assisting in goals; and Newcastle's defence would not have been specially rewarded for their clean sheet against Liverpool, beyond their regular weekly salary. Occasionally, 'a 2' will be incentivised as part of his package to try to push his established rival out of the team.

 

Player negotiation is straight-forward, with a transfer valuation and a salary tag attached to each player on Newcastle's grid. When Carroll was attracting attention, Llambias enhanced the valuation of every player in the squad during the countdown to the close of the transfer window. By the time Liverpool came calling, it was too late for Newcastle to sign a replacement and the Merseysiders appeared desperate. Llambias set a fee based on the timing and, incredibly, Liverpool agreed to pay it.

Every player at Newcastle remains for sale, provided the price is right for Llambias and Ashley. They trust Carr and know that his team of nine scouts, some full-time and some part-time, are one step ahead and have already identified the replacement's replacement.

 

When the time comes for that to happen, they fully expect Pardew still to be in charge of the team to oversee the transition. He was brought in on a five-year contract, the man for the job after Llambias noted his work at West Ham.

 

 

Llambias's three children are Hammers fans and he frequently took them to Upton Park during Pardew's largely successful spell in charge. Pardew knitted West Ham together, sealing promotion in the play-off final against Preston in 2005 and taking them to within a whisker of winning the FA Cup against Liverpool the next year. Llambias made a mental note, recognising Pardew's qualities and working furtively behind the scenes in order to convince Ashley he was the right appointment.

 

Ashley has been impressed with his tactical acumen and his attention to detail since he replaced Chris Hughton in December 2010. His media profile and his conduct have met with Ashley's approval and the board are satisfied he has the complete respect of the players.

 

Pardew, along with his coaching staff, have the added security of long-term contracts, empowered by the board to make the best decisions for the team. They are done with the hire-and- fire approach that has seen Ashley terminate the contracts of Sam Allardyce, Keegan, Kinnear, Shearer and Hughton since January 16, 2008.

 

In that time, Chelsea, level on 53 points with Newcastle, have hired and fired four managers at a total cost of £46.3m. What a waste, as Ashley might say.

 

Neil Curtis

 

 

Read more: http://www.dailymail.co.uk/sport/football/article-2125810/Newcastle-Talk-Toon-thanks-Mike-Ashleys-rethink.html#ixzz1rCoA0C9E

[manc-mag 1]

Liverpool's kit & sponsorship deal alone....in a nutshell why it doesn't matter that we've got a stadium that's a few thousand bigger than the average Prem ground. All LM's guff about realising the potential size of the club etc etc. Yes we'll increase turnover to some extent with an increased (European) profile, but in this day and age it doesn't get you to anywhere near the turnover of an intrinsically bigger club (Man U), a bankrolled club (Chelsea/City) or a global gloryhunter club (Man U/Liverpool/Arsenal).

 

Theres many a valid argument to be had on issues surrounding the extent, degree and timing of our recruitment and retention activity, but anyone rejecting the basic principle of it has nothing to offer a sensible debate.

 

We aren't the natural (ie UK domestic) size of Man U ergo we don't have their money

We aren't bankrolled like Chelsea or City ergo we don't have their money

We aren't one of the three recurrent league title winners of the modern English game (European era) ie Man U/Liverpool/Arsenal, ergo we dont have their global glory hunter money

...and finally we can't borrow the money anymore (from financial institutions at least) ergo we can't bridge the gap on the never never.

 

Which is more, never had already arrived.

 

When that happens, all that is left is to try another way altogether. Anyone still saying otherwise has their head in the sand and an ice lolly stick up their arse.

[Davey Dave 0]

Yeah, but we've got £25 million in a neat little pile somewhere within St. James' that Ashley goes and stares at occasionally.

[Andrew 4718]

I'll give tiote and cabbage but even on here people were talking about cisse for a good while before we bought him.

[LeazesMag 0]

Yeah, but we've got £25 million in a neat little pile somewhere within St. James' that Ashley goes and stares at occasionally.

 

correct

[Gene_Clark 12]

it says neil curtis on the initial post, but neil ashton on the link; strange....

[Ayatollah Hermione 13794]

If you honestly think businesses recoup £35 million and put it in a big pile for certain acquisitions without incorporating it into certain set-ups and business plans, you're a bit simple.

[LeazesMag 0]

Here's how Newcastle became the Talk of the Toon (again) thanks to Ashley's rethink

 

 

High up in the stands at the Sports Direct Arena a group of Newcastle United executives are in an air-conditioned office, thumbing through some financials. Liverpool catch the eye.

 

Kenny Dalglish's team, beaten 2-0 by Newcastle last weekend, will be fitted out in Warrior sportswear next season in a deal worth £25million a year. Add the £17m paid annually by shirt sponsor Standard Chartered and Liverpool's kitty is swelled by £42m before a ball is even kicked.

 

Towards the bottom of the list are Newcastle United, paid a combined £5m a year by kit supplier Puma and Virgin Money, who are splashed across the front of the iconic black and white jersey.

 

 

Over at Darsley Park, Newcastle's magnificent first-team training complex, Alan Pardew has a different set of figures in front of him. After 31 games in the Barclays Premier League, his Newcastle team are sixth in the table, 11 points clear of Liverpool.

 

This is the inside story on the complete restructuring of a famous football club, cutting it to the bone and finally settling on a sound business plan. It is the rebirth of Newcastle United.

 

 

When Mike Ashley bought the club in 2007 for £130m and granted an interest-free loan of £100m in 2008 rising to £140m at present, he was immediately caught up in football's brainless bubble. There were 'PAs for PAs', an annual wage bill that reached 91 per cent of turnover and a flawed recruitment policy.

 

He has made plenty of mistakes, most of which he has publicly or privately accepted, since he bought out Sir John Hall and Freddy Shepherd. Those errors include a string of chaotic managerial and executive decisions - Kevin Keegan and Dennis Wise, Joe Kinnear and Alan Shearer among them - based on advice from 'football people'. After Newcastle were relegated from the Premier League in May 2009, the billionaire businessman resolved to do it his way.

 

When Ashley arrived in the North East, annual interest payments and bank charges were a staggering £6.5m. That figure has been reduced to £212,000. The club save £200,000 a year using an in-house cleaning team at the stadium and the training centre, but make more money outsourcing the catering in the hospitality suites.

 

 

Recently they won an award for reducing carbon emissions, saving £400,000 a year in power supplies. If an employee does not turn off a light or leaves his computer on after work, an alarm sounds in the facility manager's office so that they know who is responsible.

 

This is Ashley's business model, unashamedly brought in from the nerve centre of retail giant Sports Direct. He hates waste. When Ashley is not satisfied, he isn't afraid to pick up the phone or fire off an email demanding improvements. Now Newcastle continually review, rehabilitate and then reset.

Ashley works on an 80:20 principle, placing his trust in managing director Derek Llambias to oversee the administration and operation of the club (20 per cent), plus the football (80 per cent). Their popularity ebbs and flows, confusing outsiders because it rarely tallies with anything that is happening on the field.

 

When Andy Carroll was sold to Liverpool for £35m in January 2011, supporters outside Shearer's, the bar at the stadium named after their record goalscorer, blamed Ashley. A little over a year later the Gallowgate taunted Carroll with chants of 'One greedy b*****d' when the Liverpool striker ripped off his shirt when he was substituted 10 minutes from time.

 

 

On February 5, 2011, when the team were 4-0 down at home to Arsenal inside 26 minutes, one supporter ran down the steps of the Milburn Stand, directed a thumb towards the south and told Pardew: 'Get back to London, you Cockney b*****d.' After Cheick Tiote scored Newcastle's 87th-minute equaliser, grown men were in tears in the boardroom at St James' Park (yes, Ashley and Llambias still call it that).

 

The owner is attending matches again, dining out with Llambias and his family in Newcastle the night before last weekend's impressive 2-0 win over Liverpool. They still encounter pockets of hostility, but accept the Geordie Nation's passion for the team playing at the sporting cathedral on top of Town Moor.

 

The current beef is the stadium naming rights, a decision that prompted some supporters to stage a mock funeral by marching to St James' Park with a black and white coffin. Ashley answers them all, telling them that with a stadium already operating at 91 per cent of capacity, he is forced to look at alternative revenue streams. Turnover at Newcastle last season was £88.46m, a million miles behind Manchester United (£286.3m), Arsenal (£222.6m), Manchester City (£153.2m) and Tottenham (£163.4m).

 

Newcastle's recruitment policy is crucial, but Ashley accepts that it will never be truly scientific - there is always a margin for human error.

 

Ashley has restructured the talent and development team, placing Newcastle's players on a grid that monitors current performance, valuation and future potential. It is a system that has produced spectacular results, with 'the 1s' a reference to first-team players and '2s' those pushing for a place in the team.

 

Many of them were identified by chief scout Graham Carr, working to a narrow and specific brief that was provided from the very top. Yohan Cabaye, Papiss Demba Cisse and Tiote were not on the radar of Newcastle's supporters until they set foot inside St James' Park.

 

Positions are identified by Pardew up to a year in advance and then Carr, along with his tiny team of talented scouts, set off on predetermined missions. Only players of a certain age, value and salary expectation make it through the sieve for consideration. The rest are discarded, no matter how good their agent promises they will be.

 

At any one time Carr, Pardew and Llambias have access to a confidential file that itemises the first-choice replacement for any first-team player or a potential second choice. Ashley does not believe that it is a ground-breaking system, but it works based on the financial restrictions in place at Newcastle.

 

 

Until recently, Ashley bought into the myth that Newcastle had to pay a premium to convince players to move to the North East. It drove prices higher and forced him to authorise bigger wages. After nearly five years in charge he will no longer succumb to temptation, trimming the wage bill to 60-65 per cent of turnover and fantasising about the unlikely day when it will be as low as 50.

 

With the exception of the team bonuses agreed with the squad at the start of the season, Llambias rarely commits to incentives in individual players' contracts. The strikeforce do not have a bonus for scoring or assisting in goals; and Newcastle's defence would not have been specially rewarded for their clean sheet against Liverpool, beyond their regular weekly salary. Occasionally, 'a 2' will be incentivised as part of his package to try to push his established rival out of the team.

 

Player negotiation is straight-forward, with a transfer valuation and a salary tag attached to each player on Newcastle's grid. When Carroll was attracting attention, Llambias enhanced the valuation of every player in the squad during the countdown to the close of the transfer window. By the time Liverpool came calling, it was too late for Newcastle to sign a replacement and the Merseysiders appeared desperate. Llambias set a fee based on the timing and, incredibly, Liverpool agreed to pay it.

Every player at Newcastle remains for sale, provided the price is right for Llambias and Ashley. They trust Carr and know that his team of nine scouts, some full-time and some part-time, are one step ahead and have already identified the replacement's replacement.

 

When the time comes for that to happen, they fully expect Pardew still to be in charge of the team to oversee the transition. He was brought in on a five-year contract, the man for the job after Llambias noted his work at West Ham.

 

 

Llambias's three children are Hammers fans and he frequently took them to Upton Park during Pardew's largely successful spell in charge. Pardew knitted West Ham together, sealing promotion in the play-off final against Preston in 2005 and taking them to within a whisker of winning the FA Cup against Liverpool the next year. Llambias made a mental note, recognising Pardew's qualities and working furtively behind the scenes in order to convince Ashley he was the right appointment.

 

Ashley has been impressed with his tactical acumen and his attention to detail since he replaced Chris Hughton in December 2010. His media profile and his conduct have met with Ashley's approval and the board are satisfied he has the complete respect of the players.

 

Pardew, along with his coaching staff, have the added security of long-term contracts, empowered by the board to make the best decisions for the team. They are done with the hire-and- fire approach that has seen Ashley terminate the contracts of Sam Allardyce, Keegan, Kinnear, Shearer and Hughton since January 16, 2008.

 

In that time, Chelsea, level on 53 points with Newcastle, have hired and fired four managers at a total cost of £46.3m. What a waste, as Ashley might say.

 

Neil Curtis

 

 

Read more: http://www.dailymail...l#ixzz1rCoA0C9E

 

 

 

 

 

God. What a load of crap

Edited April 5, 2012 by LeazesMag

[ewerk 30266]

I'm assuming that this was written by someone in Ashley's PR department.

[ChezGiven 0]

I'd assume the same ewerk if we were not a genuine story. Could well be of course but the strength of that story keeps increasing due to results, the last one I put down more to the disarray at Liverpool than our strengths.

 

I completely agree with Manc-mag's post except to say that as is rightly pointed out on here (and something I tried to estimate financially last year on here) the club's commercial income is currently well below it's potential. There are mitigating factors but Ashley will be doing a brilliant job when that is addressed, until then it's good but not great.

[LoveTheBobby 1]

I'd seriously love to know what the penalty is for leaving a light or computer on ?! "where an alarm sounds"

Does Dekka come gleefully striding down the corridor in his Cubans to put a formal warning on ya desk like !?

[The Fish 10744]

I'd assume the same ewerk if we were not a genuine story. Could well be of course but the strength of that story keeps increasing due to results, the last one I put down more to the disarray at Liverpool than our strengths.

 

I completely agree with Manc-mag's post except to say that as is rightly pointed out on here (and something I tried to estimate financially last year on here) the club's commercial income is currently well below it's potential. There are mitigating factors but Ashley will be doing a brilliant job when that is addressed, until then it's good but not great.

Where do you think that extra commercial revenue can be found? We can't expand the stadium any more, it doesn't seem like we're fighting off suitors for the naming rights but even if we are I doubt it'll flood the club with the £100m we're behind the top earners. Virgin Money have a two year deal worth a reported £20m. We could I suppose have two sponsors for the shirts, like Spurs, but that deal only brings in another £5m.

 

Maybe different sponsors for home and away shirts, for cup and league competitions?

 

How much money could be generated by hosting a pre-season friendly competition (like the Ajax cup etc.), or international tour? Not that much, surely?

 

I don't think we'll ever be on the same level as Man U, but I genuinely can't see where we'll draw the kind of funds I believe we need to.

[PaddockLad 17079]

If were so far behind the likes of spurs in terms if turnover then why isn't sports direct paying the going rate for naming rights and the other advertising at the stadium? Its this sort of inconsistency that articles like this never question. As mentioned the whole lot sounds like it was written by Ashley's mum. I think this is what journo's call a "puff piece"

[Davey Dave 0]

Yeah, but we've got £25 million in a neat little pile somewhere within St. James' that Ashley goes and stares at occasionally.

 

correct

 

[Christmas Tree 4692]

Yeah, but we've got £25 million in a neat little pile somewhere within St. James' that Ashley goes and stares at occasionally.

 

correct

 

 

They should include it on the Stadium Tour then Leazes could go and look at it as much as he likes.

[Kitman 2204]

 

They should include it on the Stadium Tour then Leazes could go and look at it as much as he likes.

 

You're onto something there. The money could be kept in a room called "Ashley's pocket"

[ewerk 30266]

If were so far behind the likes of spurs in terms if turnover then why isn't sports direct paying the going rate for naming rights and the other advertising at the stadium? Its this sort of inconsistency that articles like this never question.

 

They're 'showcasing' the opportunity, incase anyone didn't realise how it would work.

 

While I hate the fact that they've tried to change the name and have plastered the ground in tacky SD branding, I can't begrudge them having it for free, given the amount of money that Ashley has put in and the fact that much of it is not replacing existing advertisers.

[The Fish 10744]

If were so far behind the likes of spurs in terms if turnover then why isn't sports direct paying the going rate for naming rights and the other advertising at the stadium? Its this sort of inconsistency that articles like this never question.

 

They're 'showcasing' the opportunity, incase anyone didn't realise how it would work.

 

While I hate the fact that they've tried to change the name and have plastered the ground in tacky SD branding, I can't begrudge them having it for free, given the amount of money that Ashley has put in and the fact that much of it is not replacing existing advertisers.

 

I still can

[ewerk 30266]

Why?

[The Fish 10744]

I've not forgiven them for the way they treated Keegan, the way they've treated the fans, and so on.

[ewerk 30266]

Don't get me wrong, I still think that Ashley and Llambias are cunts of the highest order. But given the money that Ashley has had to put in (partly of his own making), I don't mind a bit of free advertising for his company. Though I obviously still strongly disagree with any name change of SJP.

[The Fish 10744]

Thing is, if he'd bought the club with his eyes open, he could have put this current model in place immediately and saved himself millions. I just think he owes us a lot more

[Toonpack 9244]

Thing is, if he'd bought the club with his eyes open, he could have put this current model in place immediately and saved himself millions. I just think he owes us a lot more

 

I would think he wishes he had, widely reported he knows he made mistakesand put trust in the wrong people, now it's his way or the highway and it would appear to be working.

[Park Life 71]

Here's how Newcastle became the Talk of the Toon (again) thanks to Ashley's rethink

 

 

 

 

Read more: http://www.dailymail...l#ixzz1rCoA0C9E

 

Hats off.

[The Fish 10744]

Here's how Newcastle became the Talk of the Toon (again) thanks to Ashley's rethink

 

 

 

Read more: http://www.dailymail...l#ixzz1rCoA0C9E

 

Hats off.

Any need to quote the entire thing?