Source: Telegraph
Newcastle owner Mike Ashley to address escalating wage bill
The sports retail tycoon will increase efforts to bring his players' salaries under control after new statistics provided an insight into the running of the Tyneside club. [LNB]Financial figures for the period up to June 30, 2008 show wages and salaries amounted to £62.3 million, up from £52.1m, and although the ratio between wages and turnover fell, it still amounted to more than 70 per cent. [LNB]According to football experts, a 50 per cent ratio represents a healthy scenario which suggests that inflated salaries at Newcastle could become a thing of the past and, as if to confirm the new realism at the club, the signing of free-agent Peter Lovenkrands until the end of the season was confirmed on Friday. [LNB]The figures also reveal that Newcastle had to pay out £4.6m to Sam Allardyce and his staff after dispensing with his services in January last year. [LNB]In addition, the results confirm Ashley's claim he has poured £100m into the club since completing his £134.4m takeover, and reveal he has injected a further £10m into the business since the end of the reporting period. [LNB]Newcastle United Football Company Limited, part of the St James Holdings Limited group set up by Ashley to acquire the club, reported increased turnover of £98.8m, up from £87.1m the previous year, mainly as a result of the new television deal for Premier League clubs. [LNB]The figures also show the club received compensation of £6.7m for the knee injury striker Michael Owen suffered at the 2006 World Cup finals and his subsequent treatment and rehabilitation. [LNB]Overall, the club reported a loss of £20m for the year compared to £31.4m in 2007. [LNB]Ashley has also agreed to continue to finance the club after taking it off the market late last year following an unsuccessful bid to sell it. [LNB]A note to the report reads: "This funding, together with newly-agreed bank facilities, has been incorporated into the directors' cash flow forecast for the group. [LNB]"These forecasts indicate that the group can continue to meet its debts as they fall due for a period of at least 12 months from the date of approval of these financial statements. [LNB]"The directors have also received a commitment from its parent undertaking, St James Holdings Ltd, and from the ultimate controlling party, Mr MJW Ashley, that they will continue to provide the group with financial support so that it can meet its debts as they fall due for a period of at least 12 months from the date of approval of these financial statements or up until the date of any changing control. [LNB]"On this basis, the directors have prepared the financial statements on a going-concern basis."[LNB]The latest figures do not include the club's acquisition of Jonas Gutierrez, Danny Guthrie, Fabricio Coloccini, Sebastien Bassong and Xisco, nor the sales of James Milner and Abdoulaye Faye, while the club are still involved in a legal battle with Allardyce's successor, Kevin Keegan, following his departure in September. [LNB]The numbers game: [LNB]Total wage bill: £62.3 m - up from £52.1m in 2007Monies owed to Allardyce: £4.6mAmount Ashley paid for club: £134.4mExtra cash Ashley has poured into club: £110mTotal loss for year ending June 2008: £20m [LNB]
