Newspaper article The Journal (Newcastle, England)

Magpies Still Have Financial Worries; EXCLUSIVE: Newcastle Still Have Financial Worries

Newspaper article The Journal (Newcastle, England)

Magpies Still Have Financial Worries; EXCLUSIVE: Newcastle Still Have Financial Worries

Article excerpt

Byline: Luke Edwards

NEWCASTLE United will only be able to flex their financial muscle again after one season back in the Premier League as Mike Ashley still tries to stabilise the club's accounts.

Although United did spend around pounds 13m in the transfer market if wages and loan fees are taking into consideration, the estimated pounds 30m extra income generated by promotion back to the Premier League has been used to cover running costs and to clear the club's overdraft with the bank.

And, while the financial situation may have improved with the return of Premier League football, the club remains in a fragile position and is heavily reliant on the backing of their controversial owner.

United already owed the sports shop retailer more than pounds 111m in interest-free loans, according to the most recent set of accounts, but The Journal understands that this figure has increased over the summer as Ashley (pictured below) paid for the club's new signings out of his own money.

The board's entire business plan depends on Newcastle avoiding relegation this season with sources indicating that only survival can loosen the purse strings at St James' Park next summer.

If United remain in the top flight it will be financially selfsufficient by this time next year, with all of the extra revenue generated earmarked for squad improvement.

That will only increase the pressure on manager Chris Hughton - who is out of contract at the end of this make or break campaign - to keep the Magpies out of relegation trouble. If he cannot keep the team up, the damage will set the club's finances back at least another two years.

Ashley was forced to pump in around pounds 25m of his own money to keep the club ticking over in the Championship last season and refused to sanction a major spending spree in the summer as a result. That angered some supporters, although the limited activity that did happen during the transfer window has been welcomed, with a general acceptance that the books need to be sorted out before Newcastle can try and compete with the biggest clubs in Europe again. …

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