Former NUFC chairman, Freddy Shepherd, sadly passed away on 26th September, aged 75. The reaction to his death on social media suggests that Freddy very much polarised opinion amongst Newcastle supporters.

There are some who thought he and the Halls milked NUFC dry; that he presided over the club going into a financial meltdown; and that he dragged the proud name of the club through the gutter with the News of the World exposé.

Others point out to his undoubted love for the club, the achievements on the pitch under his tenure and compare his ambition for NUFC to those owners before and since he took over.

This article will take a look specifically at the finances during Shepherd’s ten year tenure as Chairman of the club from July 1997 to June 2007. The perceived wisdom is that he left a financial basket case for Ashley to clear up. That the club could have ended up in administration.

However, Shepherd always defended his stint at St James’ Park, saying: “It’s absolutely ridiculous to say the club was in a mess and going to the wall. It was in good shape when I left.”

So who is right? We will attempt to do a balanced analysis of the finances during Shepherd’s tenure as Chairman and in particular what he left as his financial legacy to NUFC.

The table below shows some key figures that give an indication of the financial health of a club.


Let’s pick out the good, the bad and the ugly from those figures.

The Good

There’s actually quite a lot to admire in the numbers, particularly over the Robson era (99-04) where Shepherd ran a rather tight financial ship. A wage to turnover ratio below the generally accepted benchmark of 50%; turnover consistently one of the highest in Europe; impressive commercial revenue generated through lucrative deals with Adidas, Northern Rock, S&N etc (Ashley has not managed to match this commercial revenue since); a big rise in gate money as a result of the stadium expansion; and a relatively low debt despite the ground redevelopment (that Shepherd reckoned would have cost £450m in 2008); and unlike now, we weren’t over reliant on TV money.


The Bad

But despite all the “good”, it would be disingenuous to suggest that Shepherd didn’t leave anything but a financial basket case when he sold up in June 2007. A record £34 million loss; £27 million owing on transfer fees; extremely limited borrowing capacity, as all assets and income streams had already been used to secure loans; and a bloated wage bill of ageing mercenaries on generous long-term contracts. It was always going to be very difficult to turn that around quickly. Enter Mike Ashley.

There can be little argument that Ashley initially dipped deeply into his pretty deep pockets to turn the situation around. He repaid the expensive bank loans (£70m) which were payable upon transfer of ownership, a fact that he was purportedly unaware of after failing to undertake due diligence. He also provided a further £41m working capital on top of that (plus £25.5 million subsequent to the books closing) trying to put the club on a sound financial footing.

As a result, the debt (albeit mainly loans from Ashley) spiralled to £150m by 2009. This debt, albeit slightly smaller, still plagues the club now. Like the previous loan, it becomes payable on a transfer of ownership, effectively adding the debt to the purchase price and deterring potential buyers.


The Ugly

Whilst it can be argued that “the bad” was as a result of Shepherd’s naïve ambition in returning NUFC to Europe’s elite, what is more difficult to defend is the money he and the Halls took out of the club in the form of salaries and dividends. The Shepherd family made over £50m from their years at St James’ Park (£38 million Ashley sale, £7 million dividends and £5 million salaries). Additionally, the accounts show that between 2003 and 2007, the club paid £1.6m to rent warehouse space and houses from Bruce Shepherd’s company, SMP Services. In 2007, Newcastle paid £82,000 to Triple S Sports Consultancy, a company run by Freddy Shepherd’s son, Kenny, who rented office space in St James’ Park.



My personal view on Shepherd is that he was a flawed but ultimately well intentioned owner. He wanted NUFC to be amongst Europe’s elite. He was basically a supporter.

But supporters don’t always make the best owners. They can let emotion cloud their decision making. The day Shepherd sacked Robson was the day things started to go horribly wrong, both on and off the pitch. He brought in a hopeless manager and backed him with stupid amounts of money. But I don’t remember many of us complaining about the spending at the time. It’s easy to look back in hindsight at the finances and ask what on earth he was thinking.

Some of the criticism aimed at the state that Shepherd left the club is difficult to refute. There can be no dispute that the club was mortgaged to the hilt and owed a shedload on transfer fees when he sold up to Ashley. But as Shepherd pointed out “Yes, they were still paying off the tail end of Owen’s deal and possibly one or two others, but we’re not the first to have done that,” he said.

And Ashley should have known that. It was his decision to buy the club, warts and all. He can hardly complain about the state of the club he inherited. If he didn’t do due diligence, that’s his problem.

With regard to the salary and dividends that Shepherd took out the club, it should be pointed out that he worked unpaid until 1996. By that time, Newcastle’s financial fortunes had turned around and it could be argued that the Directors salaries were justifiable.

Shepherd proclaimed in 2008 – “We’ll stand by our record, the Halls and the Shepherds. We built a great stadium, we built a great training ground. We left all the tools there and a good set of players. Everything was there. We’ve nothing to be ashamed of.”

I’m inclined to agree with him.

Andrew Trobe