What look to me to be a series of genuine errors that have gone uncorrected this week led to the claim that Rafa Benitez might have an £80m transfer kitty in his back pocket to spend in upcoming windows. I’m not an accountant, but I think this is not necessarily the case and hope to shed some light on where the idea came from.
The Chronicle yesterday published the story with the headline “New Mike Ashley accounts suggest money is available to Newcastle United for transfers”. The story refers to a “statement in the accounts pledging £80m for transfers”. The accounts referred to are for MASH Holdings, the overarching company Mike Ashley uses to manage all of his investments including Sports Direct and Newcastle United. The annual accounts for this company covering the period to April 2016 were published earlier this week and state that “subsequent to the balance sheet date the club has committed to a further net spend of approximately £80m on additions to the playing squad”. What this would mean is that between April 2016 and September 2017 (the published date) the club had a net spend of £80m on transfers.
Anyone paying attention to our transfer record would be confused and look to understand that claim. Newcastle United most definitely have not had an £80m net spend since being relegated to the championship. The club made a large transfer profit in the championship thanks to the sales of Sissoko and Wijnaldum. This amount exceeded the transfer spend after promotion, which would suggest an overall profit rather than the huge spend stated. The Chronicle were correct to recognise this discrepancy and dig into it, but it’s an error to leap to the conclusion that it reveals a commitment to spend that much money in future.
Clarity comes by looking further in the accounts. A later note states “Subsequent to the balance sheet date the Newcastle group has generated a surplus of approximately £40m (2015 – net spend of £80m) in respect of changes to the playing squad”. This looks much more like what we would have expected looking at the business done. A £40m net profit since relegation. An £80m net spend (McClaren’s folly) in the year prior to relegation.
So, why the contradiction. My personal view is that it’s nothing more than a mistake. When pulling the accounts together the 2015/2016 spend of £80m has inadvertently been used rather than the surplus for 2016/2017 and since correctly used elsewhere.
Others that look at these things who I’ve discussed it with think the two £80m amounts covering different time periods might alternatively reflect different things altogether. Perhaps the latter is gross transfer spend on signings only since relegation? Either way though, what we completely agree on is that it is not a transfer promise for this January and beyond.
It is excellent to see The Chronicle looking at these details. Such investigation should only be encouraged, we’ve seen at Rangers what scrutiny of Mike Ashley’s financial dealings can reveal, but with football reporters looking at financial matters, complex details can understandably be misunderstood. To their credit The Chronicle did ask the club and Sports Direct to explain the situation. The club’s refusal to provide a simple clarification is more problematic. Such speculation could have been avoided if only Newcastle United would be more forthcoming with dialogue on what Ashley is actually doing, especially when the information is already in the public domain and only needs clarifying.
Having previously complained about inaccuracies being reported, it’s disappointing to see a refusal from the club to provide the clarity needed to avoid misleading supporters.
CHRIS HOLT – Follow Chris on @bigchrisholt