Newcastle United are losing £500,000 per week

Feb 25 2010 by Luke Edwards, The Journal

THE need for Newcastle United to make an instant return to the top flight has been underlined by the revelation the club is losing around £500,000 a week in the Championship.

United made drastic cutbacks in the summer following relegation, but have still needed to be bankrolled by owner Mike Ashley after he failed to find a buyer. The size of United’s losses makes it imperative that promotion is achieved this season or even bigger cuts will be made in order to ensure the club’s survival in May.

The Journal revealed before Christmas that Ashley had loaned the club £20m to cover everyday running costs. It is understood the retail entrepreneur may put even more of his own money in before the end of the campaign because of the extent of the losses, although the books have been boosted by crowds of more than 40,000 in recent weeks.

A senior United source said: “Newcastle United couldn’t survive at the moment without Mike’s money, it’s as simple as that. If Mike and the banks weren’t willing to cover the cost of relegation Newcastle may well be in a Portsmouth situation. It is costing Mike £500,000-a-week this season to keep Newcastle running without making further cutbacks, yet some people are saying the club should be able to wipe its own mouth, that it should be able to run by itself with the income coming in.

“You can not lose £50m in revenue and expect not to have to take a hit, particularly when you have the overheads Newcastle have.

“The wage bill was reduced, but it’s still way too big for the Championship.” Although Ashley’s mistakes at St James’

Park certainly contributed to the club’s demise, he has tried to rectify them by allowing Chris Hughton to retain a wage bill in excess of £40m in the second tier.

That has enabled United’s former caretaker manager to maintain a squad which, in his opinion, has the best possible chance of returning to the top flight at the first attempt.

Ashley, though, is unlikely to allow the business to haemorrhage money in this way long term and it remains to be seen whether he looks to find a buyer again in the summer, regardless of what division the club are in.