Mike Ashley readies £100m transfer budget for Rafa Benitez at Newcastle United

Justin Barnes, Mike Ashley and Lee Charnley.
Justin Barnes, Mike Ashley and Lee Charnley.

Mike Ashley is ready to offer Rafa Benitez £100million to spend – over four transfer windows.

The club yesterday published its latest set of accounts for the year ending June 2018.

And the figures shed light on the club’s finances as Benitez, out of contract in the summer, “waits for answers” from owner Ashley.

Newcastle recorded an £18.6million profit for its first year back in the Premier League.

Turnover increased by 108% – £85.7million to £178.5million – and media income was £126.4million, up from £47.4million in the Championship.

The club had £33.8million in its bank accounts at the end of the year. It had been overdrawn 12 months earlier following its year in the second tier of English football.

A short-term loan of £33million has been repaid to owner Mike Ashley, who is still owed £111million in long-term funding.

Newcastle’s financial results come as manager Benitez – who guided the club to a 10th-placed finish last season – waits for a formal response from Ashley after outlining what it would take to get him to sign a new deal at the club.

Speaking ahead of tomorrow’s home game against Southampton, Benitez said: “I don’t want to give too much information. All I will say is that we had contact behind the scenes, because we couldn’t be talking every week about our conversations. Now, we’re in the same position we were in one month ago. That is it. Waiting for answers.”

Ashley is understood to be prepared to sanction a £100million spend over the next two years.

That figure would be supplemented by outgoing transfers and £11million which wasn’t previously spent, though that might not be enough to persuade Benitez to sign a new deal.

Benitez wants to compete higher up the Premier League – and challenge for European football.

Lee Charnley, United’s managing director, says ongoing discussions with Benitez will remain private.

“We don’t want to comment on speculation about the manager’s future,” said Charnley. “We would prefer for conversations between Rafa and the club to remain between us.

“We will communicate with supporters as soon as there is a formal update.”

Charnley, in a statement, defended the club’s “prudent financial management”.

“A 10th-placed finish in our first season back in the Premier League was a fantastic achievement and I would like to thank everyone connected to the club – staff, players and fans – for their collective efforts,” said Charnley.

“The significant increase in revenue, together with prudent financial management, resulted in the club showing a profit and that is reassuring, given the substantial loss in the previous year.

“There is much more work to be done but these positive financial results give the club a strong platform on which to build. We all want to see the club improve and be competitive at every level, and in every competition.

“We are convinced that the best route to achieving this is to do so sustainably, spending on young development players and adding high quality to the first team squad each season – players that can really make a difference and improve the team – without risking the financial health and stability of the club.

“We strongly believe that consistently doing the above, and robustly following this policy, will give us the best possible chance of achieving our shared ambitions.”

On the club’s short-term debt, Charnley said: “Clearing our short-term debt – some of which was meant to have been repaid much earlier – is a key part of living within our means.

“As a result of the repayment, the amount due to the owner now stands at £111million, all of which is considered, by the owner, to be long term in nature having been in place for over a decade, and repayable only in the event of the sale of the club.

“Whilst the financial results announced relate to the year ended June 2018, I would also like to take this opportunity to present an update on the club’s transfer spend since June 2018.

“Our budget to strengthen the team has been circa £122million over the last two seasons, which was an initial agreed budget of £70million plus an additional £52million generated as a result of sales and outgoing loans.

“We have spent just over 90% of that and the balance of £11million will be carried forward to supplement what we have for forthcoming transfer windows.”