This a brief look at the club finances for the season that ended July 2008, so the first full season that Mike Ashley was owner. There is no attempt to criticise the club or the people running it, just an attempt to try and help explain  how the club could have income of close to £100m and outgoings of close to £120m.

Ashley took over just before the season began so some things were already in place, so for example the contracts of the players. Other items were under Ashley's ownership and are purely to do with his running of the club.

Anyone wishing to judge Ashley needs to bear in mind the things he is responsible for, and the things he cannot be held responsible for.

A year ago the comment on this site was "In summary what Shepherd left was a club that was losing over £30m a year, had debts of £70m, had no assets they could borrow more money against, and had a set of players on long, lucrative contracts. Ashley can get rid of the debt but the £30m annual losses with over paid players will take longer to sort out."

This has proven to be the case.

The wages have gone up from £63.4m to roughly £70m. This is looked at further in the "Staff and Payroll" section but is difficult to get your head around. If the first team squad is made up of say 25 players then they would all be getting closer to £3m each rather than just £2m each. A frightening figure considering the on-field performances.

The Sky money has gone up dramatically but the gate receipts and merchandise numbers are going the other way. The 2008 gate receipts were lower than those in 2007 despite the average league attendance going up. The 2009 gate receipts will likely be down 10% on 2008. The club shop sales will be down due to fan boycotts. It is difficult to even try and estimate what the reduction will be.

The implications for this are that the club's financial position will get worse in 2009 rather than better. Ashley seems to have put any net spend on players on hold. There is a note at the end of the accounts stating that since July the club has spent £13,610,000 on bringing in players, and that it has brought in £13,615,000 from the sale of players. If ever it was clear that the strategy was to only spend what you have brought in from sales, then this is it.

If anyone wishes to see a copy of the club accounts, or wishes to make any comment about this site please contact me at ian@football-finances.org.uk