/ 10 February 2006

St James’ cash cow

What is it about the Newcastle United manager’s job, filled until relatively recently by Willie McFaul, Jim Smith and other domestic gaffers, which has become so overblown that the club’s chairman, Freddy Shepherd, can describe the St James’ Park vacancy as ”one of the biggest in world football”?

On Saturday, during Newcastle’s 2-0 victory over Portsmouth, with Alan Shearer accepting the worship of a 54 000 crowd for breaking Jackie Milburn’s club scoring record, a heartfelt rendition of Blaydon Races cascading down from the Leazes End, you could believe the claim. Mass self-delusion this may be but it is a powerful brew.

McFaul and Smith, who grew care-worn in the late 1980s trying to keep Newcastle in the old first division watched by crowds hovering around 20 000, must wonder at the transformation. Its genesis lay in the 1991 takeover by the property developer Sir John Hall, who bought 79,2% of Newcastle United for an estimated £3-million after a bitter battle with the patrician former owner Gordon McKeag and installed Kevin Keegan as the manager, reawakening the Toon Army’s natural inclination to hero worship.

Hall, a national figure at the time and said to be Margaret Thatcher’s favourite businessman, hammered the idea that, more than a football club, this was the vanguard of regional revival. ”The Geordie nation, that’s what we’re fighting for” went one choice line of rhetoric. ”London’s the enemy! You exploit us, you use us.”

Michael Martin, the editor of the True Faith fanzine, recalls his own Geordie blood stirring as Keegan’s rejuvenated side galloped into the breakaway Premier League. ”John Hall tapped into something latent, the pride and the apartness of the north-east. Newcastle was depressed; industries like mining and shipbuilding had been destroyed. We bought into the idea of the club as the flagship of revival.”

Membership of Hall’s Geordie Nation came at a cost, in hyperinflated ticket prices, with £500 season tickets available on credit from the club at 19% interest rate, and at Newcastle, like no other club, replica shirts were adopted as required uniform. When the fans in black and white stripes rise to acclaim their team in the expanded St James’ Park the Toon Army becomes a living symbol of modern football: a giant barcode.

Hall promised to invest the money in the team and, after Keegan’s infamous crumble in 1995/96, Hall unveiled the £15-million signing of Shearer, the Geordie talisman. Eight months later payback began for the Halls. The north-east’s warrior football club was floated on the London Stock Exchange, after which the Hall family company, Cameron Hall Developments, still owned 57%. It turned out that the Halls had put money into the club only as loans and the new money raised by the float — much of it from fans who immediately lost fortunes as the share price fell — went partly to repay the Halls.

Shortly afterwards Sir John Hall retired to Marbella. He left Cameron Hall and the club to his son Douglas to run. It was not long before Douglas and Freddy Shepherd, then a director and less well-known minority shareholder, became the first football victims of the News of the World’s dressing-up cupboard, bragging to an ”Arab sheikh” in a Spanish lap-dancing bar about the Toon Army’s gullibility in buying replica shirts and calling Geordie women ”dogs”. The grossness of that boardroom image soured a mood already in a post-Keegan hangover, as Newcastle twice finished second in the Premiership then laboured prosaically under Keegan’s successors, Kenny Dalglish and Ruud Gullit.

The Halls had pledged to the City not to sell any shares until late 1998. That December, as soon as they could, they did, selling 6,3% to cable company NTL, making £10-million. Not widely noticed then was that the Halls had agreed to sell out completely should NTL bid for the whole club, which would have made the family a further £79-million. It did not happen, but the following year the family sold a further 3,26% of the Cameron Hall holding to NTL, making £5,28-million. Douglas personally sold a stake for £637 516.

The Halls had taken over Newcastle just a few years earlier, in an era when businessmen were still hailed as philanthropists for buying into football, and they have gone on to make massive money out of the club. The plc has declared a dividend every year after flotation worth millions to the major shareholders, the Halls, and Freddy Shepherd and his brother Bruce, who have steadily increased their holding. More recently, Freddy Shepherd and Douglas Hall have earned prodigiously as directors.

Remarkably Cameron Hall, which seemed to bestride the north-east in Sir John’s heyday, has slunk into a comparative wreck, making huge losses in 2000 and 2001, which it staunched by selling property. The football club seems to have changed from being a Hall marketing tool to the family cash cow. In June 2003 the Newcastle board announced that the club itself was buying some Hall family shares, paying £4,5-million. Cameron Hall’s accounts that year showed a loss of around £3-million; the latest accounts, for 2004, are late.

Douglas Hall has moved his residence off shore to become a tax exile. He is paid his half-a-million-pound salary package via a club subsidiary, Newcastle United (International) Ltd, registered in the tax haven of Gibraltar. His own tax planning accountant, Timothy Revill, who is based in Gibraltar, is a director of Newcastle United plc. Revill chairs the remuneration committee that determines Hall’s salary.

Shepherd has won himself some credit by staying stubbornly put. You get the sense that the financial mining of the club does not matter that much to too many fans. The Toon Army still seems largely sold on the idea that a huge part of their regional identity is wrapped up in the club. They are desperate for some success on the field to justify the journey.

That is why the job is so big. Any manager prepared to take it on will carry the wider hopes and historic frustrations of a powerful human sound bite called the Geordie Nation. — Â