Newcastle's bond holders sacrificed on altar of profit

Fans who invested £500 to guarantee the right to buy a seat at St James' Park for 10 years have fallen foul of expansion in corporate hospitality

EIGHTEEN MONTHS after "Toongate", when Newcastle United's two main shareholders were caught in a Spanish lap-dancing bar, bragging about their exploitation of supporters, the Prime Minister's favourite football company is again embroiled in scandal. This time, the club has written to 4,000 season ticket holders, half of whom have £500 "bonds" guaranteeing their place at St James' Park for 10 years, announcing that the seats have been earmarked for corporate entertaining next season, and will cost £1,350 each.

EIGHTEEN MONTHS after "Toongate", when Newcastle United's two main shareholders were caught in a Spanish lap-dancing bar, bragging about their exploitation of supporters, the Prime Minister's favourite football company is again embroiled in scandal. This time, the club has written to 4,000 season ticket holders, half of whom have £500 "bonds" guaranteeing their place at St James' Park for 10 years, announcing that the seats have been earmarked for corporate entertaining next season, and will cost £1,350 each.

Current prices in the affected areas, the centre of the Milburn Stand and the stand known to fans as the Leazes End - officially the Sir John Hall Stand - are £498 and £383 respectively. Fans declining to pay the new price, which represents an increase of either 271 or 352 per cent, have been offered moves to other parts of the ground, predominantly the new upper tiers currently being built high on the same two stands, already nicknamed "The Gods".

Supporter reaction is as intense as Toongate's aftermath, after which Douglas Hall and Freddy Shepherd resigned as directors, only to return a few months later, Shepherd then becoming chairman. Fans are planning to demonstrate against the move at Monday night's televised match against Derby, to boycott programme sales, catering and merchandise, and to leave their talismanic - and self-confessedly overpriced - black and white shirts at home.

"Fans are incensed," said a spokesman from the Independent Newcastle United Supporters Association. "The snub to ordinary season ticket holders, shifted for corporate entertainment, is bad enough. But for those who bought bonds, this is an absolute disgrace."

Newcastle introduced the bond in 1994, with Kevin Keegan still in charge of a cavalier team, and the then chairman Sir John Hall's rhetoric in full flow. Sir John launched the bond in Monte Carlo, flying in an audience of 40 journalists. The bond, he said, would help to develop a stadium to a new capacity, widening access and allowing, he said: "A price for every pocket", specifically including young people, OAPs and the unemployed.

Fans were then sent a brochure, headlined "The next 10 years guaranteed", with letters, signed by Hall and Keegan, asking for the £500 "investment". This gave fans the right to buy a season ticket for 10 years and complimentary home cup tie tickets for three years. "As a bond holder," the brochure said, "your name (or your company's) will be fixed to your own personal seat."

Jane Duffy, 44, a Newcastle City Council education advisor, who has been a Magpies fan since her father took her to her first game in 1969, was one who paid up. "It was the fear factor," she says. "I knew it was a rip off - £500 for nothing - most people did. But we were told waiting lists were building up. I was, simply, scared of losing my seat." She bought a bond each for her and her father, paying for one through the club's own loan scheme, at 19 per cent interest. In total, 9,500 Newcastle fans bought bonds, paying £4.5m to Newcastle United. Between 1989 and 1992, it cost Sir John Hall and his family only an estimated £3m to buy the club itself.

Presenting his vision for Newcastle at the time of the bond, as the focal point for the North-east community, Sir John told this newspaper: "The Geordie nation - that's what we're fighting for! London's the enemy! You exploit us, you use us."

Three years later, Sir John floated Newcastle on the London Stock Exchange. His then 57 per cent family stake was valued at £102m. The prospectus, issued to potential investors, described the club's business as "selling viewing rights to football matches", and highlighted the "high quality revenue streams" gained from the bond scheme and "Platinum Club" tickets at £3,000 per time.

The latest letter effectively relocating bondholders is part of the latest redevelopment of St James' Park, for which a contested planning application was granted in April 1998 and which is due for completion next August. During the planning process, the chief executive Freddie Fletcher bemoaned to the city council that Newcastle, at 14 per cent, had the lowest number of school age supporters of any Premiership club.

The suggestion was that the increased capacity, from 36,500 to 51,500, would enable more young people to go to the game. Yet Newcastle's City of London-based spokespeople, Brunswick PR, said yesterday that no plans had yet been finalised as to whether concessionary tickets will be available in the new ground, nor as to the price of next season's tickets.

The club says it has the right to move bondholders, despite the 10-year guarantee, relying on the scheme's small print, in particular clause 9 (b), which, it argues, allows the club to change the designation of a seat. But supporters, some of whom are taking legal advice, insist that the literature and advertising gave a clear impression that £500 would guarantee the same seat for a decade.

"I am so angry," Ms Duffy says. "I feel totally conned. This is the club I love and have grown up with, but these people in charge show total disregard for supporters and their loyalty. We're just the ultimate commodity, to be exploited."

A Brunswick PR spokesman stressed that the disaffected, vocal fans were matched by 1,500 supporters who have quietly, willingly moved following receipt of their letters: "The club really wants to listen to supporters' concerns and we ask them all to come and talk to us."

But he said that in 18 months since planning permission was granted, no consultation had taken place with supporters.

Dolly Potter, whose Friends of Leazes Park group led opposition to the stadium, now feels vindicated. "There was a lot of grand talk then, about St James Park being a spiritual home, about the football company being Newcastle's most important institution. But while the company's owners have talked the language of club and community, they have exploited the fans - and the local area - to make a great deal of money for themselves."

The row comes with the Football Task Force's final report imminent, addressing both ticket pricing and football plcs' relationships with supporters. The football authorities are believed to have submitted that no minimum standards should be set, and that instead "best practice" should be encouraged. In the face of Newcastle's latest practice, Task Force insiders said yesterday that such a laissez-faire stance looks increasingly untenable.

Last year, the Hall family agreed to sell their Newcastle stake for £81m to US cable company NTL, only for NTL to withdraw in May following the Government's blocking of BSkyB's proposed Manchester United takeover. The Halls sold NTL 6.3 per cent, for £10m, leaving them with a controlling 51 per cent of Newcastle.

In April 1997, at the time of flotation, Sir John Hall expounded his footballing vision to the magazine Total Football. "We chairmen have to be responsible. We take money out of our communities; we've got to put something back. I hope that pure greed does not take over and ruin everything."

Sir John, who now spends most of his time in Marbella, was unavailable for comment yesterday.