Chief executive Lawrie McKinna insists the Newcastle Jets will spend more on players this season than in any other despite owner Martin Lee’s business taking a major financial blow.
It was reported on Tuesday that Lee’s company, China-based Ledman Opto-electronics Group, has felt the brunt of a trade war with the US and the introduction of a 25 per cent tariff by President Donald Trump.
As a result Ledman’s share price has halved since May and the impact threatens to flow on to his other business interests, including the Jets.
However, McKinna said the club’s budget remained unchanged despite Lee proposing in July a $600,000 reduction as part of cost cutting across his companies.
“It has been business as usual,” McKinna told the Herald from Germany where he is presenting at a conference and meeting with the boss of Bundesliga club Borussia Dortmund. “We are working from the same budget we had approved in July. Martin asked us if we could trim it. I said we couldn’t and explained why. We are going into qualifiers for the Asian Champions League and we need to spend money on the squad. He said: ‘no problem, just be careful what you spend’. Since then we have put on football and administration staff and recently signed Jair.”
The Herald understands that the Jets’ player budget for last season was about $3.7million, around $750,000 above the salary cap. Ronny Vargas was the club’s first marquee signing, whose contract sits outside the cap, since the exit of Emile Heskey in 2014.
“Last year was the most the club has spent on players, and this year will be about the same again, slightly more,” McKinna said.
As well as re-signing Vargas and adding Jair and Kiwi international Matthew Ridendton, the Jets have upgraded and extended Dimi Petratos’ contract. Captain Nigel Boogaard and fellow regulars Jason Hoffman and Steve Ugarkovic have also signed new deals beyond this season.
In the absence of McKinna, football operations manager Joel Griffiths and coach Ernie Merrick will address the players before training on Thursday.
“It is important to reassure them that it is business as usual,” Griffiths said.
Griffiths confirmed that management were working on a budget for next season and said confidence in the club was high.
“We are signing players who are in high demand,” he said.
“Every club wanted Dimi, every club was after Steve. We are in a good place. If things weren’t going well we wouldn’t be on the front-foot signing players.”
Lee bought the Jets from Football Federation Australia for $5 million in 2016, after the governing body had taken the licence from the previous owner, fallen coal baron Nathan Tinkler after he was unable to pay bills.
That is certainly not the case under the Lee’s ownership.
“You send in a bill and the next day it is paid,” a supplier told the Herald.
A football fan, Lee also owns a team, Shenzhen Ledman, in the Chinese third division and has the naming rights for Portugal’s second division.
The Jets finished last, winning just five of 27 games, and suffered a $3 million loss in Lee’s first season.
However, the club improved dramatically – on and off the pitch – in year two, culminating with a controversial 1-0 loss to Melbourne Victory in front of more 29,000 fans at McDonald Jones Stadium.
Membership numbers and corporate sales have continued to grow and McKinna is confident the Jets will be a break-even enterprise within two years.
“Sponsorship is up and membership is up,” McKinna said. “Last year membership started at 7,000 and finished at 9200. We are currently just under 9000 and hoping to crack 11,000. The squad is looking good and everything is going to schedule.”