Outlook: The beautiful game turns nasty

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NEWCASTLE UNITED is proving rather better at creating a stir off the pitch than on it. Since floating on the stock market 18 months ago at the height of the craze for football shares, the club has bumped up against almost as many corporate governance issues as it's managed to score goals. Off the pitch it's wowed the City with a performance of such cavalier disregard for the accepted norms of a publicly quoted company that it almost commands admiration. On the pitch, it has been numbingly pedestrian.

It would be easy to get high minded and indignant about this, to rail against the impotence of regulators in the face of such blatant and deliberate insolence. But the truth of the matter is that even the briefest perusal of the prospectus would have revealed this as a quite likely turn of events. That plainly didn't stop a veritable army of Geordie supporters from subscribing, but the great bulk of fund managers steered clear.

None of this makes what has happened any more justifiable, but at least it recognises the reality of the situation. Douglas Hall and Freddy Sheppard control the company, and as long as they don't break Stock Exchange listing rules, they can do exactly what they like - subject to the obvious proviso that they don't need to tap the capital markets for money again, for they will be refused next time round.

It is not against the rules to describe the fans as "mugs" for paying so much for the club's football shirts, nor is there anything to prevent you from depicting the captain of your team as "Mary Poppins", even when these comments are delivered from the boudoir of a Spanish brothel. Indeed, most people might reasonably agree with these sentiments.

As for the coming and going of chairmen and non-executive directors (more often going), these people ought to know better than anyone the false respectability their names lend to business fiefdoms of this sort. It is all very well resigning in protest over such a predictable outcome; most shareholders will want to know why men of such apparent wisdom and reputation took the job in the first place.

Plainly, the best solution would be for the Halls to buy out the minority; this company was never meant to be quoted. Unfortunately that is unlikely to happen. The Halls must know as well as any that Newcastle United isn't worth even the pounds 140m it is now valued at, let alone the pounds 190m at which it was floated. Having "deleveraged" its investment in the club with money raised from "the mugs" at the top of the market, the family is not about to leverage it up again now that everyone is coming belatedly to realise that football is perhaps just a game after all, and not a commercial business.

Manchester United may be worth pounds 675m to Rupert Murdoch; the takeover will give him a powerful position at the negotiating table for TV rights. But it is not apparent that these clubs can command anything like the same magnitude with anyone else.

As trophy assets, they have become too expensive, even for the rich and famous, while as stand alone enterprises they are surely overvalued in the extreme. Extra revenue from TV rights and merchandising promised to transform football into a high return business. In reality the additional monies are being gobbled up in higher salaries and transfer fees, which in football have doubled in the last two years alone. The lesson is an obvious one; leave football to the players, the fans and the mugs.