NEWCASTLE United chairman Chris Mort has revealed that Newcastle United's financial position was so dire when new owner Mike Ashley took charge the club could have been out of business by the end of this year.
Ashley paid an initial £133m to buy the club in the summer and has invested a further £75m.
Mort admitted the new owners were astonished by the depth of problems they encountered.
"We were surprised at precisely how bad the financial position was. We didn't fully realise it from the outside," said Mort.
"If the old board had not been successful in re-financing the club by the end of the financial year it would have folded.
"They were in big trouble because, if you remember, Mike bought United in the May and the club's financial year was up on June 30.
"No doubt this crisis looming on the horizon was one reason why they wanted to sell.
"We have addressed the situation, met it head on, which is why Mike initially put in £30m of his own money and has now committed a further £45m to pay off the big debts that had people clamouring at the door.
"What we also found was that the club had spent sponsorship money before it actually came in. For example, all the cash from Northern Rock, which should have been paid annually, has already gone (said to be used to help buy Michael Owen at £16m). Money was also borrowed against a deal with adidas.
"We prefer to invest as the cash comes in, not before it does.
"I'm not criticising the previous regime. Their heart was in the right place because they were doing what they could to bring success to the club."
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