Shepherd does Newcastle favour with Northern Rock deal

Newcastle United have escaped a major headache over the Northern Rock crisis thanks to an extraordinary piece of business by former chairman Freddy Shepherd.

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In 2005, the Tyneside-based bank agreed a five-year deal, reportedly worth around £25million, to be the club's shirt sponsor.

Payment for such deals is usually spread over the course of the contract but Shepherd negotiated for Northern Rock to pay most of the cash, nearly £20m, up front.

Around the same time, the club splashed out £16m on signing Michael Owen from Real Madrid.

New Newcastle chairman Chris Mort was initially unhappy on discovering the terms of the deal but, given the bank's spectacular demise, Shepherd's manoeuvre now looks inspired.

The club are expected to hold talks with the bank's new chiefs to negotiate a release from the agreement before 2010.

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