Mike Ashley’s Motivations and Dealing With Them As Newcastle Fans
Where do I start? How about, what’s the truth about Newcastle United’s finances?
At the centre of the angst is Mike Ashley’s Newcastle United business model. Some say he perpetuates a myth around the level of debt he inherited in order to create a false malaise on the profitability of the club, hence justifying the current austerity measures.
Some are more sympathetic to the notion Newcastle was a club previously operating on a financial wing and a prayer, with front-end loaded sponsorship deals and back-end loaded purchase agreements for players, as well as a murky loan-structure for the previous ground improvements.
There are several aspects merged into one here, so let’s try and unpick the plausible from the conspiracy.
Firstly, how many of us agree that the club did have a high degree of leverage at the point of Mike Ashley’s purchase? In other words, was there a considerable debt burden at the club? Whether you get off first base here is a very personal journey, but rational thinkers will agree most football clubs operate with a reasonably high degree of debt, especially those who have undergone significant expansion and been at the sharp end of player purchases for several years.
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If you’ve accepted the notion there was debt at purchase, the next question is, was this debt fully disclosed by the seller and/or assessed through due diligence by the purchaser? This is the point where we fans become more polarised. It is a reality that contract arrangements around loans, sponsorship deals and player purchases have become more and more complex. Tangible and semi-tangible aspects of these legal agreements merging together into somewhat subjective valuations that affect the overall balance sheet.
The question you’re left with is, do you agree a worldly-wise commercial operator like Mike Ashley would go through with such a purchase without understanding completely the debt structure of the club?
Some of me says no, whilst his business, the rag trade, is significantly different to the operations of a 21st century premier league club, you’d expect him to enlist advisors who could bridge that understanding.
On the other hand, the dynamics around the sale/purchase process are never ideal. Time constraints, the level of disclosure you’re entitled to, the amount of investment you’re prepared to make to kick the tyres, the competition breathing down your neck. How many of us have had to take a bit of a punt when buying a house; do you really think you’re getting value for money, is that damp patch in the corner superficial or more sinister, is the seller a DIY-Billy-bodger and is the plumbing and wiring, one professional inspection away from being written-off.
So, if you’ve got this far, you may be accepting there was debt and, perhaps, that the amount of debt may have been under-disclosed or underestimated when Mike Ashley completed his purchase. Just as an aside, I’d like to ask some questions about Mike Ashley’s motivations at purchase. Undeniably a successful hard-nosed business man in a cut-throat industry sector. Not, undeniably, a lifelong Newcastle United fan.
So was his purchase of Newcastle purely, 100% a business venture or did it have some even small element of personal passion and adventure? I’m not asking if you think that’s where he is now, I’m asking the question in the context of the point he chose to purchase; the bit just before he drank with the fans and a long time before he and his family were abused at the ground and “you fat cockney b******, get out of our club” was first sung?
I think this is an important journey of thought for all Newcastle United fans, like me, to embark on. I’ve been through it, I’ve had the 20 year plus season ticket and the Bond and I’ve sung the song – particularly during that disastrous relegation season.
Where I’ve got to is somewhere between a level of empathy and patient apathy; if that isn’t a contradiction in terms.
So, perhaps Mike Ashley bought a club and found it wasn’t quite the deal he thought he’d got. Perhaps he, when converting that debt or some part of it from a commercial to a personal loan, felt a little sore, annoyed at himself and slightly less passionate; business brain starting to win battle with emotional brain. Perhaps this resulted in some more hard-nosed business decisions around the operation of the club. Perhaps this is the environment where mistakes are often made.
And then, of course, this tipping of the balance, as often happens, starts to gain negative momentum. Our saviour KK is sucked in and spat out by the machine. In desperation to establish stability in an increasingly hostile environment, who, as an owner and increasingly an outsider, do you turn to?
Perhaps those you feel you know and can trust rather than those who might be best to turn around the football side. And if that decision goes wrong, and the footballing side goes into a nose spin, the atmosphere becomes even more hostile. How many of us in that situation revert to the place we know best, our comfort zone. Mike Ashley’s comfort zone is creating business models that succeed; business models based purely on maximising returns on capital and, by definition, banish any emotional or semi-rational thoughts and methods.
So, whilst we can perhaps debate the route to where we are today; whether you believe the undisclosed debt or you think Mike Ashley has always intended Newcastle United to be run the way it is today, we are where we are.
I’m very much of the opinion that Mike Ashley’s tenure will continue to be typified by business-centric strategies, tactics and decisions. This won’t lie comfortably with most, but that’s what we’ve got until someone tables an offer that makes business sense for him to accept and move on.
It’s true, a number of the owner’s decisions have been poor, but at least he’s had the good grace to accept some of the poorer ones; after the debacle of Dennis Wise versus Keegan and relegation. If ever he was a fan, and I tend to think he wasn’t by the definition we hold, this died when we fans turned so vocally against him and his family. I’m not saying it was our fault to be angry, as I said before, I sang the song. So now he’s just a businessman who owns a business called Newcastle United and he buys young players with potential and sells the better ones at a big profit. That’s the way it is, we might not like it but it isn’t going to change anytime soon, no matter how many times me or you says he’s a tw*t.
This certainly isn’t an article to defend him. I don’t believe overtly dispassionate business thinking has a place at our club, or that trying to replicate his Sports Direct retail success model is right for a football team.
Where I’m getting to is this. My grandfather introduced me to a saying, ironically around the time I started my Newcastle United journey. He said, “when things aren’t going well, only worry about the bits you can change.”
I could choose to write a damning piece about our owner, Alan Pardew, the perceived mismanagement of Hatem Ben Arfa, the questionable morality of our latest sponsor, the transfer policy and the TV money or the banning of the local media. I actually don’t subscribe to the hype on some of these issues but the key point is, however heartfelt the message or poignant the rhetoric, nothing will change as a result. I’m not expecting anyone at the club to suddenly have a watershed moment after which things would be completely different. Why, because the die is cast and the direction of the club is defined and firmly set in Mike Ashley’s ‘business plan’. The major shareholder in a huge business doesn’t change a business plan because some of the minor shareholders don’t like it.
So, what can I potentially change?
I think the first question is more fundamental – who can I potentially change?
I can’t change the idiots who would perversely rather see Newcastle lose every game this season, or enough games to fulfil their single minded obsession that the solution lies in Alan Pardew being sacked. Perhaps he will be sacked, but that’s not the point and it certainly isn’t the solution.
I can’t change the dullards who think, because we’re a ‘big club’, we should be competing with Manchester City in the transfer market and regularly spending £30m or more on a single player. Most of these clowns have the money-savvy intellect to privately think borrowing £100 off Wonga till payday makes good sense whilst publicly slagging them off for questionable business ethics.
I can’t change the delusionists who think success is defined as being the next Man U; winning the Premier League title, the Champions League and dominating club football for a decade or more.
There are certainly Newcastle fans out there who live in some sort of hate-fuelled fantasy world where logic has no place and dreams drive their perception of reality. But I don’t think these people are anything other than a radical minority or serial drunks with low emotional control.
There are a number Newcastle fans who start each season with perennial pint-pot-half-full optimism. I can’t change these people, but nor would I want to. You can guarantee they will come next Saturday, greet their fellow season ticket holders with a smile and sing their hearts out for the lads. In these core few will be a genuine belief that supporting Newcastle will bring them joy, happiness, entertainment, frustration and misery throughout the season to come, but their love for the club will not change, regardless of the measure of each.
So “who can I potentially change?”
I believe there is a large body of supporters, somewhere between the blindly optimistic and the angry dreamers.
These people, like me, may not be entirely happy with what’s going on behind the scenes, but genuinely want Newcastle to be successful next season. They measure success in terms of being in the mix for a cup final. They would be pleased to challenge for European football. They’d be content with being entertained and expectant that most teams would be dispatched at St James’ Park and we might edge one or more of the Manchesters, Chelsea, Liverpool and Arsenal in the home/away head to head. They’d be happy that one or two of our in-form stars would dismiss the attention of a ‘bigger club’ during the January transfer window, genuinely swearing allegiance to the black and white stripes. Some of us would even be content with 40 points by January and another ‘development season’ with a mid-table finish. I can’t, however, bring myself to subscribe to this latter point.
What can I potentially change?
In these people there already lies a belief. A belief that, by providing positive support to the team, they can help players raise their game. They might even subscribe to the notion that in closely competed games, the crowd can be the eponymous twelfth-man. They’ll certainly acknowledge that booing individuals or the team is unlikely to result in greater achievements – you won’t hear this type of genuine fan saying, “I’ve paid my money, I’m entitled to vent my opinion.”
Perhaps, and this is my wish, there are a few of those people who might read this article and reflect. Reflect on the already held belief that a positive start to the season might just be catalysed by a positive outlook and strong support from the fans. That a team half-full of new, inexperienced, nervous but talented international players might respond well to the famous Geordie welcome. That it might take half a dozen games for the team to gel. That siding with the anti-Pardew boo-boy faction the first time we concede a goal might not be the best response for the good of the team.
There’s even a crazy notion I’ll share with you. Might success on the pitch, even moderate but sustainable success, accelerate the point where Mike Ashley has an asset with greater value than this outlay? You never know, we, the fans, might by our positive support, engineer the quickest route to waving goodbye to the nemesis that is our current owner.
As I said before, no matter how much we rant and rave, Mike Ashley is from a breed of single minded businessmen who don’t bend to popular opinion.
There comes a time when you’ve just got to get behind the team.
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