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Further proof why Mike Ashley isn’t leaving Newcastle United

7 years ago

Many Newcastle fans hoped that Mike Ashley was signalling a more ambitious future for Newcastle United when he had his say in public on the final match day of last season.

However, when the club owner said he was going nowhere until Newcastle won a trophy or qualified for the Champions League, I took it as a threat rather any reason for rejoicing.

Personally, I thought his reason for saying what he did on the day of the West Ham match was to get the message across to Newcastle fans that resistance was futile.

He, Mike Ashley, wasn’t going to leave whether fans went to matches or not, the club owner telling fans if they were going to boycott then they were only hurting themselves, because he would continue to own Newcastle United no matter how many stayed away.

After today’s action I think we can see exactly why Mike Ashley will be at NUFC for the foreseeable.

When I say action I don’t of course mean any investment in the transfer market, rather the action at the London Stock Exchange.

A very positive note from broker RBC Capital Markets helped put  Sports Direct in the top spot on the FTSE 100 earlier today.

The broker upgraded their prediction on Sports Direct stock to ‘outperform’ and have raised the target price of the shares to 800p from 650p.

This led to the shares going up in value by 3.2% just on today’s trading, increasing by 22.5p to 725p, this represents an increase in the value of Mike Ashley’s shareholding in SD by apporoximately £65m.

Mike Ashley and his retail empire are seeing their overseas operation getting ever stronger and RBC predict it to represent 20% of the total sales, saying

“International sales should represent a long term opportunity for Sports Direct given most markets are fairly fragmented with many independents or chains overly reliant on big brands.”

As well as growing sales abroad year on year and spreading into more and more countries, Ashley’s empire has also benefitted from the Tories winning the election, reducing the threat of significant action on the use of zero hours contracts. A new ‘click and collect’ option has also proven very popular with online customers.

RBC also stated:

“We also think Sports Direct looks better value now versus its peer group, particularly other sports chains and global peers.”

With the massive benefits Mike Ashley’s retail empire gets for free from Newcastle United, why on earth would the club owner sell off his golden goose?

When buying Newcastle United, Mike Ashley’s people told John Hall that he was buying the club to promote his retail empire around the world and this has indeed worked to an unbelievable degree.

Plus with the Premier League deal seeing English football being seen by an ever increasing Worldwide TV audience, it will only help to push further Mike Ashley’s overseas expansion plans for his retail empire.

Only a small handful of clubs featured live on TV more than Newcastle United’s 19 appearances, more than clubs such as Tottenham, Everton and every other club outside the ‘elite’.

If Sports Direct reach that target price of 800p per share, then it could represent (in a very short space of time) an increase in the value of Mike Ashley’s SD shareholding over and above what any normal valuation of Newcastle United would be.

Again, why would Mike Ashley sell off his golden goose that is so vital to helping his retail empire grow and grow and grow, both at home and around the world?

You have been warned!

Only the sight of a significant number of empty seats could possibly make Mike Ashley think twice (in my opinion), as having his adverts beamed to a worldwide audience with a background of row after wor of empty seats can then devalue the brand message, connecting it to failure. That is of course failure to find fans willing to fill the seats to give him the crowd shot he desperately needs for the TV viewers, not trophy success which to me is pretty much immaterial to Ashley.


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