Mike Ashley told to find new Chairman – Parallel Lines
Mike Ashley is coming under ever increasing pressure to replace his failing Chairman.
The report by the Financial Times centres on Sports Direct but you could seamlessly apply this tale of woe to his ownership of Newcastle United as well.
Major investors in Sports Direct are looking in disbelief at the way the company is run, according to the Financial Times, who have spoken to a number of them.
The investors have seen the share price drop to less than half of it’s previous value in a matter of months and are calling for Mike Ashley to sack Chairman Keith Hellawell.
They believe that Ashley is abusing his 55% ownership which gives him effective control of Sports Direct (whereas at Newcastle United he has 100% ownership and control) and that he uses the company as his own personal plaything.
The FT quote one major shareholder:
“Sports Direct is a running sore in corporate governance terms. Mike Ashley acts like the chief executive. He thinks the company is his own plaything and does not want to play the game as a public company.”
There is a claimed lack of transparency in how the firm is run and that the compay is guaranteed to fail without major changes in personnel and in how Sports Direct operates.
Another investor compared Mike Ashley’s running of Sports Direct to his mismanagement at Newcastle United:
“I can’t see where the next leg of growth is coming from. Sports Direct is like Newcastle United football club. The group got into the top league, but then struggled.”
Tellingly, the investors believe that one of Mike Ashley’s biggest mistakes/failings is in not employing the best possible people to run Sports Direct, with Chairman Keith Hellawell (made his name as a policeman) having had no experience of working in sporting goods retail.
One of the SD investors telling the FT:
“It has become clear that the chairman lacks the skill to drive Sports Direct forward. Mike Ashley needs a strong chairman to challenge him.”
Like most people who buy football clubs, Mike Ashley hasn’t got a clue how to run one and has no interest or time to run it himself on a day to day basis.
Other big football clubs go out and employ the most talented and qualified people to run clubs on their behalf and give them the power to make big decisions to try and take their clubs forward.
However, the perception for pretty much all Newcastle fans is that instead, Mike Ashley has consistently refused to put in place a top management team to run Newcastle United on his behalf, nor has he given his representatives the power to make those big footballing decisions.
The consistent failure of Newcastle United in Mike Ashley’s ownership, under the watch of Derek Llambias and Lee Charnley, rubber stamps the fact that just like Sports Direct, Ashley needs to make massive changes to arrest the irresistible decline of both businesses.
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