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Tyne Talk

Reasons why Mike Ashley hasn’t sold Newcastle United contained in special Bloomberg report

5 months ago
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It is now 72 days since Mike Ashley popped up on our TV screens to tell Newcastle fans that a sale of the football club was now imminent, that ‘hopefully’ a sale would even be completed within four weeks (by the end of December 2018).

It is 11 years since Mike Ashley told Newcastle fans that they should stop their protests after he forced Kevin Keegan out, informing that they didn’t need to worry because he was selling the club as soon as possible.

So why in February 2019 is he still here?

Many/most Newcastle fans doubt whether there has ever been any intention by Mike Ashley to sell Newcastle United, believing that the benefits are far too great for his business empire overall, for the Sports Direct supremo to ever consider selling.

The only possibility appearing to be if somebody offers far more than the football club is actually worth, which simply isn’t going to happen.

A special report from Bloomberg, who special in finance/business reporting, has thrown some extra light on the darkness that surrounds Ashley’s ongoing ownership and non-sale of NUFC.

They have looked at the last 30+ business deals that Mike Ashley has completed and revealed that only two of them were ‘divestitures’, in other words, sales. Bloomberg describe him as a ‘serial purchaser’ and one who is very difficult to deal with when it comes to trying to do deals, where Ashley is the seller.

Bloomberg state they talked to two people who had been involved in attempting to do business with Ashley as buyers [not necessarily of Newcastle United] and they told them ‘he’s tricky to negotiate with, mainly because he’s suspicious about the terms of the offers.’

They quote Clive Black, director and head of research at Shore Capital, and maybe he has the most telling line… ‘when it comes to selling he seems to have difficulty letting go and has prices in his head that he won’t go below.’

So basically, it backs up everything Newcastle fans have come to understand/accept about Mike Ashley. It is his way or no way. Rather than being prepared to negotiate he expects everybody else to simply fall into line with him. No wonder he has only managed to complete two sales out of his last 30+ business deals.

It fits in with the transfer policy that his people made very public years ago, that once they made an offer for a player the other clubs had to understand that Mike Ashley wouldn’t go any higher than that first offer. Whether anything has changed in that respect is dubious…whilst Miguel Almiron is a signing that has lifted the spirits, Rafa Benitez wanted him signed on the first day of the January transfer window and not the last, the deal apparently wasn’t going to happen until Atlanta United stepped down from their valuation.

It says everything about the joke of a way that Newcastle United is ran, that when Bloomberg approached Newcastle United about this report, they were told to go and speak to the Sports Direct media team, who then ‘declined to comment.’

As for Peter Kenyon, the report says that they also had an inside track on that and their source told them that if indeed they had convinced Mike Ashley to sell, the purchase would have been funded by funds from American investors as well as debt. Not exactly sounding inspirational for most Newcastle fans who understand just how much work is needed to be done in terms of investment in the whole infrastructure (St James Park, training complex, Academy etc), never mind the actual first team playing  squad. Nevertheless, not many/any would choose the status quo and would be prepared to give any alternative a chance.

The fact that the latest Deloitte ‘rich list’ showed that only 18 clubs in the world generated more revenue than Newcastle United, despite Mike Ashley’s negligent and unambitious running of the club, points to the fact that the club should be doing so much better even without any outside investment.

Short extracts from the special Bloomberg report:

‘Another season and another sale withers on the vine for one of the last big clubs up for grabs in the world’s richest soccer league. But the difficulty in closing a deal for Newcastle United might say more about the billionaire retailer who owns it than the asset itself.

Would-be buyers say he’s tricky to negotiate with, mainly because he’s suspicious about the terms of the offers, according to two people involved in potential purchases over the past couple of years. They declined to be identified because of the confidentiality of the negotiations.

“He’s very single-minded and an aggressive buyer of business assets, not all of which have succeeded,” said Clive Black, director and head of research at Shore Capital. “But when it comes to selling he seems to have difficulty letting go and has prices in his head that he won’t go below.

“Selling a football club can be immensely tricky,” said Trevor Watkins, a sports lawyer at Pinsent Masons LLP. “A buyer’s sentiment is also impacted by performance, with the possibility of a Premier League team being in danger of dropping into the Championship, at the very least affecting the value put on a club and as a consequence the structure of any deal and how and when monies are paid.”

Over the past few months, a potential buyer has been the former Manchester United and Chelsea commercial executive Peter Kenyon, according to a person familiar with the situation. The bid was backed by American funds and debt, said the person, who didn’t want to be identified because the information is confidential. Kenyon declined to comment.

To read the full Bloomberg article go here.

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