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Just because Sir Jim Ratcliffe says no, doesn’t make Newcastle United a bad buy

4 years ago

The richest man in Britain, Sir Jim Ratcliffe, has been explaining why he didn’t buy Newcastle United this summer.

He admits to looking at Newcastle amongst a number of other English clubs, such as Man Utd, Chelsea and even Leeds in the Championship.

However, for him it always comes back to the same thing.

Sir Jim Ratcliffe calling it ‘dumb money’ if buying English/Premier League clubs at current valuations. His brother Bob said something very similar (see below) in the summer.

In other words, he doesn’t see value for money.

Instead he has bought Ligue 1 club Nice for under £100m this summer and says it is: ‘Potentially a cheap ticket into the Champions League compared with England, if it goes to plan.’

Just because somebody is very wealthy, doesn’t mean they are going to throw money about with no worries about getting a return on it. Sir Jim Ratcliffe is reputed to be worth £20bn but happily declares: ‘We don’t like squandering money or we wouldn’t be where we are today. It’s part of our DNA, trying to spend sensibly.’

However, just because Sir Jim Ratcliffe says no, doesn’t make Newcastle United a bad buy.

If Mike Ashley was prepared to sell NUFC at a fair market price, then to me there is no doubt that there are countless ways in which the club can generate far more money and long-term, deliver both success on the pitch and benefits and/or profit to an investor.

Initial investment would be needed to improve things both on and off the pitch at Newcastle United but it is a club with a massive fanbase, where at the minute supporters are looking to spend as little as possible to put money on Mike Ashley’s pocket.

With ambitious new owners, fans would back them with a passion.

Sir Jim Ratcliffe talking to The Times:

Sir Jim Ratcliffe has the riches to buy any British club including Manchester United, the team he supported as a boy, and he has cast his eye over quite a few in the top divisions. “You might be surprised how many are happy to have a conversation,” he says.

Britain’s richest man toured Chelsea with a view to a potential purchase; examined Newcastle United’s potential stadium growth (not great); and cast an eye over Leeds United, among many other English clubs.

Yet it is at a training ground in France, at Nice, where the petrochemicals billionaire sits down to talk about becoming an owner in a major European league and why he is an increasingly significant figure in the world of sport.

Ratcliffe, 67, is not ruling out buying a Premier League team but there is a simple reason why he has taken the plunge in France, which perhaps explains how he became worth a reputed £20 billion in the first place.

“Ineos [his multinational chemicals company] never wants to be the dumb money in town, never, never,” he says over coffee, happily setting aside his usual mistrust of the media for as long as the conversation is around sporting passions rather than, say, the rights and wrongs of fracking.

Dumb money? He feared he might become exactly that if he dived into buy, say, Chelsea, where he had a tour of the Cobham training ground before preliminary discussions revealed a huge differential between what Roman Abramovich would want — believed to be north of £3 billion — and what Ratcliffe was prepared to pay.

How about United, assuming the Glazers were willing to sell? “Not at the moment, no,” he says. “They are in quite a big pickle as a business. They haven’t got the manager selection right, haven’t bought well. They have been the dumb money, which you see with players like Fred.”

“So you quickly get into some pretty stratospheric numbers,” he says. “And even though clubs have those valuations today, nobody has ever paid those amounts of money. How much did Abramovich pay for Chelsea, £100 million? The Glazers [at United], what £500 million? You can say it’s worth three, four billion but no one has ever paid those sums.

“Ineos has always tried to take a sensible approach. We don’t like squandering money or we wouldn’t be where we are today. It’s part of our DNA, trying to spend sensibly.”

“We won’t look elsewhere until we have had a good run here (at Nice),” Ratcliffe says. “We need to find out how to be successful before you ever want to write a big cheque. It’s quite difficult. United have spent an immense amount since Ferguson left and been poor, to put it mildly. Shockingly poor, to be honest.

“We have a different approach here to be moderately intelligent about it. Try to do it more grass roots, trying to locate young talent. Some clubs seem to have an ability to do that, Southampton, Lille. United have done it really poorly. They have lost the plot there somehow. But figuring that out takes time.”

“In those terms, it’s a very rational decision to come to Nice,” he says. “We also have a bit of a base here, and the cycling team here. It’s invest for success, invest wisely for success. We haven’t bought Nice to make money, that’s clear. If we want to make money we’ll do that in chemicals — not football.”

The Mag – 8 September 2019:

As well as the alleged BZG attempt to buy Newcastle United this summer, interest was claimed from other potential buyers, including Jim Ratcliffe.

One of the richest people in England, Jim Ratcliffe founded chemicals giant Ineos in the late 90s and remains it’s biggest shareholder.

In later years he has diversified into other business interests, including sport.

Ratcliffe took over cycling’s Team Sky in May and also invested £110m in Britain’s America’s Cup sailing team in 2018.

His first move into football was in November 2017 when buying FC Lausanne-Sport.

They were a Swiss second tier club back then and two seasons later they are still in that same division (although they are the early leaders this season in the second tier). Just because you have a lot of money, it doesn’t mean you automatically throw a load of cash at any new business asset, whether it is a football cub or not. So far, FC Lausanne-Sport are yet to spend £1m on any player since being bought by Ratcliffe and indeed this summer only free transfer signings were brought in

Late August saw Jim Ratcliffe eventually buy Ligue 1 club Nice for around £90m after a long period of negotiations. That did see a belated spend on players, with eventually around £50m spent in the summer window, a net spend of around £30m with Allana Saint-Maximin accounting for most of the cash brought in.

In a new interview with BBC Sport, Bob Ratcliffe (brother of Jim) who heads up the Ineos Football Division of the business, has explained why they didn’t buy Newcastle United.

Bob Ratcliffe saying: ‘People talked to us about Newcastle but, again, you come back to a valuation in the 100s of millions and it’s very difficult to contemplate.’

He says that they ‘Spent quite a lot of time looking at Premier League clubs’ but that the valuations of Newcastle United and indeed any oter Premier League club makes it ‘pretty difficult to rationalise’ buying any of them.

Unfortunately for Newcastle fans it is a double whammy because due to all the benefits he get from owning Newcastle United, it appears very difficult (impossible?) for Mike Ashley to ‘rationalise’ selling NUFC. Whilst they remain a Premier League club anyway…

BBC Sport report:

Ineos did not buy a Premier League club because it was “difficult to rationalise”, says Bob Ratcliffe, the head of its football division.

His brother, British billionaire Sir Jim Ratcliffe, founded the chemical company which bought French top-flight club Nice in the summer.

Ineos has previously been linked with buying Chelsea from Roman Abramovich.

“We spent quite a lot of time looking at Premier League clubs,” Bob Ratcliffe told BBC Radio 5 Live’s Sportsweek.

He said the company “looked at the valuations” but added that it was “pretty difficult to rationalise purchases in the Premier League at this time for us”.

In 2017, Sir Jim Ratcliffe, who is Britain’s third richest man, bought football club FC Lausanne-Sport, who play in the Swiss second tier.

He took over and rebranded cycling’s Team Sky in May and also invested £110m in Britain’s America’s Cup sailing team last year.

Bob Ratcliffe said “there was some exchange” with Chelsea but added that the company and the club were “a long way apart on valuation”.

He added: “After the noise around Chelsea there was a high proportion of clubs that people talked to us about.

“People talked to us about Newcastle but, again, you come back to a valuation in the 100s of millions and it’s very difficult to contemplate.”


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