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‘Premier League to stop Newcastle United Takeover? Like featherweight taking on Iron Mike Tyson’

2 years ago

The Newcastle United takeover is keenly awaited.

Currently, the process is now with the Premier League, with reports that this will take up to around four weeks for them to complete what they need to do.

So it looks like we will be set for an announcement any time between now and sometime early in May.

Here I have put together some thoughts on this impending takeover:

Don’t worry about the ‘fit and proper person’ tests

My background is originally in commercial law and (for the last 17 years) in business.

I wouldn’t pretend to have any particular expertise relating to high-finance football takeovers – but I suspect you can apply a lot of the basic principles which you will find operating elsewhere.

One of those rules-of-thumb is to be very, very careful before getting into a dispute with someone who has much deeper pockets than you.

Before things got to this stage the situation will have been gone through with a fine-toothed comb by battalions of lawyers whose hourly rates would make your eyes water. Any suggestion that the individuals involved in the Saudi sovereign investment fund weren’t fit-and-proper to own a Premier League football club would most likely lead to a blizzard of writs and a world of pain.

For the Premier League authorities to go there would be akin to a featherweight going toe-to-toe with Iron Mike Tyson in his prime and poking him in the eye. It won’t happen.

Willing seller and willing buyer

Another basic principle, is that for a transaction to go ahead you need a willing seller and a willing buyer.

Although NUFC has been ‘for sale’ for a long time, the suspicion many of us have had is that Mike Ashley was never a willing seller. He is now.
A few months back, The Mag asked me if I thought the team’s performance would make any difference to the chances of a sale. My view back then was that “I don’t think it’s what happens on the football field that will, eventually, lead Ashley to sell up and leave. I think he’ll sell, one day, because his other businesses are struggling and he needs to free up the money he has tied up in the club.”
And I think that’s what has happened. Sports Direct is part of Frasers Group plc. Mike Ashley owns 61.7% of the shares in Frasers Group. The company has 519 million shares. On 22nd January each of those shares was worth £5.18. At that price Mike Ashley’s shareholding was worth £1,658,755,140.

On 31st March those shares were worth £1.83 each. That values Mike Ashley’s holding at £586,008,090.

So, between 22nd January and 31st March he lost over £1 billion just on the fall in value of his Frasers Group shareholding.

Mike Ashley’s wealth isn’t sitting in the bank – it’s primarily tied up in the high street. The high street was a difficult enough business environment before the lockdown – and it looks even more perilous in the current situation. For a long time I don’t think he needed to free up the money he had tied up at NUFC – but I suspect he does now.

Steve Bruce wasn’t the most popular of appointments

His teams have played a dismal brand of football.

If you ask most Newcastle fans to list their top three, or top five, NUFC managers it’s probably fair to say that he wouldn’t figure in many people’s list. However his achievement (whether it be by luck or judgment) in cobbling together results this season, looks set to make his managerial tenure one of the most important we have seen – and he deserves our thanks for that.

We all look back with hindsight and pick out certain games or runs of games which proved to be pivotal. Most of the time those games were high-tension, high-excitement affairs. Home to Portsmouth and away to Leicester in 1992. Home to Man Utd and away to Liverpool in 1996. Games where the tension made you want to vomit.

We should add to that list of crucial fixtures the run of dull-as-ditchwater games last autumn when the team – without appearing to have a clue what they were about – managed to string together 20 points out of 11 games. Without those points this Newcastle United takeover probably wouldn’t be happening.

You need a willing seller and a willing buyer, and it’s been a problem for most of the last few seasons that any prospective buyer would be bound to be spooked by the prospect of relegation. Since we came back up there has not been an extended spell when the club was safe – and as a buyer would you be prepared to splash out hundreds of millions on an asset which might halve in value overnight with a drop into the Championship? No you wouldn’t – or at any rate not without covering your back by making a chunk of the purchase price conditional. Which Mike Ashley would never accept.

So for a sale to have a real fighting chance of getting through to the finishing line we always needed to get to a position where a prospective buyer could look at it and think, “OK, we’re safe for this year, and then that gives me a chance to put my mark on things in the summer and build from there.”

I don’t think Steve Bruce is in the same league as Rafa as a manager – but you have say that somehow-or-other he has managed to do what Rafa wasn’t able to do and get the club into a position of comfortable mid-table mediocrity with a big chunk of the season still to go. And without that it is a good deal less likely that this takeover would be going through.

But as Napoleon said: “I’d rather have a general who was lucky than one who was good.”

We shouldn’t expect miracles

The new owners will need to work within the Financial Fair Play framework, which limit the extent to which a club is able to be operated at a loss. So we probably can’t expect to see a front line of Messi and Ronaldo next season. But I think most NUFC fans won’t mind that over-much.

All that most of us have wanted was for our club to be given a chance to have a fair go and be able to punch its weight. Under Ashley it has been as if we have had lead in our boots and one hand tied behind our backs.

The new owners won’t just be able to open the sluice gates and pump money in, but hopefully they will be able to invest, and to build, and to give us a fighting chance once again.

Exciting times.


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