Advertisement

Mike Ashley puts Newcastle up for sale, but can club be great again?

Mike Ashley puts Newcastle up for sale, but can club be great again?
From ESPN - October 21, 2017

Alan Shearer spoke for the Geordie nation when on Monday he tweeted "just heard" and posted a gif of the cast of Seinfeld doing a dance of celebration.

Newcastle United owner Mike Ashley's announcement that the club are up for sale was greeted with expectant, though cautious, delight in a city tired of the machinations of the Sports Direct billionaire, who bought the club from the late Freddy Shepherd in May 2007.

"Our intentions are to see if the club can be bought by new ownership, potentially by Christmas," said Andrew Henderson, a lawyer acting on Ashley's behalf, as the announcement was made.

A new owner at Christmas would make for a festive season to remember. Newcastle as a city has not lost its love for its club, with 50,000 fans filling St James' Park most weeks, but Ashley has damaged the romance.

Fans have become sick of the club being used as an advertising vehicle for Sports Direct. Some stay away, some remain, but the heyday of the mid-1990s, when Shearer, the best striker in English football, chose to sign for Newcastle over Manchester United, feels a long time ago.

A team back in the Premier League, doing well in ninth-place this season under adored manager Rafa Benitez, and now the prospect of a new owner to wipe away a decade of dissatisfaction? These are days when the Toon Army can dream. But can a deal happen, and what may lie in the future for Newcastle?

Why is Ashley selling now?

The truth is that Newcastle has been up for sale since at least the turn of the year, and throughout his ownership, Ashley has been open to a deal. As far back as 2008, he appointed investment bank Seymour Pierce to handle the sale of a club he bought from Shepherd and company for 134.4 million.

In a rare interview in August, Ashley hinted he had become tired of football's spiralling costs. "I do not have that ability to write a cheque for 200m," he said in reference to Neymar's recent 196m transfer to Paris Saint-Germain. "I would have to sell the Sports Direct shares to fund that."

Newcastle's summer net transfer spend was 11.5m, way behind fellow promoted clubs Huddersfield Town (32.5m) and Brighton & Hove Albion (42.8m). Ashley's policy of drawing profits from low expenditure is not suited to football, and has contributed to two relegations in 10 years.

Chelsea and Manchester City landed big-spending billionaires in Roman Abramovich and Sheikh Mansour, while Newcastle were taken over by a man who never wanted to lavish more money than necessary. The time for him to depart appears to have arrived.

Why buy Newcastle?

The prices currently quoted in multiple reports has Newcastle United's value somewhere between 300m and 400m, with the higher price being Ashley's target.

"The cost of 300m is prohibitive," Kieran Maguire, a lecturer in football finance at Liverpool University told ESPN FC. "I still think he needs to drop to 250m to get a fair price. I make it that Newcastle have a 20 percent chance of being relegated and if that happens, you lose a lot of money."

In August, 80 percent of Southampton, a club of similar scope, was sold to Chinese investor Jisheng Gao for 210m. Newcastle's buyer would not be purchasing a distressed asset, though the fact Ashley has kept costs down -- the wage bill is just seven percent higherthan when he bought the club -- presents some problems.

Advertisement

Continue reading at ESPN »