New­cas­tle United up for sale – but is Mike Ash­ley ask­ing too high a price?

The Guardian Australia - - Sport - David Conn

A guide to how swimmingly Mike Ash­ley’s sale of New­cas­tle United has been pro­ceed­ing is that he de­cided to broad­cast an ad­vert for it so pub­licly. The an­nounce­ment last Mon­day by the Sports Di­rect baron, owner of the north-east football in­sti­tu­tion for a tur­bu­lent and oc­ca­sion­ally hap­less decade, was the cor­po­rate equiv­a­lent of ham­mer­ing an es­tate agent’s sign into the pitch at St James’ Park.

In June, Ash­ley did not move to deny re­ports that a Chi­nese con­sor­tium was in­ter­ested in buy­ing the club, it­self taken as a public sig­nal that he wanted to sell. But noth­ing ap­pears to have come of that talk, so Ash­ley re­mained in place through a sum­mer trans­fer win­dow not marked by no­table en­thu­si­asm at his club hav­ing been pro­moted con­vinc­ingly back into the Pre­mier League. Ash­ley gave one of his rare, but more fre­quent, in­ter­views in early Au­gust, ex­plain­ing him­self as a bil­lion­aire in Sports Di­rect share price only, with­out the ready cash to fi­nance spend­ing on play­ers that could push New­cas­tle into com­pe­ti­tion with the mega-wealthy top clubs.

New­cas­tle spent £29m net, fi­nally, on play­ers, in­clud­ing Ja­cob Mur­phy from Nor­wich and Flo­rian Le­je­une from Eibar, while miss­ing out on big­ger and more pulse-quick­en­ing names. Now that Rafa Benítez has taken his team up to sixth, at least for 24 hours, with Satur­day’s win against Crys­tal Palace, Ash­ley has stuck his plac­ard up, des­per­ately seek­ing a buyer.

In­for­ma­tion was then re­leased that four par­ties, so far un­named, had signed non-dis­clo­sure agree­ments to in­spect the club’s prospects, and Ash­ley’s lawyer, An­drew Henderson of Den­tons, said: “A num­ber of ad­di­tional par­ties have come for­ward which we be­lieve to be cred­i­ble.”

Amanda Stave­ley, the Dubaibased man­ager of the PCP Cap­i­tal in­vest­ment fund, is now re­ported to have fol­lowed her ap­pear­ance at New­cas­tle’s home 1-1 draw with Liver­pool on 1 Oc­to­ber by sign­ing an NDA. Peo­ple work­ing with Stave­ley have sug­gested that she is gen­er­ally in­ter­ested in buy­ing a Pre­mier League club and in­creas­ingly taken with New­cas­tle’s at­trac­tions, but she is in the same po­si­tion as the “ad­di­tional par­ties”: hav­ing an ini­tial look, a long way yet from mak­ing a bid.

The pos­si­bil­ity of Chi­nese in­vestors is limited by gov­ern­ment re­stric­tions in China fol­low­ing the great rush that led to As­ton Villa, Birm­ing­ham City, Wolver­hamp­ton Wanderers and West Bromwich Al­bion be­ing bought last year. US sports in­vestors are still broadly in­ter­ested, with ma­jor stakes hav­ing been bought re­cently in Swansea, Crys­tal Palace, Bournemouth and Portsmouth, but they tend to look at mak­ing money by pay­ing an eco­nomic price for clubs that have a sig­nif­i­cant medium-term prospect of gain­ing in value.

From one per­spec­tive, New­cas­tle look like one of English football’s great prizes, as they did when Ash­ley bought them, seem­ingly on some­thing of a whim af­ter float­ing Sports Di­rect and first be­com­ing a pa­per bil­lion­aire in 2007. The club are sto­ried, as the Amer­i­cans say, four­times Football League cham­pi­ons be­tween 1905 and 1927, and now have a 52,000-seat re­de­vel­oped sta­dium, crammed with a pas­sion­ate Toon Army hun­gry for good times to re­turn.

Yet those same at­tributes also add up to a great deal of money an in­vestor would have to pay. Ash­ley is ap­par­ently look­ing for be­tween £350m and £400m just to buy the club, with­out fac­tor­ing in any spend­ing for Benítez, which would have to be a sig­nif­i­cant sum or risk stag­na­tion and fur­ther alien­ation of the sup­port­ers.

Ash­ley is sig­nalling that he would ac­cept the money in in­stal­ments to get a deal – but it would still be a sig­nif­i­cant profit. He paid £134m for the club, prin­ci­pally to Sir John Hall, who was a will­ing seller, him­self mak­ing a huge profit on own­ing New­cas­tle shares into the Pre­mier League era, and the late Freddy Shep­herd, who was not happy to sell and would have liked to re­main in­volved.

Ash­ley found that Shep­herd and Hall’s regime, while suc­cess­fully re­de­vel­op­ing St James’ Park, had nev­er­the­less bor­rowed sig­nif­i­cantly to try to keep up with the es­ca­lat­ing spend­ing on play­ers and wages by other clubs, and Ash­ley has loaned £129m, in­ter­est free, to clear that debt. His loy­al­ists feel that he has not been given much credit for that, or for the club’s ef­fi­cient fi­nan­cial run­ning, and that he has taken noth­ing out, un­like the Halls and Shep­herds, who pock­eted huge money in salaries and div­i­dends even be­fore cash­ing in might­ily by sell­ing to Ash­ley.

Nev­er­the­less, £380m, if that is what Ash­ley is look­ing for, would be a gain of £117m on the £263m out­lay on the club and loans. Ash­ley has said that when he floated Sports Di­rect, which he wheeled and dealed to high-street dom­i­nance with re­lent­less cost-con­trol in­clud­ing wide­spread use of ze­ro­hours con­tracts, he did not know what to do with his new for­tune. His early drink­ing and sit­ting with sup­port­ers, and the col­lec­tion of friends and as­so­ci­ates run­ning the club, sug­gested he bought the club for rich man’s fun, but Kevin Kee­gan’s ex­as­per­ated walk­out in 2008, rel­e­ga­tion the fol­low­ing sea­son and a bit­ter back­lash drained the joy out of it.

When he put the club up for sale in 2009 there were no tak­ers, so he was said to have de­cided to do his best with it, this time treat­ing it as a busi­ness like all the other brands in his Sports Di­rect ag­glom­er­a­tion.

New­cas­tle had seemed to hit on a win­ning for­mula in 2011-12, sign­ing ex­cel­lent play­ers from France for good value, and a richly tal­ented, ex­cit­ing team fin­ished fifth that sea­son un­der Alan Pardew. Yet even that brief high­light of the Ash­ley era now has a taint hang­ing over it, sub­ject to a crim­i­nal in­ves­ti­ga­tion by HMRC, al­leg­ing sys­tem­atic tax fraud. In a judg­ment this month re­ject­ing New­cas­tle’s ob­jec­tion to HMRC’s raid on the club in April, the high court con­firmed that the sign­ings of Demba Ba, Syl­vain Marveaux, Moussa Sis­soko, Da­vide San­ton and Papiss Cissé are all un­der in­ves­ti­ga­tion, and out­lined that the Ba in­quiry con­cerns £1.9m paid to an agent, Si­mon Stain­rod, which was then passed on to other par­ties.

Ash­ley fes­tooned St James’ Park with bill­boards for Sports Di­rect, and the club signed a widely crit­i­cised shirt spon­sor­ship deal with Wonga, even be­fore an­other rel­e­ga­tion, in 2016, ce­mented his un­pop­u­lar­ity with sup­port­ers.

Now, hav­ing him­self ex­plained and il­lus­trated the lim­i­ta­tions of New­cas­tle’s po­ten­tial com­pared to the rich­est clubs, Ash­ley is hop­ing that some­body will pay him the big fee and take it all on.

Amanda Stave­ley (cen­tre), who heads the PCP Cap­i­tal in­vest­ment fund, was in the crowd at St James’ Park for New­cas­tle’s 1-1 draw against Liver­pool in the Pre­mier League this month.

Mike Ash­ley bought New­cas­tle for £134m in 2007 and has pro­vided the club with £129m in in­ter­est-free loans.

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