Summer activity is about to take shape at Newcastle, with the hope that signings will be on the horizon after the announcement of chief scout Graham Carr’s departure earlier this week. Talk of a takeover still looms over the club though, and with a world class manager finally in place, any uncertainty would be coming at an unwelcome time. Media reports, if believed, state that Newcastle could very well see investment rather than a full takeover of the club from current owner Mike Ashley. How would this work in reality?
A partial investment
One option would be for a consortium to invest into Newcastle and purchase something like a 10-20% stake in the club. Ashley apparently values the club at £400m, which is one the factors that is holding up a full sale. Taking these numbers as ball park figures, this would equate to £40-80m coming into the club for a smaller stake in ownership.
This is similar to the agreement Manchester city with Chinese consortium, CMC, last year. They purchased a 13% stake for an eye watering £265m. Of course City is a more valuable financial proposition for investors. than NUFC. An interesting angle is that Manchester City is already owned by billionaires who have no desire to sell the club currently. So why sell a stake? Quite simply, for mutual financial benefit. The owners felt the Chinese market had a lot of untapped potential for them, as despite overtaking Manchester United on the pitch, commercially, they remain behind. A partnership can give you contacts and new sponsorship deals in a new region.
Something similar may be being discussed with Newcastle. Chinese investors have been linked with Newcastle and it appears an unlikely coincidence we have also just announced our commercial sponsorship partnership with Chinese firm FUN88. Ashley may well be discussing a similar deal to that of Manchester City behind the scenes. This would mean investment in the club for new players potentially, whilst ensuring little day to day change. Purchasing this smaller percentage from Ashley would mean all major decisions, like hiring managers and overall budgets, would still firmly rest with him.
Buying a major stake
Another investment option would be for a group to purchase a far larger stake, something that would certainly have greater ramifications on how the club is run day to day. A comparable example to this would be the situation at Everton, with billionaire Farhad Moshiri buying a 49.9% stake in the club in early 2016. It was notably just under the 51% to be the majority owner but a high enough stake that he has assumed major responsibilities away from Bill Kenwright.
By all accounts, this has provided Everton with real financial muscle. Lukaku was signed for £28m with a further spending due on the cards this summer.Of course, not all owners will invest so much in new players as Newcastle fans of course know. However, it does represent an example that if Ashley was to sell a stake of this level it would mean a change in the running of the club and significant power sitting with any potential investors. The higher the percentage bought from Ashley, the more vital the intentions of investors is.
What do investors want in return?
It is important to consider that the goal of investments is to make a return or profit on your initial outlay. Owners can buy clubs with the idea of improving the club and not necessarily making any money from it (Man City and Chelsea are clear examples.) So if someone wanted to buy Newcastle and turn them into a superpower with the clubs interests solely at heart, they would probably attempt to buy the club outright.
Investors will likely see the new TV deal as a chance to grow their own business by having an association with Newcastle United. Of course it is in their interests the club does well, as success on the pitch leads to higher prize money and a better brand. But depending on the deal struck with Ashley, investors taking a smaller stake may want a cut of profits, a percentage of sales in a new market, such as China, or reassurances when they will get their investment back – with interest, at a set date.
Do timescales differ from a full takeover?
A full takeover certainly takes longer. This is due to having to pass fit and proper owner tests from the Premier league and also a more detailed process of due diligence over the clubs books. Investment would theoretically be sorted at a quicker rate and more importantly, should not impact on player trading this summer. Unless it raises capital for new players, which would be great news.
Until more details emerge, you do get the feeling the talk of a takeover or investment is a case or de ja vu. Ashley bought Newcastle over 10 years ago and he seems now, more than ever, to be learning from his mistakes. It would take a deal to line his pockets significantly, either to sell the club or just a chunk of it, for things to change.
Nice write up Simon.
However, I have no interest in all this financial speculation. Ashleys a real wild card. He does what he thinks best for Ashley and very often gets it wrong (Kinnear, Pardew, Llambias) so we’ll see . . .or not.
Meanwhile, it’s bloody time we had some signings in that will make a difference how next season goes!
georgio(Quote)
Georgio we are still a championship side with a world class manager. Astu in for 6.4 million and Thuavin out for 10 million. 3.6 million profit so far. Nothing to suggest Ashley has changed one bit. Now take over talks and Ashley’s willing to listen to offers. Sounds like a whole lot of bull until proven otherwise.
Stem(Quote)
Truth is Ashley is greedy. How is the club worth 400 million when he paid a lot less than that for it. Now forgive me if I’m wrong but he has hardly spent a penny on players since his been here so thats not a excuse.
Stem(Quote)
Simon I wouldn’t get your hopes up on a take over just yet.
Stem(Quote)
Eric I do miss Troys Y.C.M.I.U and mock my words rants.
Stem(Quote)
I hope Tony Adam’s buys Sunderland and hires Pardew with Carver as his assistant.
Stem(Quote)
Stem: not in the least. I was proved right. Pardew and Ugly John were sacked and Lee Clark manages Bury.
Eric Sykes(Quote)
Carr could even buy players for a profit.
Stem(Quote)
If that happened I would **** myself laughing.
Stem(Quote)
Also, The Troysta was mildly entertaining. A nutter, but not a bad guy.
Eric Sykes(Quote)
Thought with the new season coming up I would change my blog name to something more optimistic as opposed to the pessimistic sounding Groucho. Hope the optimism proves to be well founded.
Smiley(Quote)
Stem, again. This site was better with Troy than without him. He wound up the Aussies, which is always a good thing.
Eric Sykes(Quote)
Eric I know you were right mate but it was good banta all the same 😀 Troy was definitely fighting a lost cause with those 3 candidates.
Stem(Quote)
Sanity Clause. There ain’t no Sanity Clause.
Eric Sykes(Quote)
That was for you – the former Groucho.
Eric Sykes(Quote)
I hope his alright and comes back the second Pardew gets the Sunderland job
Stem(Quote)
Troy Stavers also said England would win the Euros, then said they would actually finish second and then they were knocked out by a country with a population of 330,000 and whose main export is cod.
Eric Sykes(Quote)
But, I live in a country with a giant mango headed man in a toupee as President so what do I know!
Eric Sykes(Quote)
Sorry, a man with a giant mango head.
Eric Sykes(Quote)
Fake news Eric! Loser.
georgio(Quote)
Has anybody seen Lord Lucan or JonBenet Ramsey recently? If you have you can reach on facebook or twitter at:
WhothefuckandwherethefuckisCurtisGood.com
Eric Sykes(Quote)
Simon, Thanks, nice article and one worth discussing. For me this take over /investment stuff is doing nothing but getting in the way of us bringing players in. A couple of press guys have now said the fact this is a possibility is thought to be affecting in coming players. I suspected it would and a part of me wonders if the leak to the press about it has been done deliberately to derail moves or slow things down. It’s the cynical sort of move Jabba would do to get out of spending . I just don’t trust the guy one iota . Let’s face it the selling of his Rangers shares came out the blue which is how he normally works. I just don’t feel he would let it be known the club can be bought without an ulterior motive behind it.
kimtoon(Quote)
So will Hughes to Watford was £4.5m rising to £7m. Where the hell were we on the one?. That’s a bargain imo
Sharpy17(Quote)
where are we on any come to that, pre season kicks off in 9 days ! Atsu doesn’t count as he was already here albeit on loan. And Lejeune will soon be Lejuly the way things are progressing 🙄
kimtoon(Quote)
Kim – I’m not gonna lie, it’s pissing me off a bit now like coz there’s big changes needed and the sooner the better for these upgrades to settle in – especially if they are coming from a foreign league with little or no experience of English football.
Sharpy17(Quote)
With regards to the article I could see Ashley saying to potential investor – the clubs worth £400m & the debt is £130m. If you want 10% of the club – you clear 10% of the debt as well.
Sharpy17(Quote)
Aarons and Curtis Good will be like new signings. And Timmy-the-hoof.
Eric Sykes(Quote)
Sharpy: my guess is that Ashley’s 400 million figure is the gross amount and that net of debt he values NUFC as about 270. That would still give him a profit if he was able to sell at that amount.
Eric Sykes(Quote)
So, there are no takers for Wayne. He was a spent force when Mr. Roy let him run the team at the Euros last year. Remember he said he would consider his future after the Russia World Cup. I am going to consider my future from the same place as Rooney, from a couch or a barstool.
Eric Sykes(Quote)
maybe his wages are putting clubs off
kimtoon(Quote)
Really Kimtoon? I have heard that if Wayne was paid in pies then end to end they would stretch 3 times around the world. That’s Greggs’ mince pies. Of course, that would be less if they were Melton Mowbray pork pies where the estimate is only twice around the world.
Do you know they have a Melton Mobray pork pie museum?
Eric Sykes(Quote)
And since I am on the subject of museums… they used to have a bagpipe museum at the keep of the castle in Newcastle. I went, because I wanted to see what they could possibly have that was interesting in a bagpipe museum. Apparently, bagpipes!
Eric Sykes(Quote)
And you can tell there is no NUFC news when I am talking about pork pies and bagpipes. C’mon Rafa, sign someone and put me out of my misery.
Eric Sykes(Quote)
Eric, He’s picking up £300k a week ! can’t see him dropping to a realistic level . I don’t rate him at all but he would likely be wanted somewhere but for his wage demands.
kimtoon(Quote)
Mark DouglasVerified account
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Rafa is frustrated at lack of #nufc transfer progress. But still making plans for the future. Sunday Sun line:
I bet he is, hopefully now Carr not there things can progress a bit.
kimtoon(Quote)
The lack of signings seems to be getting to everybody but I don’t believe for a second that Rafa is unsettled by it all. He’ll know exactly what’s going on. I also don’t believe that new investors or club sale is holding things up or that Charley at Ashleys command is holding things up.
What I do believe is that the 16/17 financial year ends on June 30th. That 17/18 is the year when we get the huge sums for being in the PL. That is the time to spend heavily on transfers. These sums would all come off what otherwise would be a massive tax bill. That’s what I think. By spending from July 1st the club, compared to June, could save a massive £25-35m off taxation. It’s very possible that most of Rafas deals have already been done/agreed but won’t be completed till July 1st. Lejeune is certainly one of them.
georgio(Quote)
I’m not sure I can listen to another bout of mischief making regarding Rafa being unsettled like ??♂️
I have been on saying it’s concerning we haven’t signed anyone, and don’t even seem to be at the latter stages of signing someone – that doesn’t mean I fear Rafa will leave.
What has the bloke got to do to convince people he’s committed?!?!?!?!?!!!!.
I’m sure he would have liked people in before now like all of us. But that doesn’t mean the toys are out the pram and he’s off!!. And anyone who thinks Rafa is that kind of manager is being disrespectful IMO
Sharpy17(Quote)
What’s more likely is that the newspapers are getting frustrated at the lack of something relevant to say.
Brisvegas(Quote)
Would help if we didn’t have such a devious owner tbf
kimtoon(Quote)
Kim – we all think that. But we all always think Rafa is the dogs.
But Rafa has stayed through a relegation, a January window of no signings and has further voiced his commitment to the club this summer.
Yet these clowns write, Rafa isn’t happy and might leave and some people jump all over it blaming Ashley and the club fucking Rafa about.
IF Rafa were to come out and say he was getting frustrated or worse still he left, then I would get worried or kick off. But is just bullshit stories and we shouldn’t be critical of them, not listening to them!!.
Sharpy17(Quote)
Sharpy, Rafa has not gone on holiday, instead staying at club to get things going nice and early, meanwhile Penfold is over in China, most likely looking for investors so mike don’t have to dig deep.
It’s interesting that Mark Douglas has reported he’s not very pleased with slow progress of transfers and he’s been working with Rafa on that Rafalution book he’s just released.
I don’t think Rafa is anywhere near walking out on us but I do think he’ll be unhappy at lack of progress.
kimtoon(Quote)
Kim – where have you read Charnley is in China?. I thought Ashley had brought that other fella in to oversee any invest or buy out business (can’t remember his name now).
To be fair, Douglas is hardly breaking news by saying Rafa is frustrated. If the fans are, then he must be – that ain’t news really.
But there again, I bet Pepe, Conte, Wenger and all the rest are also frustrated. I’m sure every manager wants there ducks in a row ASAP.
I’m not having a pop at Douglas stating the bleeding obvious. It’s these tools who are saying Rafas ready to walk.
Sharpy17(Quote)
Sharpy , it’s in the chronicle
http://www.chroniclelive.co.uk/sport/football/football-news/rafa-benitez-becoming-frustrated-hoping-13235564
about lee going to China
kimtoon(Quote)
Sharpy, I feel the difference between those other managers and Rafa is their respective clubs positions. They are established top PL sides who are to a degree already to go in the coming season, they just need a face or two to challenge if you like. We on the other hand need around 6 if not more quality players in to even begin to think we can stay in the PL. So in my opinion our need to get on with it is greater than theirs.
kimtoon(Quote)
Still think I’m right about July and the tax situation but it’s undoubtedly true that football journalists with absolutely nothing to write about are dredging up any old rubbish they can think of.
georgio(Quote)
Kim – I used those managers in particular because of their different position to Rafa – those managers have a bottomless pit of cash, yet their signs have been few as well. They are new managers at their clubs and whilst you would think they are 1 or 2 signs away, I bet they want their own players in – and that will be more than 1 or 2 for sure.
Them getting their players in, will probably make our targets more available – as we will likely be looking at the players they are ready to let go.
Charnley may have had a trip to China, but I don’t believe the guy has been or is over there for weeks on end. He may have gone out and set an agent away looking at investment as a contact out there, but he won’t be doing it all himself.
As I say, I accept there will be frustration, but talk of Rafa leaving is just mischief making.
Sharpy17(Quote)
Sharpy, I don’t think he’ll leave.
Georgio, the tax point is quite possibly right
kimtoon(Quote)
Thanks Kim – I’m pretty sure about it and we’ll see just next week.
I don’t think there’s any chance of Rafa walking away. He supposedly hasn’t had a holiday but he’s only had sporadic trips to SJP and has enjoyed most of the summer with his family on the Wirral. He will though have a very hot phone!
georgio(Quote)
Maybe he went to China to sign a player – there are plenty of them there.
Brisvegas(Quote)
Rafa has been pissed off for a couple of weeks. He’s had four signings all lined up but for some reason the club aren’t getting them done. This is a risky strategy from Ashley. If it’s due to the same of the club then it’s a silly thing to do as if Rafa goes his club is worth a lot less.
Stuart79(Quote)
Yes very true.
kimtoon(Quote)
Guys, don’t be surprised if Rafa really announce leaving. This time he just gave a warning to Ashley, hoping Ashley can really back him up in the transfer market. If Ashley still the same, he will leave, I think. Because first, seriously there is no way we can compete in PL without significant squad strengthening. second, if he said he will leave if the club does not back him up but turns out he still stays, next time nobody will take his words seriously. So personally I think his leaving is quite possible. Now the ball is with Ashley.
funrafa(Quote)
Nah
Sharpy17(Quote)
Haha .. Can’t remember the last t time newspapers had anything relevant say about anything esp the particular rag that’s stirring
GlosMag(Quote)
i can see why Rafa is getting fed up,hoots breaks club record fee to sign play (that two players signed),hudders break club record fee to sign player,Rafa has been waiting four weeks to sign that C/H,mind club have thrown Rafa a crump by signing Atu ffs
icedog(Quote)
Atsu
icedog(Quote)
Ice – to be fair and to put it into context – Brighton have broke their transfer record spending £6m on a goal keeper.
Huddersfield have spent £3.5m on a CF I’ve certainly never heard of. They are looking to spend £10m to make Mooy move permanent – good ambition by them, but when he was suggested on here for us, nee one wanted him.
I think in terms of Rafa frustration, it isn’t at Ashley – he’s already said Rafa can have all the profit of promotion & any money from player sales – can’t say fairer than that. I think it’s more the asking prices of players he’s been looking at – Gibbs at £15m (we probably expected half that with 1 year left on his contract), Cairney at £20m, McCarthy at £20m – theres £55m before you even consider forwards & widemen. These kinds of fees will make short work of his kitty. No way Rafa can strengthen the way he wants to with the fees going round & budget he has – hence the club looking for investors/buyers.
Sharpy17(Quote)
and you trust Jabba?? better you than me hes proved many times hes a ratbag mate
icedog(Quote)
Ice – he has mate. But whether people choose to see it or not, he hasn’t been all bad.
He came out and give his speech about horses & carts or whatever he said. He said he would be investing money the following season & that the running of the club would be left to Charnley & Carr – they brought in McClaren (their man) and we spent around £90m over the summer & Jan window. It appeared he stepped in when Charnley & Carr didn’t have the bottle to get rid of McClaren – arguably too late, but he was trying to allow them to do their job. He was mistaken by now stepping in sooner. But having moved McClaren on, he made sure we secured one of the best managers in World football. When we were relegated, he signed off on making sure we kept him & he was backed in gettting the players he needed to get us straight back up.
This summer, he’s assured him he will get the kitty, but further more, he brings in his own players – back up by Carrs recent departure.
He didn’t back Pardew financially, but I think they made it clear we were going through a period of balancing books (again rightly or wrongly) – but he certainly seemed to back him personally, with an 8yr deal & standing by him after the ‘headbutt’ and a couple of failed seasons. He’s stuck with Charnley, promoting him from within & sticking with him after the McClaren **** up. Misplaced at times, but loyalty is rare in football.
Now, I’ve said that and I will say again – the guy has many many faults & I hope as much as everyone else that these buy out stories aren’t just rumours!!.
Sharpy17(Quote)
He was one of those who believed Townsend will come in the winter transfer. What else can I say?
funrafa(Quote)
Believe it or not, what happens will happen. Either Toon brings in people next week or so, or Rafa will leave. Things aren’t that sophisticated.
funrafa(Quote)
Funrafa thats why I want Pardew to get the Sunderland job as soon as possible. If Rafa resigns he’ll be back.
Stem(Quote)
Ashley might even want Pardew back. Next summer a new director of football. I hope not but this is Ashley.
Stem(Quote)
Stem, if Rafa resigns, anyone who can keep Toon in PL next season is good enough, with whatever squad strengthening Ashley will allow him to do, if there is any. Then hopefully new investment will come in and Toon army can finally say byebye to Ashley. As long as he is here, there is no hope.
funrafa(Quote)
funrafa(Quote)
Raffa is going nowhere.. he is in charge of transfers is he not?
Dealing in the transfer market would be frustrating so the papers are not exactly going out on a limb with that call..
I haven’t been stressed about any of our so called missed targets. None have really excited me at all..
Other than stirring up some Geordie fans, the press are clueless.
Aussie(Quote)
Who did?
Sharpy17(Quote)
?
Sharpy17(Quote)
To be fair, I suspect Fat Sam had a big say in whether or not we got Townsend back.
kimtoon(Quote)
Aussie they do need to get a shift on though, our need for decent players can’t be overstated and they need time to gel and if foreign adapt as well.
kimtoon(Quote)
Wonder who we’ll be linked with today then
kimtoon(Quote)
Kim – no doubt it will be someone we have absolutely no interest in, and then when they sign for someone else in a few days time we will have failed again & Rafa will have taken a step closer to the exit door ?
Sharpy17(Quote)
Kim – couldn’t agree more. Hopefully this week will see some movement
Sharpy17(Quote)
Lejeune will arrive at the weekend. He’s already told family and friends it’s a done deal. That’ll be the new financial year then.
georgio(Quote)
Kim & Sharpy (not Georgio ?)
Don’t get me wrong, i want some signings. I hope it is not some of the ones being mentioned. Most seem average. Hopefully we will see a surprise signing or two… of a quality level above what has been mentioned.
Aussie(Quote)