*An alternate view on Mike Ashley’s failure to sell so far from Mike Smithers – a Newcastle fan and businessmen based in Durban, South Africa*
Mike Ashley bought Newcastle United Football Club in 2007 and, according to a section of fans, the club has been going downhill ever since
But is that true?
The first thing we have to settle is Newcastle United a football club or a business…or both.
As a club there is a consistent ring about us being a mid table side, apart from the 4 or 5 glory years. As a business it is successful. I suspect that it is both, with the emphasis on the business side of the club
When NUFC got relegated under Alan Shearer, Ashley put the club up for sale for about 100 million pounds – which is roughly what he had put into the club. There were no takers, Shearer left and the club brought in Chris Hughton, who got us promoted, leading to Ashley taking the club back off the market.
My understanding is that Ashley is a businessman first and a football club owner second and the question “does it make good business sense” guides all his decisions. Yes there is money for the club to use and some of his footballing decisions are hard to swallow, but it makes good business sense.
So to my headline “Why would Mike Ashley sell Newcastle United?”
One reason and one reason only it makes good business sense. Lets unpack Newcastle from a business point of view
- The club has no debt
- The club is making a profit – One of only 6 in the Premier League to do so.
- The club is well run – no tax issues etc
- Most of the players bar one or two could be sold for a profit
- Sports Direct has a captive market for its advertising both to supporters and via TV broadcasts
- The day to day running of the club has no direct impact on the holding company so the club is financially solvent
- The club is the 17th-highest revenue producing club in the world in terms of annual revenue, generating €169.3 million in 2015
From a business point of view the club is doing well, but with every business there is a figure that you will sell your business for. That is why Ashley has placed a valuation of upward of £340m for the club – and he won’t sell for less.
Sports Direct and his other business ventures are all succeeding and in a business environment that, to be honest, is very challenging. So why would he sell for less that he values the business at. Would you?
From a football point of view there are some strange decisions (some might even call them diabolical decisions) and although Ashley is a football supporter of sorts, he is first and foremost a very hard nosed and successful businessman. He dint become successful by being a Wally.
Personally, I don’t believe that the stories floating around about the buyout have any credence at all for one reason – it’s in the media.
When I sold my 2 businesses, no one other than the buyers and immediate family knew about it until it was done – and we all signed NCND agreements before we started talking. I suspect that Ashley, who is light years ahead of me in business success, has a much tighter NCND!
So to my original question – Why would Mike Ashley sell NUFC?