NEWCASTLE United have been in talks with “three or four” parties interested in buying the club.
But the Magpies claim Singapore-based investment company The Profitable Group is not one of them.
Owner Mike Ashley officially put United on the market on Monday with a £100m valuation, inviting offers via email or by contacting investment bankers Seymour Pierce, who have been given the task of finding new owners.
Among a predictable round of hoax replies and joke emails there have already been “three or four” serious offers for the club, who were relegated to the Championship last month.
A source close to The Profitable Group yesterday claimed the company – which has former Liverpool midfielder Steve McMahon as its Group Commercial Director and ex-Magpies manager Kenny Dalglish as a consultant – was also interested. But last night United were at pains to deny claims they had spoken to Ashley and managing director Derek Llambias.
In fact, they claim their last contact with The Profitable Group was nearly a year ago.
“We know who this Profitable group are because we had some dealings with them last summer regarding some business in the Far East, but there has been no contact since,” confirmed Llambias. “We have never spoken to the Profitable Group about the sale of Newcastle United since we put the club up for sale.
“They have claimed they have met Mike and myself to discuss things and they haven’t.
“There are three or four interested parties who we are talking to but these aren’t one of them.”
The speculation regarding who will and will not be the next owners of Newcastle United is bound to persist until the matter is resolved, but a source involved in the process of finding new owners warned that most potential purchasers would prefer not to reveal their hands until the last minute.
It said: “Anyone who starts shouting from the rooftops about their intentions should set the alarm bells ringing. Talks with three groups who want to remain anonymous for now are ongoing.
“They don’t want to be known just yet. That is how we are trying to do business. That is the proper way to do it, not by talking through the media.”
Quite apart from the football credentials provided by McMahon and Dalglish, Profitable also have a strong North East connection. Group planning director Neil Osborn is a graduate of Newcastle University and European operations adviser Darren Venn is a former commercial director of United, where he worked from 2006-08.
Profitable were linked with a move for the club in August, when McMahon was spotted at a St James’s Park game, but the ex-England international insisted he was just there to discuss a commercial tie-up in the Far East. The company has organised Liverpool’s pre-season tour of Thailand this summer. Crucially, though, the market for buying United has been radically changed by their relegation from the Premier League. No longer being part of the world’s most lucrative football competitions has instantly slashed the club’s revenues.
Television money, ticket sales and merchandising income are all expected to reduce massively and Newcastle could even find themselves having to subsidise the departure of some of their better-paid players, having to pay part of their wages so they can play elsewhere, rather than having to meet their multi-million-pound contracts in full.
In recent years it has become standard practice for Premier League clubs to insert clauses in players’ contracts triggering a reduction in wages should the club be relegated, but Newcastle are not thought to have made any such provisions.
Last week around 120 full and part-time staff were made redundant as part of a post-relegation cost-cutting programme at the club.
As a result of their demotion, the price of buying Newcastle has fallen from around £480m to £100m.
Ashley was unable to sell the club at his original price, having been forced to try by angry fans’ protests following Kevin Keegan’s departure from the manager’s job. The club were taken off the market in December, only to be put back on it again following relegation.
Ashley’s stewardship of the club has been an unmitigated disaster. Since buying out Sir John Hall and Freddie Shepherd in the summer of 2007, he has appointed five permanent or temporary managers and seen the Magpies lose their top-flight status, which they had held since 1993.
Profitable’s plans for the club include appointing Alan Shearer as manager, increasing the capacity of St James’s by around 8,000 to 60,000 and turning United into a trust to be run along the lines of “members” clubs Barcelona and Real Madrid.
Investors on tap for company with wide portfolio
IF The Profitable Group buys Newcastle it is likely to tap some of its hundreds of wealthy global investors to provide the £100m-plus cash to do so.
The Singapore-based business started off as a property investment company, developed into a wealth management business and now has a diverse portfolio of interests.
These include public sector consultancy work, software development, education training tools, venture capital, art investment, sports consultancy, football brand development, events management and marketing.
The company started off in 2004 in the UK, before opening a branch in Singapore and relocating its headquarters to the former British colony. It also has offices in Malaysia, Canada, Indonesia, Thailand, Brunei, the Philippines and has recently opened branches in the UK, Dubai, France, Cyprus and Albania.
Its website proclaims: "Throughout our history the group has always adhered to the most strict and conservative financial policies.
"For example we have never borrowed and we have never offered finance. In these troubled financial times, these have proved to be wise policies, enabling the group to continue to expand its network of offices and its range of products and opportunities for its clients.
"This focus and the results therein, have bought about a set of disciplines and practices and created a highly effective and efficient infrastructure which is the basis of our success."
This year, Profitable is promoting Liverpool’s pre-season matches in Singapore and Bangkok, while the executive list at sister company Strategic Sports Investment includes former United manager Kenny Dalglish as "UK Operations Advisor". The "European operations advisor" to Strategic Sports Investment is Darren Venn, former commercial director of Newcastle United, who left the club last August.
Vinay Bedi, divisional director at Brewin Dolphin in Newcastle, says there are no similar companies to the Profitable Group in the UK.
The extensive range of fields in which it operates makes it unique and with, no profit figures available, it is difficult to determine its strengths. It operates by attracting investment funds from wealthy individuals.
Mr Bedi said: "It appears to have hundreds of wealthy clients and would most probably buy Newcastle by asking these to contribute. It looks capable of raising the money needed to buy Newcastle."