The Agenda: Mike Ashley's actions are not those of someone about to sell up and leave

Despite the current turmoil, Mike Ashley is pressing ahead with his plans for Newcastle United

It is not a question that you will find at many Tyneside pub quizzes this weekend, but the answer is something every Newcastle United fan should know.

When, do you suppose, was the day when the website of Mike Ashley’s Sports Direct posted the record number of hits? The answer – November 9, 2011 – just happens to coincide with the evening when it was announced that St James’ Park would be renamed the Sports Direct Arena.

While we’re at it, ask yourself when you first became aware that Ashley had launched a sports news website. For most the answer would be May 15 of this year, the same day the site ran an incorrect news story linking United to the unsettled Wayne Rooney.

In a week when the black-and-white agenda has again been dominated by questions surrounding Ashley’s ownership of the club, these are two valuable nuggets of information. Ashley might seem to have spent his six years under semi-permanent siege, but his era has not been without its worth to his business empire.

It has been expensive too, given the interest-free loans sunk into the business. But access to a Premier League club that you can run exactly as you wish gives you something of tangible worth: profile on a global scale.

This, more than anything, provides an answer to the question that still causes bemusement in the North East today: namely, why Ashley got involved in Newcastle in the first place. It is also the first point of reference when momentum gathers around talk of a potential sale.

At this point in time, Ashley has prepared a short and medium-term vision for the club. In Graham Carr and Joe Kinnear, he has men he personally trusts and likes at the top of the organisation, and next season the pressure is on Alan Pardew to deliver more with less than he currently has. The top eight has been mentioned in the corridors of power, along with development of the club’s youth and reserve teams – both particular bugbears of the owner. They do not feel like the actions of someone ready to sell up.

A large slice of pragmatism is at play here. Ashley and Derek Llambias used to have a surefire way of sorting out the “tyre kickers” – asking them, discreetly and through a mediator, to buy a box before they even thought about enquiring about the club’s availability. No one ever did.

Dreams of a Manchester City-style takeover remain just that. Ashley does not move in those circles, but club sources have long indicated that international interest in buying Newcastle is yet to materialise. One City source told The Journal that many potential overseas investors have been put off by the volatility of the English game, citing the difficulty the Venkys have had at Blackburn. The Premier League no longer provides value for money, while the Financial Fair Play rules make it even tougher for even seriously rich men to make an impact.

But, as Ashley appreciates, there is an opportunity to advance a brand here. It is not inconceivable that someone, eventually, buys him out.

A national newspaper report this week pegged Ashley’s valuation at around £267m, figuring that would be the amount the tycoon has personally plunged into the club. He has also made interest-free loans of £129m to the club according to recent accounts.

City sources suggested to The Journal that figure is somewhat excessive. Ashley, they say, would be prepared to start talking closer to £200m – or potentially at around £150m if he was desperate for a sale. At this point, he is far from that.

After all, Newcastle’s commercial revenue – in a season where they finished fifth – has reduced. The TV money filtering into the club’s coffers might balance this out somewhat, but the sale of Liverpool, for £300m, was so expensive because the club is a money-spinner.

Liverpool’s recent commercial revenues were £77m and £80m – in the same years Newcastle managed £15.8m and £13.8m. There are myriad reasons for this, but it certainly dents the club’s value. In 2008, Ashley was prepared to sell for �80m, but he felt backed into a corner. Those close to the whole process indicated that soon after he has put that valuation on the club he began to suspect it was worth more, and when the club began well in the Championship there was a rapid U-turn.

The suggestion is that this was when he started to suspect that on-field success would soothe even the most rancorous mess. It appears, once again, that this is what Ashley is banking on as prepares to forge on with the Joe Kinnear appointment.

In an informative interview last year, investment banker Keith Harris talked about the tortuous process that unfolded in 2008 – when Ashley formally put the club up for sale.

“I wouldn’t say he was desperate to get rid of the club. He was disillusioned with what he saw going on at Newcastle United and he was obviously not massively popular in front of the fans,” he said.

“There’s not much honour in football. When a team gets relegated it tends to be the owner who gets criticised, but when things go well it’s the manager who gets the plaudits and I don’t think Mike was used to that.” But if he saw selling as a panacea, he was to get a rude awakening. Out of around 20 who made contact, just one buyer with any substance ever came forward – North East businessman Barry Moat. “We got expressions of interest from a lot of people, as is typical in football,” Harris said.

“Most of them were just kicking the tyres. There were one or two that came further than that but didn’t have all the money to invest but had some of it. It meant they required additional funding, but Mike lost patience with the whole process.”


David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer