Why Mike Ashley Won’t Sell Newcastle United Just Yet

Mike Ashley is not selling Newcastle United this summer. Not only does it not make sense but the news itself is wide off the mark and completely misinterpreted.

So far, what the Sun (who seem to have an ‘insider’ source) are saying is that people from New York based private equity fund, InterMedia Partners met Mike Ashley’s people last month and discussed the possibility of a sale. The meeting is termed to be quite serious but was killed over a disagreement over the valuation. While this is highly unlikely, but for argument’s sake let’s say this happened. So what? Businesses (and Newcastle United is as much a business as it is a football club) that are prominent in the public eye – especially profitable businesses or those with a lot of potential – are regularly sounded out by suitors.

From personal experience, 90-95% of these queries have no end result. InterMedia may or may not have approached Newcastle with a view towards buying it, but in such a case Ashley’s instructions would have been to ignore such an approach UNLESS they offered the type of profits he is looking for to make from Newcastle.

Newcastle is not a cash cow (debts and high wage bill, anyone?), so any new investor is unlikely to pay over the market price for it. If DIC refused to pay the 500m reportedly asked for Liverpool, you can rest assured that no investor is going to pay more than 150m-200m for Newcastle at this point.

Mike Ashley has already invested over 230m in the club. He’s going to want to make a profit on his investment, and since he’s playing with hundreds of millions, he’s going to try and take the long-term route and at least double his investment if not triple it. That will take time – several years at least – and will require the club to do significantly well on and off the pitch.

In time Newcastle will be worth the amount Ashley wants to cash out for, and then it will be sold to the next big investor (unless Ashley wants to play for even longer-term stakes and stays on for more than a decade or two). Till then, suitors will approach Newcastle and be rebuffed by the asking price – just as InterMedia reportedly were, IF they actually made an approach or not.

Apparently a club spokesperson has rubbished the reported price tag and classified it as complete nonsense. Go figure. The meeting might have happened, but I doubt it will translate into anything serious.

What will be the lasting memories of Euro 2008?
7 Reasons Why Americans Suck At Soccer


  1. dave 4 July, 2008
  2. Darren 4 July, 2008
  3. Chris 4 July, 2008
  4. Soccer Writer 6 July, 2008