The Newcastle United club issued a statement today to the Newcastle Journal, which seems rather strange, on the status of the club’s potential sale.
The statement read:
“The £100M asking price has been matched, however, we are still in negotiations and all parties involved are at sale and purchase stage.”
So what this says is that the sale is reaching the final stages of completion, and surprisingly there are still more than one party involved – so on the surface this has to be good news.
However we believe only one party, Barry Moat has bid the requested£100M, and the other two groups have yet to lodge formal bids for the club, although they are still actively involved.
Not sure why this statement was not put out on the official web-site though.
Owner Ashley is said to be closing in on a deal with Barclays Bank to secure a new, but much-reduced, overdraft facility with the bankers following months of talks. That overdraft facility we understand now goes from£39 to a new figure -£25.
The previous figure mentioned had been £10M, so this is better from the club’s perspective, but it that£10M overdraft is what has been offered to Moat if he buys the club, and why there is a difference is not clear to us. But it probably is due to the difference in the financial clout of Ashley compared to that of Moat and his backers.
This would provide Newcastle with funds for this season, and Ashley seems to be hoping the club’s good form at the start of the season will go a long way to help closing the deal.
The Journal is reporting that local businessman Barry Moat is behind the £100M offer mentioned in last night’s statement, but that the overdraft facility to Moat is less than the £25M available to Ashley – and that’s why we think it’s probably the £10M figure that’s been mentioned over the last couple of months.
There are two overseas parties, both thought to be American, who are now beyond the due diligence phase, and the next stage will be putting in formal bids – or not.
Richard Slack, principal lecturer in accounting and finance at Northumbria’s Newcastle Business School, told the Journal this morning:
“Ashley’s attempts to sell the club appear to be failing in the short term and it looks like he is adopting a new strategy.”
“He has slashed the wage bill by off-loading players and it looks like he is only prepared to sanction loan signings so the club won’t be encumbered with any new long-term wage commitments.”
“If the team continues to perform well and looks like getting promoted then the club will become increasingly attractive.”
“Potential purchasers will be attracted by the huge income potential a return to the Premiership will mean, and they will also inherit a club with a low wage bill.”
That’s good thinking by Ashley, and there’s nothing wrong with loan signings, as long as we can bring class in – and keep them for the full season – and certainly Simpson and Khizanishvili are excellent signings.
It also allows the club, should we get promoted in the summer, to keep the books in order, which Premier League clubs have to do within 3 years in any case, under President of UEFA, Michel Platini’s new initiatives.
The club’s projected revenue for this season is estimated at £60M – and the Journal says that’s down down from the previous £90M – although records indicate the revenue for the club is very close to £100M. By the way £60M revenues in the Championship is just fantastic – and it’s all down to the gate receipts and the ever loyal and legendary Newcastle fans.
Newcastle, who were big spenders and had a wage bill of £74M, and were forced to take big cost-cutting moves over the summer, much more than most clubs who are relegated.
Selling Obafemi Martins, Sebastien Bassong, Habib Beye and Damien Duff over the summer,a nd the some of the£23M generated from those sales has helped reduce the active overdraft.
On the Barry Moat deal one source said:
“Ashley is playing hard and fast on the price and there appears to be a difficulty with one of Moat’s equity backers.”
There have been no formal offers have been made by the two overseas groups said to be interested.
Overall we think this is decent news on the sale, because there seems a growing light at the end of the tunnel, and a couple of points to also remember:
- Every win will help to sell the club, as it becomes more attractive to buyers, because we could be a potential Premier League club next season – so this means the players can help to put Newcastle on a more stable future – by winning their games
- There’s a good chance a sale can be completed before the end of the year, which would allow the Newcastle club and its new owners – at last – to take stock of the situation in January, and strengthen the squad even further, to increase our chances of promotion at the very first attempt.
As we said this is fairly decent news from what we can tell – and of course even more reason we need those 3 points against Plymouth Argyle today! 😀
Howay The Lads!!