We’ve read a few reports about Mike Ashley’s sale of £100M when he recently sold 25M of shares of Sports Direct – the company he founded back in the 1980s.
Mike Ashley – sold £100M of Sports Direct stock recently
We issued the report on that yesterday, and a number of the later reports seem to suggest that it could be something to do with investing in Newcastle United, but we’d be very surprised if that is the case.
You have to remember that Mike’s money is completely separate from the Newcastle United Football club business accounts, and the only way Mike has “invested” his own money into the club is by loaning Newcastle around £130M – and it’s a zero interest loan – so Newcastle are saving on the interest they were paying when Ashley took over the club – and at a 5% interest rate, that’s around £6.5M every year – there’s a good player right there every season.
That loan money will need to be paid back at some point, but since the owner has said he doesn’t need to be paid back anytime soon, we assume that when he eventually sells Newcastle, whenever that is, it will be part of the total transaction of selling the club, and he’ll get his money back at that time.
We certainly don’t need money for players this summer, since Newcastle only need to bring in a couple of good players.
But of course there is always that St. James’ Park expansion we talked about a few years back, which was to increase the total seating capacity up to 60,000 at the stadium – and at some point that’s got to be one of the steps to make Newcastle into a top English and European football club – and of course it increases our match-day revenues too.
But before that happens we need to be doing consistently well in the Premier League, so we can fill the extra 8,000 places at each home game.
We’re sure Mike’s sale of some of hi stock is nothing to do with Newcastle United Football club – and it’s probably nothing more than Mike diversifying his investments away from Sports Direct.
But there again, we’ve been wrong before ………
What do you think?
You can also reach Ed at firstname.lastname@example.org