There is a decent piece in the Newcastle Journal today, an interview with Newcastle fan David Wilkinson, who just happens to be a partner at Deloitte’s Newcastle office.
Mike Ashley – would want to at least get his money back
David talks about what Newcastle United may be worth, and that football is not a normal business – you can say that again.
There are various ways to work out how much a business is worth, and usually it’s a multiple of earnings, but it’s very difficult to work out how much Newcastle is worth.
And even other companies, like Internet companies as a good example, are often sold for billions of pounds and yet they don’t have any earnings, and as one example Amazon,.com was valued at billions of pounds before they made their first profits.
Mike Ashley paid out about £134M for Newcastle in the summer of 2007, when he took Newcastle private, and since that time Mike has put another maybe £130M into the club, in the form of interest fee loans.
So being the businessman he is, Mike would need to recuperate at least the £264M he has already invested into the club – but there will not be many buyers at that price, and that’s a fact.
And we have seen that twice in the past, when Ashley tried to sell Newcastle.
First in September of 2008 after the Keegan – Wise earthquake, and we remember when Joe Kinnear came in as a caretaker manager in September, 2008 until Newcastle were sold, he said Newcastle would be sold the next week a number of times, but Newcastle were never sold.
And at the time Mike said he would sell, but that it was dependent on getting a decent offer for the club.
And then the next year after we were relegated, Ashley tried to unload the club, when the low £100M offering price wasn’t met by anybody.
And in April of this year, Newcastle were valued at around £174M by Deloitte, and we were the 20th most valuable football club in the world.
It will take around £264M to buy Newcastle, and we just cannot see any buyer coming in for Newcastle at that price.
Maybe the best chance we have of having Newcastle sold, is to have Newcastle become more successful – like win something for the first time since 1969.
But with Mike at the head of the club, and seemingly showing little real ambition – that will not be happening anytime soon.
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