There was one question that was asked and answered at the Fans’ Forum meeting on Monday night, that explained wy Mike Ashley first bought Newcastle United Football Club, and how he is not using the club as a pawn for his Sport Direct business.
Mike Ashley – bought Newcastle to have some fun – we don’t think so
Mike bought the club back in June of 2007 and he bought the club quickly by buying the shares of both John Hall and Freddy Shepherd for around £140M – so fast in fact that his due diligence was not very thorough.
And Chris Mort came in and took a closer look at the financial books, and there was a £100M loan Newcastle had, which they hadn’t realized existed when they agreed to buy the club.
And Newcastle at the time were paying around £8M a year for that loan – although these days the interest rates are much lower than 8%.
That loan is now up to £129M, and we all thought it was interest free – and good for Newcastle.
But this is a significant question and answer from Monday night
“What is the saving that Sports Direct makes on advertising around the stadium?”
In reply the club released the following short statement:
“The club suggested that while it is always proactively looking to attract new commercial partners and to sell that advertising space, in the current climate it could not command a sum for that space anywhere close to the £129M invested into the club interest free by the owner.”
So it seems the fact that Mike Ashley paid off all of Newcastle’s loans and gave us it interest free, comes at a price.
And the price is that Sport Direct is advertised all over St. James’ Park, and even in the stairwell where the teams are televised before they come out onto the field.
A large Sports Direct emblem was even placed on the field before the game last Sunday, so prevalent is Sports Direct at the stadium.
And not only is that terrific advertising for Sport Direct in the UK, but it goes around the world too.
Mike has been quoted as saying he bought Newcastle to have some fun, but there hasn’t been too much fun over the last seven years, especially for the fans, and it has included our first relegation ever from the Premier League and a fight against relegation just last season.
It wasn’t for fun that Mike Ashley bought Newcastle, it was to use the famous club as an advertising vehicle for his Sports Direct business.
That’s not really what Newcastle should be being used for.
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