The Telegraph is reporting tonight that Mike Ashley is set to end his seven-year stretch as the owner of Newcastle United, with the news that he will increase his stake in Glasgow Rangers and to do that he will have to sell Newcastle.
Mike Ashley – will sell Newcastle?
Luke Edwards is reporting that Mike Ashley is ready to receive offers from investors to buy Newcastle United.
The reasoning is that Mike wants to increase his stake in Rangers by more than 10% – he currently owns 9% – and he is prevented from doing that by the Scotland Football Association, because he already is the owner of Newcastle United.
Ashley is looking for about £230M for Newcastle, and that would mean he would recuperate most of the investment he put into the club – he bought it for around £134M from Sir John Hall and Freddie Shepherd back in June of 2007, and has about a £129M interest-free loan to the club.
If the Telegraph report is not true we would expect the club to come out and say so via a statement – and silence would infer the report is pretty much accurate.
Rangers are again in some financial trouble and are said to be close again to administration, and Mike could play his hand and loan Rangers the money they need to avoid administration for a second time in only three years.
Administration could be devastating for Rangers, and could even mean demotion back down the Scottish league, and in that way Ashley could be the white knight.
The news of a few days ago was that Ashley already has the naming rights to Ibrox Stadium, and we could see another Sports Direct Stadium fairly soon in Glasgow.
But Ashley has tried to sell Newcastle United twice before and was unsuccessful both times – in October 2008 after the Kevin Keagan affair – and then again in the summer of the following year, after Newcastle had been relegated.
In fact the second time he wanted only £80M for the club, and at the time Newcastle were a Championship club and there were still no takers.
One good thing about the Tyneside club that will be attractive to investors, is that Mike Ashley has made Newcastle into a financially prosperous club, and anybody doing due diligence on the finances of the club will have to be impressed.
We think profits for the financial year ended at the end of June, could be as much as £50M with revenues of around £135M – that’s a rough estimate.
Those revenues and profits would be the best ever – by far – in the history of the club.
But even if this news in the Telegraph is accurate, there have been no takers before, but Newcastle fans will hope a consortium can come in and buy the club off Ashley, and then make it into a top six English club – like we used to be – with ambitions to play in the Champions league every season.
That’s what we’d like to see, but whether that will happen we have no idea.
The first thing to find out is whether Mike Ashley really wants to sell Newcastle.
What do you think?
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