With the financial results of the last year now announced, Newcastle United are the 19th richest club in the world with revenues of £129.5M, and one of the most profitable clubs in the Premier League with profits of £18.7M, so Newcastle would appear to be an excellent takeover target for a Billionaire or consortium who wanted to take Newcastle back to their former greatness.
Mike Ashley – owner of money-making machine
Also known as Newcastle United FC
That certainly will never happen with Mike Ashley as owner.
And we’ve always thought that Mike Ashley wouldn’t sell the club by putting it up for sale, which he’s already done twice with no success, but rather he would get a big unsolicited offer and would then sell quickly.
Mike paid around £135M for Newcastle almost eight years ago, and the club owes him £129M – so the bid would have to be something north of around £265M for the owner to get his money back.
Two big advantages Newcastle have as a takeover target are the fans, who would fill St. James’ Park every home game with 52,000, if we had a good side that was winning games and challenging for honors.
The other is the magnificent St. James’ Park stadium, which is one of the best in England.
And if somebody came in and did the necessary due diligence on the books, we feel that last year’s figures are even better than the 18.7M in reported profit.
There’s about £28M in increased revenue, that did not fall through to the bottom line as profit – so it’s gone somewhere as costs.
Newcastle finances are probably even better than the figures that were reported – which are both club records.
Another advantage for Newcastle is the enormous money coming in from the Premier League every May.
And next year the new massive three year deal clicks in, and the TV rights have gone from the current £3B to a massive £5.1B – an increase of 70%.
So assume we got about £80M for being 10th last season – that would be around £136M in May, 2017, if Newcastle finished 10th in the season after next.
And that would add around £56M to the revenues from last year – so let’s just say Newcastle are going to become a rich club with big profits – always assuming Ashley’s stringent and sometimes reckless policies don’t wind up getting us relegated again.
If an ambitious owner came in there would be ample money to spend on building up the squad rather quickly, and they could hire a world-class manager, yet still break even financially (zero profit), and keep within the guidelines of the UEFA Financial Fair Play rules.
So the bottom line is that Newcastle would appear to be a very good takeover opportunity for an ambitious new owner.
However, American Randy Lerner is having trouble selling Aston Villa – who are also a very famous club – and it seems like the best offer he will get for Villa is around £150M.
The news this week is that Lerner has flown to England to enter into discussions with an unnamed consortium with Villa at a price of £150M, and negotiations are said to be at an advanced stage.
But with Aston Villa still in danger of being relegated – being only 2 points above the drop zone in 4th bottom place – a purchase now would seem very risky.
Newcastle would be a much better bet, but the club would cost around £115M more.
With all this big money coming in, we also doubt that Ashley would want to sell; not until we’ve had a couple of years of the new massive TV deal that starts next year.
Newcastle’s currently too good of a money-making machine for Mike Ashley for him to sell now.
Unless a big offer comes in.
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