Why Potential Buyers Turn Away From Newcastle

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Newcastle United have owed Mike Ashley about £129M for a few years now and the club seems not particularly keen  to want to pay off that loan with some of the profits the club has made over the last few years.

And Mike Ashley doesn´t seem too keen to want it paid back any time soon.

The loan is interest free.

But The Times is reporting today that potential buyers of the club would need to pay off that loan as well as a fee for the club if they were to buy Newcastle United – which is true – and would make Newcastle £129M more expensive than another club that has zero debt.

mike-ashley

Mike Ashley – Newcastle owner

But then the question would be how much would Mike ask for the club,  given the potential buyers would have to cough up another £129M?

Another way to look at all of this is that Mike paid about £135M for the club in the summer of 2007 and then ploughed £129M in loans into the club – so his investment in Newcastle is around £264M – as far as we can tell.

He would want at least that back if he sold Newcastle, so the price for Newcastle could be £135M plus paying off the loan – if Ashley only wanted his money back.

The £129M was made up of him covering a £100M debt he didn´t know about when he coughed up £135M for Newcastle  in 2007 and then Chairman Chris Mort found out about the debt in September of 2007 when going more thoroughly through the books.

Then Mike loaned the club about £29M to help shore up things financially when we were down in the Championship for one season in 2009-2010.

But the biggest problem is getting the Billionaire to sell up and last time we were relegated he put the club up for sale but it was a complete circus, which went on until he said he would keep the club.

And it would need some potential buyer to want to buy a Championship club – and they wouldn´t want to pay £260M for one – that´s for sure.

So for Ashley to sell the club when we are in the English second division would mean him taking a big loss on the club and he wouldn´t want to do that.

Only recently did Mike Ashley say that he and Newcastle were wedded to each other and he wasn´t interested in selling even if we are relegated:

Do I regret getting into football? The answer is yes. I have had tons of fun in it but I haven’t been able to make the difference I wanted to like I have at Sports Direct.

“I wanted to help Newcastle.”  “I wanted to make it better. I do not seem to have had that effect.”

“I’ve got no choice but stay if we are relegated,” “I am wedded to Newcastle like Sports Direct and they’ve got me and I’ve got them. That’s just the way it is.”

But the big trouble is it´s been a  bad wedding from the get go.

Comments welcome.



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