There’s news today in the Times that Mike Ashley is in talks with potential buyers (plural) of Newcastle United.
Of course, we have had a lot of this in the past and nothing has come of it.
But with world-class Rafa Benitez already in place, looking the perfect manager for the club, and doing well at 4th top of the Premier League, it has to be more enticing for any buyer to snap up Newcastle now
They would get a club just as the Rafa revolution is starting to get underway.
When any buyer starts to get serious about an acquisition, they start to do due diligence and get access to the detailed financials of the club or company.
That’s unless you are Mike Ashley who skipped on this importsnt step in May 2007 when he bought Newcastle. and then found out before the end of the year the club owed 100M whuch he didn’t know about. – so it’s an imnportant step.
Mike then found out before the end of the year the club owed £100M which he didn’t know about.
So due diligence is an important step in any acquisition.
And before they do that the potential buyers have to sign non-disclosure agreements so they don’t go out and tell everybody what they found out, but rather keep it confidential.
The Times report talks about potential buyers already having signed non-disclosure agreements so at least the potential buyers are interested and doing some initial due diligence on Newcastle.
Mike Ashley – will he finally sell Newcastle?
The price put on the club of £400M in the summer by owner Mike Ashley has also been reduced slightly (5%) to £380M and that would still give Mike a profit of around £100M.
Mike Ashley has put around £280M into the club.
Buyers of Premier League clubs tend to prefer London based or southern-based clubs and one disadvantage at Newcastle is the geographic location.
But on the other hand, Newcastle are guaranteed home crowds of over 52,000 and have some of the best supporters anywhere.
And with the current Premier League TV rights deal of £5.1B, we are almost guaranteed maybe as much as £150M a year – which is likely to go even higher in future years.
So it looks that at £380M, Newcastle with Rafa Benitez in place could be a good buy for a rich and ambitious consortium., and that price is just over twice the amount we are almost guaranteed from the PL TV rights deal.
The buying price is just over twice the amount we are almost guaranteed from the PL TV rights deal.
We’ll just have to hope investors also think that’s a good deal – and that Newcastle are sold – maybe even this season.
Rafa has put together a good team while spending only £12M net last summer.
So if he was allowed to spend £100M net next summer, we could have a strong team next season and be immediately fighting for a top four position.
That sounds good!
What do you think?