Newcastle’s Poor Run Of Form Affecting Potential Takeover – May Not Happen Until Summer


53-year-old Christian Purslow is a British businessman, who was a co-founder of private equity company Mid Ocean Partners and is the former Managing Director of Liverpool Football Club.

He is now Director and Head of Global Commercial activities at Chelsea Football Club.

He is very knowledgeable about mergers and acquisitions (M&A) and in the general business associated with running a football club.

Christian has been interviewed by Sky Sports Monthly, and he has talked about the potential Amanda Staveley takeover of Newcastle.

Purslow believes Newcastle’s poor form over the last six games ( we have one point from those games) is complicating the potential takeover.

In short, a buyer doesn’t want to buy Newcastle now if we are going to be back in the Championship next season.

It’s a very interesting interview.

Christian Purslow – makes some very good points on the takeover

Here’s what he had to say about the potential Amanda Staveley acquisition of Newcastle:

“The Business’ slot that the difference in valuation between Amanda Staveley and Mike Ashley is unlikely to be resolved with Newcastle at risk of relegation.”

“Staveley’s view on value and Mike Ashley’s are some way apart but critically she is also starting to be concerned about the relegation risk.”

“Offering an owner of a Premier League team a deal that says, ‘I will give you £250M-£300M, but if in August I find myself in the Championship I’d like a refund of a £100M’ then.”

“Mike Ashley is never going to accept a deal like that.”

“The more likely sequence of events, I am not saying it is impossible, is that buyers wait to see where Newcastle settle and once their Premier League fate is secure then a deal gets done by the end of the season.”

“But the idea that a deal is going to happen in the next few weeks, let alone at levels that are way below what Mike Ashley’s asking price was, is fanciful. I think by the end of the season is when the club gets sold.”

“Newcastle’s run of six defeats in seven games is bringing matters to a head. As Ashley sticks to his valuation, Staveley will hardly be minded to up her group’s offer while there is a chance Newcastle could be dragged into the relegation fight.”

“The significance of that is that when you are buying or selling a football club, the valuation is directly linked to the revenue performance of that club.”

“A club in the Championship is worth substantially less, a fraction of a club in the Premier League.”

“Mike Ashley was rushing to capitalize on Newcastle’s very good start to the season in the summer and autumn. We are now moving into these long winter days and Newcastle have had a very bad run of form.”

“For any potential acquirer of Newcastle, today, to commit to a valuation would be a very bold move because if the club was relegated that value would look crazy.”

There now seems little hope of a takeover being completed by the end of the year – or even by the end of January.

That’s unless Newcastle go on say a six-game winning streak when it looks like there’s no way we will be relegated.

Now Rafa Benitez will likely need to negotiate with Ashley as to what funds he gets in January.

Surely Ashley knows he needs to help Newcastle survive because then he can get near the price he wants for the club; if we are relegated he should forget about selling because he will lose some big money.

But in the past, Ashley has not always done the logical thing.

Comments welcome.



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27 comments so far

  • c-dog

    Dec 5, 2017 at 1:22 PM

    Comment #1

    Bordering on disaster, never smoke without fire…

    0
  • hibbit

    Dec 5, 2017 at 1:36 PM

    Comment #2

    c-dog
    you have to be an optimist to support newcastle

    3
  • AncientC

    Dec 5, 2017 at 1:37 PM

    Comment #3

    I see some fans are already turning on Staveley for an alleged £250 million bid—some fans arguing that is derisory.

    Seriously? Southampton was recently bought (80%) for £210 million. Southampton are an established PL club, they have a higher squad value + they have a proven track record of producing players and establishing profits. Newcastle has spent 1 of the last 2 years in the Championship, and is currently in form to go back to the Championship unless heavy spending is introduced. So tell me, why is Newcastle worth more than Southampton?

    Also on that note, if these rumours are true, what happened to the information that a price had already been agreed?

    4
  • ashleysmate

    Dec 5, 2017 at 1:39 PM

    Comment #4

    Ah well, the idea was nice while it lasted…back to the drawing board?

    0
  • hibbit

    Dec 5, 2017 at 1:40 PM

    Comment #5

    c-dog

    just tell me where’s realism ever got us ???

    0
  • hibbit

    Dec 5, 2017 at 1:46 PM

    Comment #6

    if this is true and as this guy says the gaps to big to bridge why hasn’t Ashley walked away he was quick to do it in the past
    both parties are still at the table i ask you why ??????????

    2
  • Jib

    Dec 5, 2017 at 1:51 PM

    Comment #7

    Ancient C
    Interesting you should bring up Southampton
    The Gao family from Hangzhou took over
    a year to complete the deal , about 14 months
    I think.
    A similar time frame would take this takeover
    to next December !

    0
  • Tsunki

    Dec 5, 2017 at 1:52 PM

    Comment #8

    If this guy is accurate it puts rafa in the driving seat of this whole thing. Mike would be taking a much bigger than usual risk that we can escape relegation, it’s not just a question of dipping out of next year’s TV money, it’s a potential deal-killer that would keep him with us for years.

    If the deal is protracted until we get some safety points then mike has little choice but to see Rafa gets what he needs in January. Up to him how little or how much but it’s up to him all the same.

    0
  • jesperfuglsang - capt'n awesome of the lemon crew

    Dec 5, 2017 at 1:55 PM

    Comment #9

    Wouldn’t Ashley basically be at the table seeing as he’s trying to sell the club to anyone willing to meet his demands…so to speak!

    …he is not going to leave the table, but the “other” player could potential change

    0
  • Bianconeri

    Dec 5, 2017 at 1:56 PM

    Comment #10

    I’m confused.Awhile ago on here it was deal done,now it’s a maybe and if.What is it? I am guessing ITK means in the know,if that’s correct have any of the itk’s been right in the past,the press don’t seem to know what’s going on.I’m not taking the P just wondered and hoped they have been,as like many on here have been building my hopes up.It now feels like I’m part of the gnomes game Deal or no deal 🙂

    Oh happy 13th huzzah harramph birthday G2 huzzah harramph wtf is that all about,fandabbyfecindozy harrumph

    1
  • geordiemark

    Dec 5, 2017 at 1:57 PM

    Comment #11

    Ashley is finished and he knows it, just imagine how much in advertising this evil swine has taken out of the club, the thing is he does not own sports direct fully he has 50 odd percent of the company I wouldn’t be all surprised if hes billed the company for the advertising and hidden it away does the panama papers and the paradise papers come to mind I just wonder if his name is in there somewhere, the tax investigation well its obvious who kicked this off the politicians did when Ashley refused to be asked questions about the tacky company he part owns and by messing them about well they must have had a word with the tax office to try find some dirt on him, I think Amanda staveley are right in putting in a 250 million bid hes lucky hes getting that and I would have a relegation and tax clause in them as well

    0
  • c-dog

    Dec 5, 2017 at 1:57 PM

    Comment #12

    I’m not saying nothing is gonna happen. All’s I’m saying is where we are right now is not good. Rafa or no Rafa our squad is aguably the poorest in the Premier League. We’re asking the man to work miracles to keep us in the league. I’ll be optimistic if any takeover actually goes through. Until then, I’ll wallow in the present.

    0
  • Tsunki

    Dec 5, 2017 at 1:58 PM

    Comment #13

    Unfortunately mike’s valuation of nufc is heavily tainted by his shoving loans into it. While he might think he’s entitled to a value that includes him getting these loans back, prospective buyers may just treat that as him throwing good money after bad. I’d be inclined to agree with them. If you spend £1500 tarting up a second hand car worth £1000, you won’t get any more than your grand.

    1
  • Grantosuk

    Dec 5, 2017 at 1:59 PM

    Comment #14

    He “believes” the club won’t be sold when we are “relegation threatened”. Its not even Christmas yet, how can we be relegation threatened?!?!

    0
  • geordiemark

    Dec 5, 2017 at 2:01 PM

    Comment #15

    Grantos

    going by the last 6 games that’s relegation form by a mile

    1
  • jesperfuglsang - capt'n awesome of the lemon crew

    Dec 5, 2017 at 2:04 PM

    Comment #16

    Well Grantosuk…if you’re spending a quarter of a billion would you want to be sure it was a sound investment?

    0
  • geordiemark

    Dec 5, 2017 at 2:06 PM

    Comment #17

    and another thing about rafa either he does have inside info I don’t know but the clubs form in the past 6 games has been nothing but crap, in all of 50 years of the toon ive never seen 11 players do nothing in a game to warrant a win, ive watched some really bad teams in the 70s 80s but this team the way its set up and plays is a damn disgrace to the fans who work hard and pay good money to watch it and that’s down to rafa as well he is the one who picks them no one else does so the buck has to stops at him but mostly the players

    1
  • lochinvar

    Dec 5, 2017 at 2:07 PM

    Comment #18

    It’s not the poor run of team form that’s the problem rather it’s the abysmal run of ownership and managerial appointments perpetrated under Ashley.
    So what happens if we now go on a run of six unbeaten game, does the deal conclude immediately ?

    Forget Camden Market it’s been reported before that Ashley is the preferred bidder for a mega land/property deal in London and that he needs to pay up by 15th December so needs the readies from selling NUFC to conclude the deal. He has to decide – recover his investment in NUFC having enjoyed the financial benefit of free global advertising for years or loose the London land deal and loss of face that goes with that. Not selling is not an option for him – it’s just about him and PCP agreeing the package.

    2
  • Bianconeri

    Dec 5, 2017 at 2:10 PM

    Comment #19

    I see the Bald Eagle from the evening crocodile is saying talks to go on till 2018.If that’s right no money for Raffa in January sales then.

    Speaking of the bald eagle can you remember those adverts with Joe and Petunia in them,doesn’t the bald eagle look like him,or the farmer with the red face 😉
    https://www.youtube.com/watch?v=KEHc1XGr0Ss&list=RDKEHc1XGr0Ss&t=48

    1
  • AncientC

    Dec 5, 2017 at 2:11 PM

    Comment #20

    Southampton squad value according to tranfermarkt: £255, 600,000.
    Newcastle squad value according to transfermarkt: £137,000,000.

    Whilst the values on transfermarkt are not all together realistic (usually lower), the difference in value between players is accurate, giving an accurate view of the difference in value between the squads.

    Newcastle has bigger advertising potential, but that cannot be proven due to Ashley not maximising that revenue stream. Complete unknown for a buyer.

    Southampton doesn’t have HMRC investigations hanging over it… and you would assume Southampton would be a safer buy—in comparison to goodness knows what could turn up at a club after Ashley’s ownership.

    Southampton, Established in the PL and looking safe. Newcastle 2 relegations in something like 7 years and in form for another one.

    Southampton’s notorious youth production line that can reel off international players with potential to be worth fortunes. Newcastle, who got lucky and overpaid on Andy Carroll once in the last 10 years.

    The only financial perk Newcastle have over Southampton right now is the bigger stadium.

    Ashley should be chewing PCP’s arm off for £250 million—if Southampton are worth around the same.

    4
  • geordiemark

    Dec 5, 2017 at 2:11 PM

    Comment #21

    lochinvar

    as you know a winning team sells the club unless rafa has had info on this and has done this on purpose which I wouldn’t put it past anyone really everything can happen this day of age

    0
  • hibbit

    Dec 5, 2017 at 2:11 PM

    Comment #22

    c-dog
    fair do’s ……….. i’ll try and be optimistic for both of us but got to admit its bloody hard at times

    0
  • geordiemark

    Dec 5, 2017 at 2:12 PM

    Comment #23

    AncientC

    I wouldn’t give them 137,000 quid for them

    0
  • hibbit

    Dec 5, 2017 at 2:14 PM

    Comment #24

    jesper

    there is no other player it was all a figment of Bishops imagination

    0
  • jesperfuglsang - capt'n awesome of the lemon crew

    Dec 5, 2017 at 2:21 PM

    Comment #25

    hibbit…all I meant was Ashley would of course still be a the table…he put the table there!

    …I’ll believe there never were another buyer! Ill even believe there there were 4 consortia’s signing a NDA…or even two for that matter!

    0
  • oldarse

    Dec 5, 2017 at 2:24 PM

    Comment #26

    Could the big picture be that Raffa wants out just keep picking a bad team.

    0
  • Madmag

    Dec 5, 2017 at 2:28 PM

    Comment #27

    @ Jib on previous thread..

    If relegation is a factor in these negotiations.
    It would point to someone whose sporting
    experience is more American than European
    In the states in NBA NFL MLB and MLS there
    is no relegation it’s all closed shop.
    That’s not to say the interest isn’t Middle Eastern
    loads of the princes were educated stateside

    Logic isn’t your strong point is it? The first sentence would only make sense if you reversed the positions of the words ‘American’ and European’

    i.e Relegation being a factor indicates someone with experience of relegation has brought the subject up, i.e European, rather than American

    0

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