Latest News 24/08/2007

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Is Ashley in for the long term ?

Discuss on our fans forum.

What is Mike Ashley’s game plan with Newcastle United, we examine the facts

See the latest news on Mike Ashley in our Mike Ashley Diaries

In order to answer this question it’s probably best to know what is Mike Ashley actually like and why did he buy Newcastle.

Previously he was famous for being a recluse, the second Howard Hughes where even his employees and neighbours had never seen him. However since floating Sports Direct as a public company and buying Newcastle United the national press have been monitoring his movements quite closely and it is said he is becoming slightly more used to his new found publicity.

He says he is only interested in his business and his 3 teenage kids since his £50 million divorce. Though it has been reported he now has a new partner Yvette Elmore. One of his best friends is Tottenham vice chairman Paul Kemsley and he seems to also be a close associate of millionaire entrepreneur Sir Philip Green.

He comes from a tight knit family, his brother is IT Director at Sports World and his parents mortgaged their house to start him off in business when he was just 16. Born in Walsall, grew up in Burnham near Slough and now lives in Totteridge, North London. It has been darkly rumoured that he might be a Spurs fan !!!

On taking risks he has been quoted as saying “Many of the most successful people I know are gamblers,” he said. “My view is that when you get up on Monday morning you are in the risk business. But there is a fine line between an entrepreneurial investor and a gambler.”
On running Sports Direct “I am building a long-term business, I have built the company over 25 years and I am planning the next 25 years”

So why did he buy Newcastle United when he could have easily bought into Tottenham (the club he’s rumoured to support), with his friend Paul Kemsley and not had half the hassle. Probably because he is an astute business man, has recognised that Newcastle are a sleeping giant and there was an opportunity with the Hall’s wanting out to get it at a good price.

The TV deal for the Premier League has made it the second richest sports league in the world behind NFL. The winners receive £50 million and even the last placed team get £26.8 million. In addition if you get in the Champions League and do well you can get an extra £20 million in TV rights.

So if Mike Ashley takes the long term view as he is taking with Sports Direct then he knows Newcastle have the fan base to become a top European club and the potential to make circa £70 million a year in TV rights alone.

His take over document quoted “before finalising the amount he is willing to invest, Mike Ashley will want to undertake a thorough stragetic review of Newcastle United, including its current infrastructure, contractural arrangements, playing staff and financial position.". This he is now doing with his financial advisors Kaupthing.

So why all the rumours ? Chris Mort says that they receive 3 enquiries a week from people wanting to buy into the Premier League.

Mike Ashley seems to be a smart operator, a risk taker but also someone who likes to build for the long term.

Our guess is he’s bought Newcastle United because as we all knew, it was a good opportunity. Now he’s done the hard work of getting rid of Freddie Shepherd and de-listing from the stock market the club is already worth a lot more than he paid for it.

We think Mike Ashley’s bought for the long term as recently declared by Chris Mort “He [Ashley] has bought an entire asset here and the plan is to develop it over a lengthy period of time, not turn things around quickly and sell it on again,” he said. “We are here for the long term, this is a long-term project.”

However as a source stated “Ashley had also discussed a sale with a potential Chinese buyer, but had decided to refinance the club instead”. Like any good business man, he wuld have to think about any offers made, especially at such an early stage before he gets heavily into the project.

So, in summary we believe Mike Ashley has ambitious plans to sensibly run Newcastle United as a business, make them one of the top teams in Europe, make a lot of money out of them and have a lot of fun along the way.

So we’re right behind him in that, cmon Mike Ashley’s Black n White Army !!!

Discuss on our fans forum.