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Who could Ashley sell Newcastle to?

Tuesday 17 October 2017

SIMON Chadwick, Professor of Sports Enterprise at the University of Salford Business School, comments as Mike Ashley puts Newcastle United football club up for sale.

“It is with a distinct air of inevitability that Mike Ashley has put Newcastle United up for sale, following an accumulation of factors that has ultimately left him ready to throw in the towel. 

“Ashley has ways had a somewhat fractious relationship with United fans and has not achieved the adoration that one suspects he might have been seeking. In addition, the financial demands of sustaining a Premier League club appear to have been an issue for him despite his not inconsiderable wealth. We also know, as Ashley has admitted himself in front of a parliamentary select committee, that pressures associated with running a business empire are probably too much for him.

“That said, Ashley is unlikely to sell the club cheaply; indeed, his decision to sell now may reflect significant interest in the club (particularly from North America). Suggestions the Sports Direct owner is about to sell to Chinese investors is, for the time-being at least, wide of the mark. With a Chinese state clampdown on overseas investments still in place, and with the 19th Communist Party Congress due to start later this week, it seems unlikely that any interest out of China will emerge (possibly until December at the earliest).

“An important factor underpinning the sale will be the role of intermediaries. A prominent broker of club deals was recently spotted at a Newcastle United game. However, rather than being contracted to the club, this person may well have been touting for business. The competition between such intermediaries for the right to seal a deal for a club is always intense. This is especially the case when there are willing buyers operating in the market; for example, American sports entrepreneur and businessman Robert Kraft has recently spoken of his continuing desire to acquire an English Premier League club.

“Newcastle United is the archetypal 'sleeping giant'. The club has a strong history and its brand therefore enjoys considerable equity. Furthermore, there is a strong, albeit sometimes latent, fanbase and a large stadium to signify what Newcastle United is and could become. Such qualities will inevitably be of interest to investors across the world, though it somehow seems more likely that a consortium rather than an individual is a more likely to buy the club.” 

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Sam Wood

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