Mike Ashley’s reign
On 23rd of May 2007, Mike Ashley bought a 41.6% share of Newcastle United for £55,342,223, this equated to £1 per share. By the 15th of June the same year, Mike Ashley’s stake had increased to 77.06% of the Magpies but by July he owned 100% of the club. Mike Ashley payed around £134 million to own the Premier League club. Since his takeover, Ashley has put the club up for sale two times prior to this potential takeover.
Mike Ashley has become synonymous with underfunding the club as Newcastle’s record transfer from 2005, when they bought Michael Owen for a reported £16 million, was not broken until January 2019. Miguel Almirón was the man who broke the 14-year record following his move from MLS club Atlanta United. He joined for a reported £21.6 million and has been underwhelming with two goals and an assist from 38 Premier League appearances.
However, before buying the Toon club, Ashley has a positive reputation for turning round struggling high street businesses. Having been known as a good retail businessman, Newcastle fans were somewhat optimistic when he first bought the club but running the club like a business has not worked. Ashley has forgot about the human side to running the club.
Many have labelled him a “vacant landlord” and described him as being more occupied with his other businesses and Newcastle United is just seen as another asset to him. This obviously has not gone down well with the Newcastle faithful who are a passionate set of fans. This is one of many things that have ruined the relationship between the owner and fans.
Ashley has about 130 Sports Direct signs around St. James’ Park which earnt the club a minimal amount of money due to Ashley also owning Sports Direct. His ownership of the business led to the Stadium even being renamed as the “Sports Direct Arena” briefly in 2011 which was reversed due to an uproar from the fans. In October 2012 it was confirmed loan shark company Wonga would be Newcastle’s shirt sponsors, for obvious reasons this did not go down well with the Newcastle fans and they were relieved when the sponsorship deal was not renewed after the 2016/17 season. These deals have turned Newcastle from title contenders in the early 2000s to a laughingstock by the mid-2010s.
Mike Ashley had promised to sell the club twice before. In a meeting with Rafa Benítez in 2017, Ashley promised the Spaniard he would have £70 million to spend over the next two seasons. These are just two examples of many of the promises Mike Ashley has broken during his time at Newcastle.
All of this has ruined Ashley’s relationship with the fans beyond repair meaning a sale is overdue. Despite all the negativity, he has kept the club in good financial health as the club made a profit of £18.2 million in the last financial year.
Newcastle have had a rough time since the takeover as they have only had one season in Europe, reached two quarterfinals in domestic competitions, suffered two relegations, and have had an average Premier League finish of 13th. That is grim reading especially when the club had not been relegated from the topflight in its Premier League career before that. However, this could be because between 1996 and 2006, Newcastle had Alan Shearer who retired a year before Ashley took over. Having Shearer meant they could attract big players to Tyneside like Kluivert and Gary Speed. This meant when Mike Ashley bought the club they were already on a downward slope.
Mike Ashley may have been unpopular with the fans for many reasons and once claimed Rafa should fund transfers himself, but the owner did freeze ticket prices for ten years showing he did think of the fans.
In the summer of 2015, Newcastle spent around £100 million on transfers, many of the players have gone on to be better than Premier League midtable such as Wijnaldum and Thuavin, but that season they were relegated. In the summer of 2019, Newcastle spent big, around £65 million. This meant Mike Ashley backed Steve McClaren and Steve Bruce in the transfer market but not Rafa Benítez, the most proven manager out of the three and arguably their best in Ashley’s reign. This was once again, not popular with the fans.
He is overwhelmingly unpopular with the Toon faithful and they will be happy to see the back of him. The people looking to own the club look like they will invest more than Ashley has done.
The takeover
Amanda Stavely was interested in the club back in 2017 but had a bid rejected and after more discussions an agreement could not be reached. When asked about it, Ashley said “its been a waste of time”.
Stavely came back with a consortium involving EIF and the Reuben brothers. If the £350 million takeover is successful, Stavely and the Reuben brothers will own 10% each leaving an 80% share to PIF, but who exactly will be owning the Magpies?
Amanda Stavely is a financial broker from North Yorkshire. Amanda played a big part in Sheikh Mansour’s purchase of Manchester City in 2008 as well as advising Mansour to pay £3.5 billion to gain a 16% share of Barclays Bank. Amanda earnt £30 million for her role in the transaction and by 2010, Mansour had made a £2.25 billion profit from buying the share in Barclays. This means she is no stranger to huge fees in business.
David and Simon Reuben, also known as the Reuben brothers, have a net worth of £16.644 billion according to the Sunday Times in 2019. This means they are worth as much as Man City’s owner Sheikh Mansour is worth. They have earnt most of their money through mines in Morocco, Indonesia and South Africa as well as property real estate.
PIF, Saudi Arabia’s Public Investment Fund, have been on a mission to change people’s views on Saudi Arabia. They are doing via sports as they hosted Anthony Joshua’s rematch with Andy Ruiz and look to host an F1 Grand Prix in 2023. Their chairman is Mohammed bin Salman, the crown prince of Saudi Arabia, who has a net worth of $5 billion.
The consortium does not lack money, that is for sure, but it is unknown how much money they will put into the club and how well the club will be run. However, there are a few small things they can do that will get them onside with the fans almost instantly.
Getting rid of the club’s association with Sports Direct would be the obvious starting place, this will get rid of Mike Ashley all together. As well as this, keeping the stadium’s name and keeping ticket prices frozen will make good first impressions.
As well as this, Newcastle fans will want investment in their training ground, stadium, squad, and infrastructure. This will not be easy due to FFP so to make it easier they will have to increase income. One way it can be done is through revenue, Man City did this by lucrative sponsorship deals with the company their owner also owns, hence why their stadium is called the Etihad and their shirt sponsor is Etihad Airways.
Another way to increase revenue is to reach out to the community, this would also repair the relationship between the fans and the club. This must be done for the club to progress the club rather than meandering in midtable.
Another thing the consortium will have to do is revamp the recruitment. This will mean investing in a new analytics department and getting in a director, someone to oversee the whole operation. This is also particularly important as under Mike Ashley, 2010-2017 it was Graham Carr who is now 75 years old. The mainly problem with him was he could not work a computer. This meant the analytics department would send him reports but he could not access them as he did not know how to open his emails.
The Athletic have confirmed that this is not a PR by Mike Ashley and with Ashley having taken a reported £800 million loss to his businesses due to the corona virus, he seems to be stuck between a rock and a hard place. The losses endured by the owner might mean this takeover could have come at the perfect time.
The papers for the takeover have been submitted. The Premier League take around four to eight weeks to complete their background checks and do their owners test. This means the takeover could be complete within the next few weeks.
If the takeover is done, do not expect Newcastle to be challenging for the league and spending big straight away. It will have to be a gradual climb for the Toon, the fans won’t care as long as they see the back of Mike Ashley.
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