I won’t deny that I read the news regarding Sports Direct falling out of the FTSE 100 with a degree of satisfaction. News that Sports Direct has lost 40% off their share value gave me something of a boost if I’m honest and such is the toxic relationship Newcastle United’s supporters have with the club’s erstwhile owner I don’t I will have been the only one.
I really do applaud the excellent journalism provided by The Guardian and I’d encourage you all to read the report here
It will be instructive to observe how the titles in the Trinity Mirror stable respond to this news given the curious relationship that apparently exists between the two businesses.
Further to this is news that the financial arrangements between Ashley and Sports Direct may be changing. As per
Ashley’s arrangement with Newcastle United, Big Mike has acted as Sports Direct’s bankers. They have been loaned money by Ashley and this has obviously been at more generous rates than which would have been provided by the banks.
Clearly, Ashley makes these arrangements because it is in his own interests to do so. Let’s never forget Mike Ashley’s principle motivation in life is to accumulate as much money as he can and he has demonstrated a ruthlessness in which to do so as numerous groups of workers will testify too.
We now learn Ashley’s provision of liquidity for Sports Direct may be over. Sports Direct may now have to go to the banks for money. There is possibly two reasons for this. Firstly, Ashley’s own financial position may not be as strong as it was and he can’t provide that service any longer. The second scenario is more compelling and that is Mike Ashley now considers Sports Direct as a risk i.e. its declining position doesn’t make it a good bet. Mike Ashley may fear he may not get his money back from the business he founded.
I concede this is all speculation and I’ll be delighted to have counter arguments and different opinions explained in the comment boxes below this piece.
Tectonic plates with Sports Direct and Newcastle United might be moving. Ashley has previously been able to boast to shareholders that Sports Direct’s association with Newcastle United has brought the company significant benefits (for which United has received no recompense). I don’t think Ashley will be able to make those boasts as convincingly given the profile Sports Direct has achieved through its association with a major Premier League club (don’t laugh) has also brought it massive media scrutiny of the type led by The Guardian above. The constant stream of protests around United by supporters has played its part, in my opinion, in attracting that attention and it may well be Ashley will have more trouble selling this fantastic arrangement to shareholders who are seeing the value of their stakes tanking on account of the business’ poor reputation.
All of this has the whiff of Ratners about it for those of us around in the 1980s. Not all publicity is good publicity it seems. Sports Direct had a poor Christmas sales period and its share value is tanking. The business looks to be in rapid decline.
Ashley appears to be engaged in something of an unconvincing PR exercise. Keith Bishop PR is going to have his work cut out. Previously, Ashley has been dismissive of any approaches to discuss business practices to the point of rudeness. Newcastle Central MP Chi Onwurah had the invitation she made to Mike Ashley for tea in the House of Commons thrown in her face courtesy of his Barrack Road go-fer, Lee Charnley. We also hear of Derek Llambias ranting and raving and abusing, Nick Forbes, the Leader of Newcastle City Council in his own office. This is a man who is famously described as not being afraid of parking his tanks on his rivals’ lawns. Now Ashley has a road to Damascus moment and is reaching out to politicians and reforming working practices etc. Any of you convinced?
We have also been tipped off that Ashley’s growing business interests are in the London Property market and he has an interest in land development in Chelsea that will provide him with an eye-watering return over the next five years. That may prove to be more attractive than dressing every Magistrate’s Court in the land.
What does this mean for Newcastle United? For me it can only be positive in terms of an exit for Mike Ashley, a man who has demonstrated repeatedly he is an abysmal steward of our beloved club.
There is money interested in coming into football as Everton’s investment is demonstrating. Whether that means the environment is changing for football and Newcastle United might have a change in ownership we can only hope ….
Michael Martin – Follow on @tfeditor1892
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