Ankur ponders a life without Freddy Shepherd.
The Newcastle United soap opera was rocked this week by the news that Sir John Hall sold his 41.6% stake to the secretive British billionaire Mike Ashley. This deal was so top secret that even the incumbent chairman Freddy Shepherd didnâ€™t know about it. The 64 million dollar question isâ€¦ who is Mike Ashley?
According to the Sunday Times rich list he is ranked joint 25th with a personal fortune of Â£1.9 billion. That is impressive considering that he is a self-made billionaire and he is only 42. Although he is a recluse, he is a smart business operator, having turned his fatherâ€™s sports shop into the UKâ€™s biggest sports retail chain. He pocketed a cool Â£929 million when his business group Sports World international, which includes the chains Sports World, Lillywhites and the Original Shoe Company, was floated on the stock market. He retains a 57% stake in the group worth Â£880 million at present. He transformed sports retail by buying ailing sports brands including Kangol, Londsdale, Donnay and Slazenger and effectively turning them into his sports chainsâ€™ labels. He realised that these brands had much higher earning potential than own-brand T-shirts with Sports World on the front. Owning well-known sports brands enabled Ashley to undercut his rivals on leading sports brands. His business ingenuity is what Newcastle needs to help break into the top four.
The first important thing to state is that Ashley is not short of cash. If he is able to complete a full takeover of Newcastle United he will have the funds to spend big. While there has been much clamouring amongst Newcastle fans for a Geordie Abramovich, this is missing the point. Whilst Abramovichâ€™s millions have helped to transform Chelsea, Chelsea have made a lot of bad investment decisions, signing too many â€˜wrongâ€™ players and often paying disproportionately high transfer fees. Although I would like to see a substantial investment in the transfer market, I would also like to see a greater investment in the clubâ€™s academy infrastructure so that more homegrown players are able to come through the ranks. Furthermore I would like to see the â€˜internationalisationâ€™ of NUFC.
One of the factors that influenced Sir John when he sold his stake to Ashley was his opinion that Ashley would be able to help Newcastle effectively exploit the overseas market in the way that Manchester United and Liverpool have done so effectively. Freddy Shepherd has never had the business acumen to be able to market Newcastle on the world stage. Although some fans argue that internationalising Newcastle will lead to Newcastle losing itâ€™s soul, this is a false contradiction. Even diehard fans have to accept that football is a multi-billion pound global business and if the fans want silverware and the best players it is imperative that Newcastle becomes a global player. I believe that under the stewardship of Ashley and Allardyce this is possible.
I truly hope that Shepherd sells his 28.9% stake to Ashley and allows Ashley to complete a full takeover. Ashley is offering Shepherd a fair price of Â£1 per share and if he sells he will make Â£40 million. He has to realise his time is up. Let us not forget that he has done very well out of Newcastle United. Since 1997 he has earned Â£8.35 million in share dividends and salaries. Whilst it cannot be denied that he has always backed the manager in the spending department; this has been at the cost of the clubâ€™s finances. Newcastle are currently Â£80 million in debt and had they been relegated this season, a fate similar to Leeds may have transpired.
The fat lady has sung and it is time for the fat controller to go. Freddy do yourself a favour and go with your big fat paycheck with your dignity in tact â€“ that would be the common sense thing to do, but we all know that Freddy doesnâ€™t have much of that!