I had been predicting this for quite sometime. Mike Ashley would face tremendous problems selling of Newcastle at his asking price.
Barry Moat the businessman interested in buying out Newcastle has balked at Ashley's valuation of £100m. Moat is offering £70m. The two sides were looking to resume negotiations this Friday and it was rumoured that the club would eventually go for £80-£90m. But now it is being reported that Ashley has had a change of heart and is taking the club off the market. If the takeover talks fail then so go the chances of an Alan Shearer return.
The annual wage bill of £65 million hangs like Damocles sword over all these negotiations.
Does Ashley want to sell the club? I think not. My theory is that he is going to play out this waiting game while he becomes a less divisive figure. Call it attrition. With all the speculation, rumours, half truths, at the end of the day there is still Ashley. Fans want stability.
Then there is the late Sir Bobby Robson who laid the blame for Newcastle's travails on Dennis Wise, the awol director of football and not on Ashley. This is a small modicum of vindication for the embattled owner. The wool was pulled over his eyes by people who should have known better which players to get. Whether you believe it or not, Ashley's complicity has been washed over by the statement of a legend. I am sure Ashley revisited his article. If you look at Ashley's statements in the past there is a sense of disbelief that he was so maligned by fans. He was very quick to mention bailing out the club with his own money and taking on its considerable debt.
Ashley's attention maybe directed elsewhere as Sports Direct International, the chain of retail stores of which he is an owner became victim of Iceland's financial meltdown losing 91% of its profitability and now facing charges of unfair competition through the acquisition of 31 from rivals JJB in towns where they already have a presence. He was ordered to sell five stores by competition regulators but just like the club has yet to find a buyer.
What might give Ashley hope is, Sports Direct has also been tremendously successful over the long haul and so far there has been a slow but unmistakable uptick in stock prices. Analysts are now projecting a 10% growth rate for 2011 and so far this year revenues have increased 8.56% over last year even as profits have tumbled. Analysts now rate SPD as a buy over sell with the consensus being a hold stock. In the five year record SPD has outperformed the FTSE 100 with a +393.06% to +9.07% rate of return. New stores are projected to open up in the North East and the sports jersey sales have been fairly strong. For Ashley this glimmer of hope lessens the pressure to sell the club.
I think most Toon fans will make do with Ashley as owner as long as he keeps a low profile, wears a purdah, and does not go out drinking beer with them. The team acquitted themselves well against West Brom in their Championship season opener with a draw but they need an manager. There is talk of bringing David O'Leary. The ex-Leeds and Villa manager is well known for first year results and nurturing young players. However his long term prospects are quite mixed.