Not a single serious bidder for Newcastle United in 5 months.
Posted on October 23rd, 2009 | 92 Comments |
It seems Moat was all mouth and all the other ‘bidders’ were either publicity hunters, time-wasters or chancers who only expressed an interest in the hope of purchasing way below Ashley’s £100m asking price.
A few weeks ago I posted an article which quoted the Telegraph’s ‘source close to the club’ as follows:
“No one has come up with any money – no one.
“Barry Moat and the South Africans have one thing in common – they are all talking but they have no produced any money.
“There will be some preliminary conversations late in the week and I would think Barry Moat will have some provisional discussions with them although I can’t underline provisional enough.
“Until someone comes up with the money Mike Ashley has got to stay in control of the club. He has got no choice.”
Newcastle United has an overdraft, high wage bills, money owed on transfers from long ago and a £110m loan from Mike Ashley. Somebody paying £100m for the club is inheriting maybe £130-£140m of debt straight away, effectively meaning they’d need to raise the club’s value to £230-£240m before they’d ‘break-even’ on the deal. Even as a Premier League club that’s a fairly hefty evaluation, particularly when you consider they’d have to spend money on the squad to create a team capable of surviving in the Premier League too.
As a Championship club I reckon Ashley would struggle to sell Newcastle at even £50-£60m. He might get his £100m if we were promoted but I think he’d still struggle.
Football clubs aren’t known for their ability to make money and anyone looking to invest £100m for a good return would look at other options.
Manchester United – who are arguably the biggest club in the world – have made at worst an £8.5m loss and at best a £39m profit each year for the last decade. In 2007/8 Arsenal made £48m in profit but in 2006/7 they made a £39m loss. Up to 2007/8, Aston Villa hadn’t made a profit for 7 years, even under the extremely frugal administration of Doug Ellis. Chelsea, incredibly, lose £70-£80m a typical season.
People who buy football clubs usually have to want to own one for the hell of it and whilst all except the ludicrously rich will of course try to make them profitable, that can’t be an overriding objective. But of course they’d still prefer buy a club in healthy financial shape rather than one saddled with debt.
If Newcastle United represented good value at £100m – or even at £80m – somebody would have snapped it up because, regardless of anything else, it is a ‘big name’ club with a large ground, a dedicated fan base and the potential for much commercial exposure. But we remain unsold.
This presents us with a dilemma because we have an owner who doesn’t want us asking a price that nobody will pay.
NUFCBlog Author: Hugh de Payen
I'm a baby-boomer of the punk rock persuasion, currently exiled in Somerset for crimes committed in a previous life where locals keep trying to poison me with something called 'scrumpy'. Hates sprouts, coat-hangers, Cilla Black, ornaments, Steven Seagull movies and 50 Cent (he's not worth 10).
Hugh de Payen has written 634 articles on this blog.
Hugh, a nice doom and gloom article there to kick off my Friday morning. :)
Unfortunately, I cannot see any way out of this. Like many people I aired my fears on here that we would be stuck with Ashley for the rest of the season, it looks like those fears are coming true.
I blame the nights drawing in. Clocks go back this weekend too. Get ready for another NUFC winter of discontent. :o