The Political Economy of Football V2

Mke Ashley is one of several bidders who have submitted an offer to buy Sheffield Wednesday.   The exact number of bidders is not known, but American businessman David Storch is to have made an offer. Charlie Methevn, formerly involved at Sunderland and Charlton, is thought to be fronting a consortium (which seems to be his role in life). Administrators Begbies Traynor will announce their decision next Wednesday.   Around £18m is thought to be a suitable price, but any new owner would need to pump in cash to get them promoted from League One next season.  They will be helped by a large and strong fan base. Ashley is thought to be front runner as he should pass the EFL test for owners and directors and he can take over quickly.  He is worth over £3 billion according to the Sunday Times rich list. He wasn't popular at Newcastle, but may want to rebuild his football reputation.

Mike Ashley has brought a High Court legal action against Amanda Staveley who led the takeover of Newcastle United, but what it is all about is unclear:  https://www.thisismoney.co.uk/money/markets/article-10381629/Mike-Ashley-vs-Amanda-Staveley-High-Court-showdown.html

Derby County's administrators have stated that there has been no approach about the club from Mike Ashley:  https://www.bbc.co.uk/sport/football/58890351 The administrators are appealing against the 12 point deduction for entering administration.

Britain's richest man, Sir Jim Ratcliffe, considered buying Newcastle United in the summer (he also looked at Chelsea), but considered that Mike Ashley's valuation of £350m was too high: Valuation halted takeover He ended up buying Nice and no takeover of Newcastle is expected any time soon.

Kieran Maguire of the Price of Football tweets, 'Mike Ashley’s Sports Direct continues its recent habit of buying back shares from the market. A further 153,000 just purchased taking total to 643,000 recently at cost of £2m. Could be for share option schemes but MA’s motives as mysterious as ever.'

The authoritative Swiss Ramble takes his usual forensic look at the recently published accounts of Newcastle United. Promotion brought the club back to 'a healthy financial position', moving from £47m loss before tax to £23m profit, as revenue more than doubled from £86m to a record £178m and no repeat of prior year £32m exceptional costs: £10m promotion bonus and £22m onerous contracts. The club's £93m revenue growth very largely driven by broadcasting’s £79m increase to £126m, reflecting vastly higher TV money in the Premier League, while commercial also increased £13m (90%) to £28m, but match day flat at £24m. However, profit on player sales dropped £39m to £4m. This was one of the lowest gains in the Premier League, in stark contrast to clubs like Liverpool £124m, Arsenal £120m and Chelsea £113m. Over the years player sales have had a decent impact on profits, contributing £184m during the Ashley era. That said, only three years were above £20m. If such profits were...

Blackpool's Owen Oyston has been voted worst English football club owner by fans, followed by Mike Ashley at Newcastle and Roland Duchatelet at Charlton Athletic: Top ten worst owners 3,376 fans from 139 clubs responded to the survey.

The authoritative Swiss Ramble compares the finances of Tottenham Hotspur and Newcastle United since Mike Ashley bought Newcastle in 2007. Both clubs have focused on profit. Newcastle have essentially broken even during Ashley’s tenure with £4m aggregate profit, while Spurs have reported an impressive £215m. Worth noting that £188m of that came in the last four seasons, when Newcastle had a £47m loss in the Championship. Revenue at Newcastle has fallen by £1m since Ashley’s arrival from £87m to £86m, deflated by the lower money in the Championship. In the same period, Tottenham Hotspur's revenue has tripled, rising £203m from £103m to £306m. In fairness, Newcastle's 2018 revenue will be much higher (£175-180m estimate). In the last 11 seasons Newcastle received a hefty £627m from central Premier League distributions, but this is £231m less than the £858m Spurs received. The two relegations to the Championship during Ashley’s reign have really hit revenue, accounting for £142...

With four weeks to go until the transfer window closes, this Newcastle United blog asks: 'Where's the money Mike?': Where's the money? 'Smaller' clubs are outspending Newcastle. The author (Elijah Newsome) comments, Newcastle are due to receive 'roughly £123m in TV/commercial money that should have arrived already or will be arriving within the next month or so. This sounds like a lot of money, but it is important to note that a lot of this money is going to go to expenses such as loans, or the current wage bill. That being said, in theory Rafa should still have a decent sized transfer kitty considering that this is only one of many revenue streams for the club.' [Although by far the most important one]. With the aid of Football Financial News the author provides an in depth analysis, despite saying he is not a football finance expert. Not surprisingly, he concludes that owner Mike Ashley is part of the problem, some might say pretty much the whole...

Rangers have been stopped selling their new kit after an injunction was obtained by Mike Ashley's Sports Direct. Sports Direct are claiming breach of contract and the court has granted an interim injunction: Battle continues

The authoritative Swiss Ramble has added his comments on Newcastle United's 2016/17 accounts. He notes, 'Revenue has decreased by £1m since Ashley’s arrival in 2007 from £87m to £86m, despite £22m more central TV money. Commercial has fallen by £13m (46%), while match day is £10m (30%) lower. In fairness, 2017/18 revenue in PL will be much higher, estimated at £175-180m.' It should be noted that if one factored in inflation, the £1m decline would look larger. Using the Bank of England inflation calculator £87m would be £110.8m in 2016 so the real decline in revenue is almost £24m. In response to a tweet from me, the Swiss Ramble pointed out that this would be an even higher figure if one took account of 'football' inflation. He also notes, 'Over the years player sales have had a decent impact on Newcastle United profits contributing £180m since 2008. The club would have made small losses without this activity until 2014.' Average net spend under Ashley ...

Newcastle United made a loss of £90.9m in 2016/17 before gains on player sales for Sissoko, Wijnaldum etc reduced that by £42.2m. Player signings were £41.4 million and player sales £69.8 million to give net income of £28.4 million in 2016/17. Turnover was down by 32 per cent from £125.8m to £85.7m. The wages to turnover ratio went up from an acceptable 59.4 per cent to 130.9 per cent. However, such increases are not unusual for Championship clubs seeking to return to the top flight. Promotion bonuses amounted to £9.9m. Matchday income was down 10 per cent despite higher attendances and more matches in the Championship due to lower ticket prices and prawn sandwich sales. Commercial income halved due to the loss of Premier League central commercial deals and TV was down 35 per cent. Commercial income declined from £25.1m to £12.1m. Mike Ashley or companies controlled by him are owed £144m. Kieran Maguire of the Price of Football has taken an in depth look at the accounts: Lovel...

It has been rumoured for some time that Mike Ashley wanted to sell Newcastle United, but now the club has been officially put on the market. After a controversial ten years at St. James' Park, which started with the Sports Direct tycoon sitting among the fans, it has all gone sour and his departure will be greeted with relief. Along the way, there have been two relegations and a controversial attempt to rename the stadium. Mike Ashley has extended only modest loans to Newcastle, preferring to spend his personal cash on property investments such as The Clearings, a former John Lewis depot in Chelsea that is being developed into fashionable apartments. His reluctance to spend money did not please the Toon Army. Mr Ashley once said that he had been advised to stay away from games for fear that he might be assaulted. He has not been to a home game this season. As the Financial Times notes today, 'Newcastle is a fiercely tribal club even by the standards of English football;...