Mark Brophy

Home » Football » Sleeping with the Enemy: True Faith magazine article Summer 2009

Sleeping with the Enemy: True Faith magazine article Summer 2009

Many Newcastle fans are hoping that the NUST’s ‘Yes We Can’ campaign will eventually succeed and rid us forever of the succession of incompentents and robber barons who have owned the club over the years. But there’s a possibility that the campaign could leave fans groups inextricably bound to an owner whose popularity is arguably on a lower par than any in memory.

Reports have claimed that Mike Ashley was prepared to sell in the summer for £100m. But as a private company wholly owned by Ashley, any sale would be entirely of his choosing and at a price that met his requirements. There’s no guarantee that even if pledges were raised for the whole £100m that Ashley would accept such a bid and walk away. He’s been interested in outside investment before and that could still be the case. An offer to buy a portion of the club with NUST’s available funds, perhaps 20-30%, might be just what he’s looking for.

Despite widespread displeasure at Ashley’s appointments, communications, way of doing business and transfers, there are few fans who would deny that he is the only owner ever to personally contribute financially to the club (though he may of course want it all back when he leaves). Indeed, he may have been the only thing to keep us from administration in the last year. He’s slashed costs at the club while good fortune has meant that those players who remained have at least been good enough to give us a chance of returning to the more lucrative top division. No-one could argue either with the stated aim of bringing through youngsters of sufficient quality to save us a fortune in the transfer market, where the club has generally been taken for a ride in recent years. No more wasters or has-beens on top money. So it hasn’t all been bad, and a partnership might suit both sides. The fans would get representation on the board and the ability to advise Ashley from inside the club, reducing the influence of the unqualified yes-men. Ashley would gain a truce with fans, an end to the divisive feud that has gone on since the departure of Kevin Keegan. It could provide his route back to acceptance by the support if all went well.

But there is danger in such a situation. Ashley has a history of ignoring or treating minority shareholders with contempt. Ever since Sports Direct was floated in Feb 2007 with Ashley retaining more than 50% of the shares, he has been in conflict with the City. Initially he refused to hold meetings with investors. A number of non-executive directors have resigned in frustration at his refusal to follow common procedures for corporate governance, and over the general lack of information provided for shareholders. In an interview he branded complaining Sports Direct shareholders “cry-babies”, displaying his contempt for their views and priorities. While a major shareholder in Blacks he threatened to fire the entire board unless they acted in the way he demanded. In short, if he owns the majority of shares in a company he expects it to be run as he pleases. Anyone who disagrees can be removed from the board, proposed fans’ representatives included. He is pleased to accept the money provided by investors, he’s just not interested in their opinions, and doesn’t feel the need to inform them of how the company they’ve invested in is being run.

In Dec 2007 a Merrill Lynch analyst advising about Sports Direct concluded that there was “little merit in holding the shares unless the management is prepared to provide materially improved visibility… and a better articulated strategic vision rather than the desire to be ‘the most profitable sports retailer in the world'”. This from a bank employed to help with the flotation a few months previously. Remember also that these are publicly listed companies, subject to the rules of the Stock Market. Newcastle United as a Private Limited Company is subject to much less stringent rules. Anyone who thinks that Ashley would listen to his new partners at NUFC if they held views in opposition to his is going against all prior evidence. If his overbearing style means that holding shares in Sports Direct has little merit, then holding shares in Ashley-dominated NUFC must have similarly little merit.

Since flotation Sports Direct has also become subject to ongoing enquiries by both the Serious Fraud Office and Office of Fair Trading, allegedly involving stakes in a failed Icelandic bank, price-fixing among sports retailers, and loans between executives of rival companies. Murky business dealings seem to be the norm.
In a perfect world, the influence of fan-appointed representatives on the board would provide the owner with a ready-made supply of knowledge, reason and advice that he has been unable to call on up to now. Were he to make use of it that would help the club to move forward and make progress in the way we all want it to. However, as fans we should be very careful who we tie ourselves to. Forced collaboration with an unsympathetic majority shareholder would serve little purpose other than to dilute any future collective protest that may prove to be necessary, and to boost Mr Ashley’s bank balance. Even if the only aim of a purchase is as a first step to complete ownership, we need to be very sure of his intentions before entering into any such part-ownership deal, because there’s no guarantee he would follow through and sell up eventually. It’s difficult to second guess a man like Ashley who says so little, and who is so comfortable  with lies when he does speak. For that reason alone, those in charge of NUST’s strategy have to be careful when they are offered a route into the club as they inevitably will be.

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