Gallow(gate) humour

So, Mike Ashley has reportedly lowered the asking price for Newcastle United from £450m to somewhere more in the vicinity of £300m. This, a mere 15 months after he bought the club for £133m and paid off a further £110m in debts, would still net him a profit of £50m or more.

Doesn’t your heart just bleed?

Now one could argue that Ashley is entitled to seek a return on his investment. However, as the small print in financial services ads is so fond of pointing out, investments can go down as well as up if their performance is poor or if they are badly managed.

On both counts, Ashley and his advisers have failed miserably.

Poor performance? Newcastle have for 40-odd years been a ‘nearly’ club, always promising much but never quite delivering the success their many passionate fans believe is due to them. In the space of barely a year, the quality of their football has nose-dived, they have flirted with relegation (and are already threatening to do so again), they have been caught up in the circus that is Joey Barton, and they have lost two managers, Sam Allardyce and Kevin Keegan. Now to lose one could be seen as an accident; to lose two very much seems like, as the Gallowgate faithful have repeatedly pointed out, “you don’t know what you’re doing”.

As for bad management, well. Having a London-based executive director (football), Dennis Wise, who has zero rapport with the Newcastle-based manager, with unclear lines of accountability and decision-making: not good. Writing an open letter to the fans which amounted to 1,500 words of “woe is me” and served to further destabilise and devalue the club he is trying to sell: plain stupid. Need I continue?

Don’t get me wrong, Mike Ashley is clearly an astute and very successful businessman. However, as the owner of a football club, he might as well turn up wearing a big pointed cap with a ‘D’ on the front. He failed to conduct due diligence on an acquisition – and as a result was unaware of the club’s £100m-plus debt. He has consistently attempted (and failed) to portray himself as a man of the people, to the extent that many of his executive decisions seem to have been made to placate the fans, rather than because they make sound footballing or business sense. And then, having pointed the finger at everyone but himself, his opening negotiating position was to ask potential buyers to double his money at a time when he has clearly devalued the club, rather than adding value to it.

Mike Ashley is not automatically entitled to a profit. However, such is the cachet (and the potential commercial benefits) of owning a Premier League club, he will undoubtedly make a tidy one, despite the fact that all he has achieved in the past 15 months is to take one large, underachieving football club and turn them into a national laughing stock.

In the same way that investment bankers shouldn’t be making fat-cat bonuses at a time of global financial crisis, that is just plain wrong.