Foreign investors interested in NUFC may want £20m off price tag

Jun 1 2009 by David Old, The Journal

FOREIGN investors are reported to be lining up a bid to take control of Newcastle United in a cut-price deal.

Senior sources at the club say there is firm interest in a buyout of owner Mike Ashley who put the troubled club up for sale at £100m over the weekend.

It is understood they are only prepared to table an £80m offer, but experts say Ashley may sell at the lower price.

Analysts say Ashley is prepared to take a big hit on the club – thought to be around £150m – to save himself greater losses if the Magpies fail to bounce back to the Premier League.

They say huge wage bill along with a big drop in merchandise and ticket sales could see the club get into serious financial difficulties over the coming years.

Richard Slack, who lectures in football finance at Newcastle’s Northumbria University, said: “Ashley has taken a substantial loss on his investment. It appears he wants to sell now to try to prevent losing any further money. With a Premier League wage structure and a massive reduction in earnings, it’s clear if Newcastle remain in the Championship there will be a substantial deficit next year. It is not just a short-term problem, there is a potential longer-term issue.”

The club’s precarious finances may put off potential buyers, as could the uncertainty of who will be in charge of the club next season. Talks with Alan Shearer are said to be in deadlock over wage demands, while Joe Kinnear could still make a return to the dugout.

Dr Slack added: “The only reason to purchase a Championship club is basically if it’s thought they are going to be promoted and earn the large revenues of the Premier League. Anybody trying to invest in Newcastle would have a big question mark whether a return to Premier League is likely. There are plenty of other clubs in a better position.