Mike Ashley's price too high for bidders

Jul 6 2009 by Stuart Rayner, The Journal

MIKE Ashley will have to lower his £100m asking price to achieve the quick sale of Newcastle United he told fans he was looking for in May.

Legal representatives and accountants of the various consortia interested in the recently-relegated club have been poring over the Magpies’ books for the last couple of weeks before deciding whether to lodge official bids. But the biggest concern is a belief that the club is overvalued.

Relegation from the Premier League brought a massive drop in revenue, principally from television companies, and the “parachute payment” given to relegated clubs to soften the blow makes up only a fraction of the shortfall.

Even after releasing high earners Michael Owen and Mark Viduka, United’s wage bill is believed to be £65m a year and, with Ashley reluctant to appoint a manager or make any signings before handing over control, there has been little incentive for supporters to renew their season tickets.

The official line is the club is optimistic of pushing through a deal “this week”, but almost from the moment it was put back on the market at the end of last season, the mantra has been that the process was seldom more than seven days from starting. The confidentiality clauses signed by all interested parties have so far been well enforced, but the prevailing feeling seems to be that United have been overpriced by at least £20m.

Even £100m represents a major loss on Ashley’s 2007 investment, which included an interest-free loan to clear debts incurred under previous chairman Freddie Shepherd.

All the time Alan Shearer remains in limbo.

Shearer was in interim control of the first team for the final eight games of last season and is seen as Newcastle’s “manager-in-waiting”.