Club too much of a drain on Ashley's resources

Jun 2 2009 By Peter McCusker, The Journal

THE expensive business of running a football club may be just too much for Mike Ashley after seeing his £2.2bn fortune shrink by two-thirds in the last two years. Peter McCusker reports.

WHEN Mike Ashley floated his Sports Direct company on the stock market in February 2007 he was worth over £2bn.

He had £929m in cash he pocketed selling 40% of his stake in the company and £1.3bn in his remaining 60% stake.

However his cash pile may now be down to £300m and the value of his stake in Sports Direct is now around £330m as its share price has plummeted.

Buying Newcastle United in September 2007 has cost Ashley in the region of £300m in the last two years – and a reported speculative spread betting punt on the share price of HBOS has said to have cost him anywhere between £130m and £300m.

One football finance expert, who would not be named but has hands-on experience of running football clubs, believes Ashley is now desperate to offload Newcastle United, as finding £20m to £30m for transfer fees and running the club may be too much of a strain on his shrinking wallet.

He said: "Ashley may well be down to his last £300m of cash. He is not short of assets but you cannot buy a McDonald’s with a house. He hasn’t got the cash he needs to run Newcastle now.

"He’s spent around £300m on the club, but now he may well be struggling to find the £20m to £30m to support transfers or even meet the day-to-day running costs."