Newspaper article The Journal (Newcastle, England)

Club Too Much of a Drain on Ashley's Resources; the Expensive Business of Running a Football Club May Be Just Too Much for Mike Ashley after Seeing His Pounds 2.2bn Fortune Shrink by Two-Thirds in the Last Two Years. Peter McCusker Reports

Newspaper article The Journal (Newcastle, England)

Club Too Much of a Drain on Ashley's Resources; the Expensive Business of Running a Football Club May Be Just Too Much for Mike Ashley after Seeing His Pounds 2.2bn Fortune Shrink by Two-Thirds in the Last Two Years. Peter McCusker Reports

Article excerpt

Byline: Peter McCusker

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

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

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

Buying Newcastle United in September 2007 has cost Ashley in the region of pounds 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 pounds 130m and pounds 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 pounds 20m to pounds 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 pounds 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 pounds 300m on the club, but now he may well be struggling to find the pounds 20m to pounds 30m to support transfers or even meet the day-to-day running costs." Earlier this year two senior Newcastle United figures shed some light on Ashley's financial position.

In February Derek Llambias Newcastle's managing director, while reiterating that Ashley is still a "billionaire" stated the value of Ashley's interest in Sports Direct had fallen from pounds 2.5bn to pounds 200m (the share price at the time was around 60p compared to last night's 86p).

And this came after comments from the then manager Joe Kinnear, following the defeat to Manchester City in January. …

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