Tuesday, September 30, 2008

Ashley slashes Newcastle price tag

Following yesterday's claim that an anonymous Nigerian consortium had submitted a bid for Newcastle United, it is now being reported that current owner Mike Ashley has slashed his asking from price from £450million to £280-300million.

According to an article on the BBC Sport website, Ashley would still make a profit of £50million if the club was sold for £300million - not bad business given the current state of the global economy! As Newcastle is a private company, Ashley has no shareholders to consult before accepting or refusing a bid.

As I recently commented on the NUFC Blog, £300million still seems like a lot of money, although it is hard to determine how much an individual club is worth. For example, Aston Villa were bought by Randy Lerner for closer to £60million - and it's hard to find a difference of £240million between the Midlands outfit and Newcastle.

The BBC article does go some way towards explaining where Newcastle's value comes from. The article reads: "Despite the club's current plight, being second-bottom of the Premier League, Newcastle could still be an attractive investment opportunity. St James' Park holds 52,000 fans, with 35,000 of them season-ticket holders, and is currently valued at around £150m.The playing squad is worth around £100m and has a wage bill of £70m, which is by no means the largest in the Premier League."

As for the whispers among Newcastle fans suggesting the Nigerian bid only exists in Ashley's mind, and is merely a method of flushing out other bidders...well, it's possible, but surely not?