No reason for Ashley to sell Newcastle…yet

Yesterday there were strong rumours coming out of Iceland that Mike Ashley was ready to make a profit on his investment in Newcastle United and wanted to sell the club to an Iceland-based consortium of businessmen.

Rubbish? Definitely so. Ed Harrison over at the Newcastle United blog examines this in more detail, but in essence, here’s my take on it:

Businessmen are investing in football clubs for the long haul (think major real estate investments), not for annual profits or for short-term flip deals. Ashley’s investment in Newcastle United is no different (and actually quite similar in aims to the ones made by Abramovich, Glazers, Liverpool’s sugar daddies and Magnusson).

The news sources can’t be trusted – presumably because Iceland is better known for it’s gorgeous and stunning women and it’s weather as opposed to football investments and solid business deals (Magnusson’s biscuit empire notwithstanding).

Ok, that last one was a cheap shot – what I think (after going through the tips we received through the Newcastle United blog) is that there have been discussions going on, or at the very least, an approach may have been made to sound out Ashley’s position at Newcastle United.

Apart from that, there’s nothing concrete on the table. Sky is taking the cue from it’s Icelandic counterparts and reporting what they’re reading in the tabloids, so it’s not exactly exclusive stuff.

The bottom line is that while it would be a good piece of business for Ashley in the short run, the man could stick with Newcastle, help the club improve and sell it for twice (if not thrice) as much as he bought it for within 5 years. Yes, 5 years. Less if Newcastle are wildly successful in that time.

From a business point of view, it’s worth sitting on this one and waiting it out. After the lengthy and complicated process Ashley went through to buy Newcastle United, it’s highly unlikely that he would bail out now. And I doubt that anyone would be willing to pay enough to get him to sell at this point either.

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