Mike Ashley’s reign at Newcastle United has been the subject of an article in this months WSC by Paul Brown. NUST were asked to provide comment and the article is published in full below.
Among the shareholders attending the Sports Direct AGM on September 12 were several Newcastle United fans. Also in attendance was Mike Ashley, the Sports Direct CEO and Newcastle United owner, but fans were not able to question him on the relationship between the two businesses. During a rushed meeting, the board allowed no questions from the floor and departed after just 15 minutes. Ashley is under pressure from shareholders, suppliers, unions and MPs following repeated warnings of mismanagement
and poor working practices, and due to the fallout from the recent purchase of House of Fraser. A series of newly-coordinated protests from Newcastle fans seems the last thing he needs.
The protests are being led by the recently-formed Magpie Group, a coalition of fan organisations including the Newcastle United Supporters’ Trust (NUST), the Ashley Out campaign, True Faith fanzine, and stadium display organisers Wor Flags. At its first public meeting, a positive and well-attended gathering held in the week before the AGM, group organisers handed out factsheets detailing Ashley’s litany of offences during his 11 years of ownership, ranging from a lack of investment in players and facilities and the stifling of commercial income and matchday revenue to renaming St James’ Park the “Sports Direct Arena” and appointing Joe Kinnear as manager (twice!).
The facts do not make good reading for Ashley or the handful of pundits who repeatedly defend him in the media. Ashley bought the club in May 2007 for £134m, and inherited £77m of debt. According to the club’s latest accounts, by 2017 that debt had almost doubled to £152m. Sports Direct has never paid anything for the advertising that blankets St James’ Park. Commercial income has halved under Ashley’s ownership, while matchday income has fallen by a third.
Things have gone backwards on the pitch, too. In the 11 years before Ashley, Newcastle qualified for European competition ten times, reaching the Champions League group stages twice. In the 11 years since, the club has qualified for the UEFA Cup only once, and has been relegated from the Premier League twice. As for investment in players, a much-shared statistic shows that, since promotion in the summer of 2017, Brighton’s net spend is £110m, Huddersfield’s is £78m, and Newcastle’s is £1m.
Sports Direct controls the club’s retail operations, and in the five years to 2017 the club made a net loss of £5.5m from the arrangement. Ashley has purchased land behind St James’ Park’s Gallowgate stand, for a knock-down price of £6m, and obtained planning permission for a £70m residential development, effectively blocking any future expansion of the ground. The latest accounts for Ashley’s MASH Holdings company, through which he owns the club, were not published as required in January and are long overdue. Meanwhile, the club is under ongoing investigation by HMRC for suspected tax fraud.
“The owner clearly doesn’t care about the club,” NUST board member Colin Whittle tells WSC. “He does, however, care about his retail empire, and that’s what we’re concentrating on.” Protests outside stores and online are targeting Sports Direct and its many subsidiary companies and brands, including Flannels, Cruise, Slazenger and Firetrap, in an effort to disrupt the use of Newcastle United as a marketing tool. Part of the action involves spreading awareness of just how many brands are owned or part-owned by Sports Direct.
The protests have been given some urgency by the situation regarding Rafa Benitez’s contract, which expires at the end of the season. Fans fear Benitez will leave due to the lack of support from Ashley, prompting the #IfRafaGoesWeGo movement on social media. “To many of us it’s the manager who is holding things together,” says Whittle. “This is galvanising fans in a way that we haven’t seen before. People aren’t prepared to allow Rafa to go without a fight.”
Protests outside Sports Direct stores have made national headlines, as has the creation of a website, sportsredirect.com, which directs shoppers to alternative sportswear retailers. The Sports Direct Twitter account has effectively been silenced after a barrage of disruptive responses from fans. So has the account for Keith Bishop Associates, Ashley’s PR firm. Shareholders and suppliers are also in the firing line. “Sports Direct’s share price has dropped,” says Whittle, “and while this is due to many factors, continued pressure from Newcastle fans is playing a part. We’d encourage fans of other clubs to support us. It’s hoped that he’ll eventually consider ownership of Newcastle more trouble than it’s worth.”