Why Mike Ashley Wants Rangers

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News broke on Tuesday that hedge
firm Hargreave Hale had sold 4,000,000 shares at a value of £853,000 to a
‘mystery buyer’.
Immediately Keith Jackson
presumably got on the blower to Dave King who disappointedly conceded he was
not the customer in question. No, yours truly was led to believe it was further
shares being snapped up by Mike Ashley, but without being able to substantiate
this I could not go public with it.
It was confirmed yesterday by the
Club that Newcastle
owner Ashley had indeed bought those shares, taking his stake to 8.92%, and
making him second only to Laxey Partners in terms of numbers owned, and pushing
Sandy Easdale down to third.
To be exact, Ashley, through his
MASH holdings fund bought by proxy through yet another hedge fund in BNP
Paribas Arbitrage SNC, purchased 4,265,000 shares.
His overall number is 7,265,000.
So, getting away from the
numbers, let us try to examine why Ashley, a multibillionaire (reputed wealth
at just under £4B) who already owns English giants Newcastle United, is
interested in owning Rangers.
The fact is it would be more of a
puzzle as to why he was not
interested.
To begin with, since he became
the major shareholder at Newcastle,
they have won absolutely nothing. The club’s success was in the 90’s, during
that thoroughly entertaining tussle between Keegan and Ferguson. But since then, the Geordies have
failed to make a single final, far less win anything. They did have a decent
run in 2013’s Europa League, making the quarter-finals, no less, but the fact
is big football clubs’ major income is prize money. And to that end Newcastle have failed to
secure a bean in Ashley’s entire tenure.
Secondly he is a very, very
unpopular man in the north. Newcastle
supporters have never especially liked him, and downright began to hate him
after the ill-fated attempt to rebrand St James’ Park to the ‘Sports Direct
Arena’. It essentially led to ‘Ashley Out’ banners and it was fair to say
Ashley was no longer the toast of Tyneside. We will not even touch on that
‘pint’ episode.
But why Rangers? Well there
really are a lot of reasons.
First off, Rangers are in a low
place right now. Shares are going for a mere 20p, the football is ghastly, and
supporters are restless. The Club is currently stuck in the Championship with no
guarantee of promotion, and season ticket renewal levels are at an all-time
low. Ibrox is struggling to command crowds over 40,000 these days, even for the
bigger matches. You may ask ‘why would that encourage a buyer’.
Well it really is simple: Rangers’
potential global stock is gigantic, a Club with a massive fanbase – we saw
pre-season at tiny college grid iron pitch-clad stadiums for the friendlies
where the stands were lined with blue tops. Even in small American towns we had
barely heard of, Rangers fans filled the ground.
So when better to buy an ailing
‘fallen’ giant than when it is as cheap as chips, will only cost you a few
million at tops (the guy has almost 10% at barely £2,000,000) and when it is
back where it belongs your ‘pennies’ have become pounds.
Let us not forget just how good
Ashley is at business and just how valuable Rangers potentially are. His Sports
Direct brand, founded by himself as just a small shop, has grown to a
multi-billion empire. This guy, for all his personality defects, knows how to
turn something into big money. Meanwhile Rangers, as I blogged some months ago,
are at least £40M down per season thanks to loss of ST revenue, TV revenue, SPL
prize money & CL participation cash.
In short, Newcastle will never win the English Premier
League, nor will they ever get into the Champions League again. Indeed, they
may get relegated into the English Championship next season. With the right
captain at the helm, Rangers could actually be challenging for the SPL within a
few seasons and be back in the Champions League within a similar timescale.
Bluntly, Rangers are a back-door
into the CL and the money it entails (Something Newcastle will never achieve), while his own
cash will invest in the team to obtain a collection of players good enough for
that level. £100M is pocket change to the man, and he is the type of guy who
knows a good deal when he sees it. Add to that the increased revenue from
either winning or coming second in the SPL, the increased ST numbers (trust me,
they will go back up again), and the increased TV money and the turnover will
look much, much better.
He, simply, is buying Rangers
slowly, methodically, and carefully, while the Club’s stock is cheap and low,
and by the time he has fully invested and the Club is once again profitable, at
the top and in the CL, he is making big cash.
Yes, it is all about the money,
and yes, Ashley is no big Rangers fan. But Rangers need a businessman like him
capable of making unpopular decisions for the good of the Club.
Fans cannot argue ‘they have
never heard of him’ or that he is ‘a shady character’ – Ashley is pretty much
WYSIWYG.
And it is not always especially
pretty or pleasant. But damn, it is effective.

NB: Passage referring to lack of finals or CL was meant to specify during Ashley’s tenure, not a blanket period since Keegan left. Apologies for ambiguity.

22 COMMENTS

  1. Thought the whole time you were going to say this is why we don't need him until the last few sentences.

    Agree. I mean I'd rather it was Dave King making moves but I don't know why fans are so against Ashley. Like you say he sees potential in the brand and is buying while the price is low. The only way he'll get a return is if the team on the park is successful. Its not ideal having a guy who's primary objective is promoting his own business but its a hell of a lot better than the fast buck shysters that Green got on board.

  2. No good will come of Mike Ashley owning your football club. That much is certain. 5 yrs from now you'll wish the parasite had never been born.

  3. I would gladly see my beloved Newcastle back in the lower tiers of English football if it means this awful cancer of a man is out of our club.
    He has got a City divided and infighting and couldn't give a damn.
    All he is interested in is advertising for his brands, and he couldn't give two hoots for history or sentiment.
    He is buying brands all the time so watch out for you stadium to be renamed "Dunlop Arena", your shirt sponsors "English Heritage, as offensive to you as Wonga is to Geordies, and your stadium looking like the inside of a sports direct store, and all the while he will neither comment or communicate with you because you are beneath him……..This is what he has done to Newcastle.

    • English Heritage would be fine by me as Rangers and the fans
      are British not like some English haters who support teams with
      Irish roots , and it will always be IBROX no matter what

  4. Please take him off our hands. You say we'll never get into the Champions League again. We would if Ashley spent ANY money on our club instead of making a profit each season. He is the worst thing to happen at Newcastle United in the fifty odd years I have supported them.
    Like I said – take him. We'll dance in the streets when he's gone.

    • Couldn't agree more. My apathy, and I'm still a ST Holder, is nearly as bad as Ashley's. Can't seem to get excited like I used to. It seems too good to be true that this Rangers thing will ever happen though dosen't it? I think he spends all OUR money buying shares in other companies instead of strengthening our team with really class players.

  5. Ashley and Rangers are a perfect match, guaranteed champs league every season giving him worldwide advertising for his tatty sports shops. His buy em cheap methods will work a treat in the Scottish league, due to it not being very competitive but still giving the players the platform to do well and get sold for higher value after a couple of seasons.

    In the English league you cant go on selling your best players and expect to stay 10th every season but in Scotland it'll work a treat.

    Bottom line is, He will make money and Rangers(or what ever he changes the name to) will be in the champions league every season, as they were a few years back.

    Everyones a winner.

  6. I think you'll find newcastle got to two successive FA Cup finals AFTER keegan left. Not to mention qualifying for the champions league under Bobby Robson.

    Pretty shoddy "journalism"

  7. Could his family or friends be buying Rangers shares at this same time bearing in mind he cannot own more than 10 percent whilst owning Newcastle. Sell the Newcastle, and purchase shares from family/friends, control of Rangers.

  8. You overlooked two (consecutive) fa cup finals AFTER Keegan left. And Champions league under Bobby Robson.

  9. I don't mean to sound daft. But…. why do some football fans always refer to the football team they support as "their club" then just routinely denigrate any Chairman who will not spend themselves into penury for not blowing all their money….on "their club". I support Rangers and Newcastle are my "English" team and I'd rather have Ashley than some of the Jokers who have been in charge of Rangers recently. Why do these guy's want to do it? Well, Ashley was a very wealthy man before he was involved at Newcastle, but, who'd ever heard of him? These type of guy's have HUGE egos and need to be known for their success. Newcastle was the platform for that, however, Oil Oligarchs and shieks put paid to being the owner of a Top European side. Owning Rangers will cost him "wuppence" and around £30/40 mil will have them regularly in the Champions League, if only at the Group stages. That's why they interest him, and why I'd welcome him, until he needs another shinier toy!

  10. On what basis do you claim Newcastle will never get back in the Champions League. Under MA's ownership I would agree but never, you dont have a crystal ball.

  11. Ashley is like a tapeworm – he'll suck up all the good in your club for his own benefit, and leave the club empty. He is unique in that he uses the club purely to advance his business – football sentiment and glory mean nothing to him. As others have said – take him, he's yours. Newcastle will only recover when he's gone.

  12. I for one don't really care for Mike Ashleys money – He's only ever been interested in one thing business wise and that is to make money. You say£100,000,000 is pocket change to him – then why does he not invest it in the Newcastle Utd playing squad and management team? Nobody in their right mind will ever invest that sort of money at Ibrox. We're stuck in a situation of our own making, fans divided, rival boardroom factions, players not performing and the rest of Scottish if not British football looking on not with glee but with absolute bemusement. The sooner we get rid of this " Back where we belong mentality – Champions League and all " and just try to concentrate on the here and now the better. When I began watching Rangers they were a Football team with some great players, some good players and the occasional journeyman pro – but all the teams I've watched being built had character. The last few seasons have seen an absolute underwhelming first eleven and still we call for match postponements due to Internationals being played, it's embarrassing. Every week there's new tales of investment and the only truth of the matter is money continues to haemorrhage from Ibrox every day – that's the rotten part, for every £1 going in £5 is going out.
    We need to stop dreaming of a rich sugar daddy from down south bailing us out cause it aint gonna happen.
    Whyte took us for mugs, Green took us for mugs, Imran took us for mugs, Stockbridge did the same too – the list goes on and on and you still think Ashley owes us some sort of favour and should chuck £100M at us for players – seriously.

  13. After Murray, Whyte, Green, Stockbridge et al, I would have thought you'd be more careful what you wished for! It seems you would welcome with open arms a glib liar like King or a unempathetic parasite like Ashley, assuming they will bail you out. I think Rangers fans should listen very carefully to the views of long term Geordie fans before taking a position. One thing is very clear – Ashley will not give a groat for the supporter's ambitions, regarding them as beneath contempt.

  14. 'Even in small American towns we had barely heard of, Rangers fans filled the ground'. Eh??? The reported crowd for Rangers entire 4 match North American tour was less than 40,000! Please check facts before

    • How do you know the crowd size, were you there , i don't think so , they were big crowds at all the games. Come on the Rangers , we are the people

  15. As a business student I've got to admit there a few facts that seem to have been overlooked and to be very honest I believe this has been caused by your sheer passion, anticipation and assumption that your team will return to their former glory.

    First thing I believe you have overlooked is the fact that for ashley to own a percentage of the club that would "be worth more then newcastle" he would first have to discard of the club he has invested a lot of money into, as he cannot legally be a majority active investor in two clubs at one time due to legislation.

    Second, if ashley was to try to takeover rangers it would be in a swift aggressive move at a time when the share price is not only at it lowest point but when the club has no foreseeable exit plan from its financial woes. Where is the sense in acquiring an X amount of shares at one price for, exactly as you said above, rangers will be back to their glory days in a few years, meaning that the price will rocket based on their success, therefore creating a sense of urgency regarding shares available and also driving the price through the roof.

    Third, I honestly find it hard to believe Rangers even if they reach the champions league final and win it, which is extremely unlikely, are worth more in revenue terms than newcastle. TV revenue in England alone is enough to make sure he keeps his original investment. Have you ever looked into how much the RELEGATED teams get in England upon the season finishing?

    Fourth, as for ashley being capable of making unpopular decisions for the good of the Club. What selfless effort has he made in an effort to resurrect his original investment in newcastle?

    As for your belief that mike ashley is SLOWLY acquiring the club is in short a rather uneducated guess at what is happening at Ibrox. If a man as talented an investor as ashley, who you admit take nothing and makes it something, would he not look to acquire as much as fast as possible in order to ensure there is as little resistance as possible from the vultures that have circling edminston drive for some years now.

    I must stress I am not degrading or defaming your article whatsoever but coming from hopefully a potential investor of the future who, may I add, is not "sat on either side of that big bigoted fence" we have in Scotland, I can honestly hazard a guess that you are infact another part-time analyst/part-time football legal expert.

    Perhaps if you spared us your fantasy stories of 40,000 crowds in the US and spent more time researching or even partially studying the thousands of case studies online regarding venture capitalism.

    In short, ashley isn't planning a slow and sure fire takeover, infact I could bet the neutral coloured shirt off my own back that he is purely doing what investors do…… investing.

    Nothing more, nothing less, nothing then, nothing now

  16. Please give yourself a rest
    "Back in to the CL where the real money is"
    RIFC would have to win the CL at least twice for Ashley to get his £100m back. In the EPL NEWCASTLE get roughly £100m every year from tv and sponsorship, I do agree with you though Mr Ashley will make money from RIFC but it won't cost him £100m for the pleasure.

  17. We need change and we need it now I hope Ashley does invest ,as for 're naming the stadium I don't have a problem with that because no matter what they change it to it will always be known as "ibrox" to me,so let's hope he does come in cos the first thing I would do is sack mccoist he can't take us forward he is clueless as a manager but a total legend as a player personally I think he should walk away now before the fans start protesting to get him out

  18. I could answer to every one of these 15 replys but don't have enough time, so I will say this if mike ashley takes over RANGERS he will put us on a sound financial footing & will not suffer fools like the sos or union of dave king worshippers, does the sos think mike ashley really gives a rats ass that they are going to boycott his stores no he won't, now in the last couple of days the best line I have heard is houston we have a problem say would you like a man in charge who had the chance to put 800k into our club but instead gave it to investors who don't have our club at heart, incidentally these investors were brought in by malky the alky who is on houstons side apparently, anyway the sos have polled their members to see if they want to boycott our home matches, mmm is that stopping our club getting much needed money one things for sure the sos don't irony do they

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