Mike Ashley

Michael James Wallace Ashley (born 1963 in Burnham, Buckinghamshire) is a English millionaire retail entrepreneur, in the sporting goods market. He is also the owner of Newcastle United after paying around £135 million to buy the club.

Ranked 60th in the 2009 version of the Sunday Times Rich List with estimated wealth of £700 million, Ashley was seen as an intensely private person, who never attended industry functions or gave interviews.^[1] Philip Beresford, who compiles the annual Sunday Times list, said neither he nor his staff have ever managed to contact Ashley, and describes him as "easily Britain's answer to the late Howard Hughes."^[2] However, since Sports Direct International Plc went public, and his purchase of Newcastle United where he took to sitting in the stands with fans, Ashley has taken on a more public and accessible persona. However since the departure of Kevin Keegan as manager and the club's relegation, Ashley has only made low key appearances when attending Newcastle matches.

Early life

Ashley grew up in Burnham, Buckinghamshire, where his parents still live in a modest bungalow. He was educated at Burnham Grammar School. He has 3 children Matilda, Anna and Oliver. He was divorced in 2003 from his then wife Linda, a Swedish-born economics graduate, for a reported^[3] settlement of £50 million. He is a former county squash coach.

After leaving school at 16, in the 1980s Ashley opened his first Sport and Ski shop in Maidenhead followed by others in and around London. The chain expanded quickly funded by private money, and by the late 1990s had rebranded the chain Sports Soccer and opened over 100 stores across the United Kingdom. As a sole trader and not having to file accounts at Companies House, little was known about him. The business became a limited liability company in 1999.^[4]

Sports international

Nottinghamshire based group Sports Direct International Plc, with headquarters in Shirebrook, Mansfield has over 400 UK stores including the chains Sports World, Lillywhites (acquired in 2002) and Gilesports. The group employs more than 20,000 people in the UK and at stores in Ireland, Belgium and Slovenia. In 2006 it overtook JJB Sports as the UK's largest sports wear retailer.^[5] In mid-2006 it was also revealed that Ashley had held talks with John Hargreaves, founder of Matalan on both taking a 25% stake in the retail business and installing mezzanine floors in larger Matalan stores, on which Sports World outlets could be operated.^[6].

Ashley has made his money by buying brands. The first major brand he bought was Donnay. In February 2003 Ashley bought the Dunlop Slazenger brand for £40 million, followed up by acquiring outdoor gear manufacturer Karrimor in March 2003,^[7] Kangol for £10 million,^[8] boxing brand Lonsdale, most of these brands were bought from distressed sellers. After considering a takeover,^[9] Ashley took a £9 million stake and signed a long-term deal with Umbro.^[10]

Ashley has a 29.4% stake in Blacks Leisure Group, the owner of Millets and Mambo^[11], and is thought to hold stakes in JJB Sports and 19% of JD Sports.^[12] "He likes to park his tanks on peoples' lawns", said a banker ^[13].

In late November 2006, a number of business newspapers reported that Ashley was looking at an IPO of Sports World International. He hired Merrill Lynch^[14], who initially valued the group at up to £2.5bn ahead of the flotation on the London Stock Exchange ^[13]. Floated at 300p, the shares initially performed poorly, on sentiment surrounding the sports retail sector, complaints about poor investor relations management, and concerns that the group's close-to-the-wind sales practices, such as "closing down" sales at branches that don't actually close, would receive greater scrutiny now it is a listed company. These concerns have proved to be well founded, as its share price has continued to plummet since floating, being priced at only 46p as of November 2008, fuelling suspicion and resentment of Ashley.

Marketing tactics

Customers are also drawn into the store by almost margin-less promotions on perceived high-value brands like Nike trainers and Adidas tops, making money for Sports World when they also buy an own brand item marked up at a substantial margin.^[7] The use of the brands are an important part of the business model, with Ashley making £10m from selling the intellectual-property rights to the Slazenger Golf brand to arch-rival JJB in 2005.

Whistleblower

Ashley turned whistleblower on industry rivals in 2000, handing the Office of Fair Trading evidence of business meetings held by sports retailers to fix the price of football shirts. Ashley attended a meeting at the Cheshire home of David Hughes, the chairman of now bankrupt rival Allsports. At the meeting Dave Whelan, the founder of JJB Sports, reportedly told Ashley: "There's a club in the north son, and you're not part of it." ^[15]

Newcastle United

Wikinews has related news: Ashley gives Newcastle £133m buyout offer

On 23 May 2007, in a surprise move, Ashley bought Sir John Hall's 41.6% stake in Newcastle United at one pound per share, for a total cost of £55,342,223^[16] via his company St James Holdings Ltd. Under the terms of UK takeover law, having purchased more than 30% of a listed company, he was obliged to make an offer to buy the remaining shares at the same or a greater price.^[16] On 31 May it was reported that the Newcastle board were considering Ashley's offer.^[17] On 7 June 2007 it was confirmed that chairman Freddy Shepherd had agreed to sell his 28% share to Ashley, which left Ashley free to take control of the club.^[18] As of 15 June 2007, Ashley owned a 77.06% stake in Newcastle United and was on course to withdraw the club from the stock exchange having surpassed the 75% threshold required.^[19] 100% acquisition was achieved in July with Ashley paying a total of around £134 million to buy the club. Ashley appeared to have saved the club from certain financial ruin by paying off large sums of debt inherited from the previous regime^[20], although he was criticised for not doing due diligence when buying the club, as he subsequently revealed he had been unaware of issues such as the upfront payment of club finances such as the Northern Rock sponsorship, and the presence of outstanding liabilities for long past player transfers.

Ashley's ownership of the club was initially popular with fans, despite press scorn for his unconventional approach, by installing Chris Mort as chairman to run the club, while Ashley acted as one of the fans, drinking in local bars and clubs, and watched the team from the stands with the supporters wearing the team shirt. This caused fierce local rivals Sunderland AFC to publicly refuse to give Ashley permission to wear it in the Stadium of Light corporate box for the November 2007 Tyne-Wear derby. Instead of donning more appropriate attire, Ashley chose to take his usual place among the travelling fans for the game. An apparent anomaly with the fans was the choosing 'Smith 17' as the number of his shirt, after a squad player Alan Smith he admired and 17 being a lucky number for Ashley. Ashley's popularity rocketed with the return of Kevin Keegan on 16 January 2008 as manager to replace the previous regime's relatively unpopular choice Sam Allardyce. His Smith 17 shirt was promptly replaced by a "King Kev 1" shirt.

On 30 August 2008 Ashley was shown on live television downing a pint of beer while with fans in the away stand during Newcastle's game against Arsenal F.C. in London, contravening Premier League licensing rules stating that alcohol may not be consumed in sight of the pitch. Ashley subsequently "received words of advice" from the police during the game. A Newcastle United statement declared that Ashley had been given the beer and told that it was non-alcoholic despite the fact that Arsenal do not sell non-alcoholic beer at their stadium.^[21]. This was the beginning of the dispute between Ashley and the club's supporters.^[22]

As the transfer window closed at midnight 2 September, rumours started to appear in the press stating that Keegan was extremely unhappy with Director of Football Dennis Wise' interference in team matters. The following morning Keegan had a meeting at St. James Park with Wise and Managing Director Derek Llambias, it is unknown what exactly was said in the meeting but witnesses saw Keegan storm out of the meeting claiming to be sacked.^[23] Keegan drove to Manchester to consult with the League Managers Association chief-executive Richard Bevan, while in this meeting it is thought Ashley found out from Llambias of the row and attempted to contact Keegan. On 4 September 2008, Keegan resigned from the club following days of talks with the board of Newcastle United headed by Llambias.^[24] This led to prolonged protests by fans directed chiefly against Ashley and Wise, being dubbed the "Cockney Mafia" by one banner paraded around the ground which was subsequently repeated in the press. The club was warned by the League Managers Association on 5 September 2008 to develop a structure which would satisfy the next manager to replace Kevin Keegan to avoid a similar situation repeating itself and damaging the club's image.^[25]

On 14 September 2008 Ashley made a statement announcing he had put the club up for sale, a day after the first home game since Keegan's resignation, which Ashley did not attend. In his statement, Ashley stated "I have listened to you. You want me out. That is what I am now trying to do."^[26] He also stated that while he had the utmost respect for Keegan, he no longer wanted to subsidise the club due to believing it would not be safe for him or his family to attend matches in future. Ashley appointed Joe Kinnear to take temporary full-time charge of the squad as he began his search for a new owner.^[27] In the following weeks, after an apparently unsuccessful trip to the Middle East to reportedly solicit potential buyers, Ashley later instructed London law firm to handle the sale of the club. Ashley's actions and subsequent media coverage of fan reaction saw the creation of a new organisation, the Newcastle United Supporters Club, to properly represent fan's views to any future board. Interest also mounted around the feasibility of a fan buyout of the club, seeing the launch of the Newcastle Fans United group. On December 28 Ashley announced that the club were no longer up for sale, after he had failed to find an acceptable buyer.^[28]

In January 2009, it was reported that interim manager Joe Kinnear had been offered a full time position at the club by Ashley. Kinnear however suffered heart trouble the following month was given leave by the club to recover. In April 2009 Ashley appointed Alan Shearer to replace Kinnear as interim manager. Shearer however was unable to achieve more than 5 points from the 8 games he was in-charge, and on 24 May 2009 Newcastle United were relegated to the championship. Ashley apologised to Newcastle United F.C. fans on 25 May 2009 for the mistakes made throughout the season, but nonetheless praised all staff, including Shearer and Kinnear, for all their efforts throughout the season.^[29]

Since the club's relegation, Ashley struggled to find a buyer capable of providing proof of funds to purchase Newcastle United F.C. Throughout August and September 2009, local businessman Barry Moat was reported to have opened negotiation talks with Ashley. In October 2009, a premier league arbitration panel found the club guilty of "constructive dismissal" and Mike Ashley was made to pay Kevin Keegan £2million compensation + interest for his mistreatment during the time at the club. ^[30]

Wikinews has related news: Mike Ashley takes Newcastle United off the market for a second time

On 27 October 2009, Ashley took Newcastle United F.C. off the market after again failing to find a suitable buyer for the club.^[31] A Newcastle statement confirmed, "Mike Ashley is totally committed to the future success of Newcastle United and will be focused on gaining promotion back to the Premier League. Mike will put a further £20m into the club this week." ^[32] The move to withdraw the sale proved questionable among many as he had stated little more than a week before that he regretted the purchase of the club and felt he never had the required stance and knowledge to own a football club. ^[33] The club released future plans in the same statement, announcing the club would attempt to sell the clubs stadium naming rights to raise funds to clear debts of the club, causing outrage among newcastle fans across the world who felt the club would lose tremendous heritage with the name of St James' Park changed. ^[34]

On 4 November 2009, it was announced that Ashley's own company would sponsor the stadium, rebranding it the "sportsdirect.com @ St James' Park Stadium" until the end of the season.^[35]

References