As you may have already gleaned from the “Meet the Owners” series, the people who buy and
run football clubs are far from a popular crowd, their ranks filed with oligarchs, dictators,
criminals and rapacious billionaires. But there is perhaps one person amongst this ethically
compromised cabal who provokes the ire of fans, the press, politicians and other businesspeople
like no other.
And that is Newcastle United's English owner Mike Ashley, who also owns a significant stake
in Glasgow Rangers.
Ashley, it is fair to say, is something of a walking contradiction. A self-made member
of the billionaires club who is now worth – according to Forbes – £2.73 billion
and sits in 629th place on their 2018 billionaires list.
A devout Newcastle Fan despite being born and raised in Buckinghamshire, Ashley often
cuts a disheveled figure, turning up for meetings carrying his mobile phone in a plastic bag
after commuting to the office from his 33 room mansion in North London by helicopter.
A ruthless businessman who built Sports Direct, a billion pound sportswear retail business,
from a single store and which is now the biggest single employer of zero-hours contracts in
the UK. And yet Ashley maintains an everyman persona that has seen him boast that he can
down a beer in ten seconds, including once at a Newcastle home game, and who, allegedly,
once vomited in a pub's fireplace after necking 12 pints during a typically raucous business
meeting.
Ashley's story begins in the modest, middle class village of Burnham, Buckinghamshire,
in the south east of England. He wasn't an exceptional student and gained a single O-Level,
a C in economics, before leaving school at 16 with dreams of becoming a professional
squash player. An injury ended that path and it was whilst working as a squash instructor
that he happened upon the idea of opening up his own sports shop, Mike Ashley Sports,
with a £10,000 loan from his father, who had mortgaged the family bungalow.
From there he went on to acquire over 100 stories, rebranded as Sports Soccer, as well
as a string of brands like Donnay, Dunlop-Slazenger (which he later sold) and Lonsdale, allowing
Ashley to operate a “pile 'em high, sell them cheap” model. In 2007 Ashley went public
and issued an IPO that netted him close to a £1billion personal profit. He retains a
60% stake in the company, that continues to acquire stakes in distressed retailers. House
of Fraser became Ashley's latest acquisition. Today he owns more than 400 stores, dozens
of brands and retailers and the share price is hovering around 400p. In its last results
Sports Direct still made a £78 million profit even after having to take a huge hit on its
failed investment in Debenhams.
Even though Ashley's bacchanalian exploits – like gambling and heavy boozing – have
given him a well known public persona, he is not someone who is comfortable in the public
eye. He rarely gives interviews and is known to detest public speaking. So much so that
he risked jail by refusing to appear before a parliamentary committee. Sports Direct employs
close to 20,000 people and is the biggest user of so-called ‘zero hours’ contracts,
a flexible way of employing staff that gives no actual obligation to offer any work. The
contacts have been blamed for deepening poverty and raising uncertainty for millions of low-paid
service sector workers. “Zero-hours contracts create a throwaway workforce. They form a
one-way street, whereby employers bear no risk, avoiding sickness and holiday pay and
overtime,” wrote Len McCluskey, the general secretary of Britain’s Unite union.
At the time over 80 per cent of the Mike Ashley’s workforce was on zero-hours contracts and
a 2015 investigation by the Guardian revealed the terrible conditions in some of Sports
Direct’s warehouses, including the under payment of the minimum wage. A subsequent
BBC investigation found that workers were subjected to a “six strikes” disciplinary
regime, where six so called “offences” would lead to dismissal. Those including talking
too much, taking too much sick leave, taking long toilet breaks and using a mobile phone
at work. This created such a culture of fear that employees would take huge risks to avoid
getting fired. One heavily pregnant women was reportedly so scared of losing her job
she ended up giving birth in the warehouse toilets rather than call in sick. (Sports
Direct complained to the BBC about the report, but the complaint was was rejected by the
BBC Trust).
A recalcitrant Ashley was eventually dragged before a Parliamentary Select Committee to
answer questions about his business. Ashley gave a punchy if flustered performance but
agreed to pay back over £1 million in lost pay, while his company faced a £2 million
pound fine for the breach. “In light of the appalling practices at Sports Direct,
it is only right that the Government imposes fines to send a clear signal to other rogue
employers,” said the Labour Party’s deputy leader Tom Watson.
Ashley promised to give guaranteed hours to all retail staff (but not warehouse staff).
However, little has changed. Last year Labour Leader Jeremy Corbyn used Prime Minister's
questions to urge Teresa May to condemn Ashley and Sports Direct after reports that zero
hours contracts were still widely used.
“A year on, they’re still exploiting insecure workers with zero hours contracts. Will the
Prime Minister join me in now demanding that Mr Ashley honours his words and ends zero
hours contracts in all his companies?”
The Prime Minister declined to condemn Ashley.
But Ashley is perhaps best known for his acquisition of Newcastle United for £134million in 2007,
a purchase he appears to have regretted from the moment he bought the club. Whilst some
fans welcomed the move, he had soon turned the club's fanbase against him for his perceived
thriftiness and a string of moves that appeared to evaporate whatever good will was left.
These included firing club legend Kevin Keegan (and later having to pay £2million pounds
after Keegan successfully sued for constructive dismissal after he refused to sign Ignacio
Gonzalez, who had been scouted by former director Denis Wise via YouTube); the brief renaming
the St James' Park Stadium as the Sports Direct Arena and signing Wonga – a pay day loan
company with an appalling reputation for exploiting the poor and offering loans to often desperate
people at an effective interest rate of 1500% - as a shirt sponsor.
Worse, many fans accused Ashley of being a Tottenham Hotspur fan, but subsequent interviews
with childhood friends from back in Buckinghamshire seem to suggest he was, indeed, a lifelong
Toon fan. Still, Ashley was talking about selling Newcastle a year after buying the
club, as was seen seen hawking the club around potential Middle Eastern buyers in Dubai for
a reported £481million. But that came to nothing and the club relegated to the championship
following a disastrous 2008-2009 season. Newcastle bounced straight back before another relegation
in 2016, and immediate return to the Premier League with Rafa Benitez as coach.
Ashley has made no bones about his desire to sell the club. In a rare interview with
Sky Sports he claimed there was no way he could compete with the new breed of owners
like Sheikh Mansour at Manchester City.
“I’ve put my £250million into the football club. There’s no more from me. Now the club
has to generate its own money. If someone said to me I am wealthy – OK, in theory
I am a billionaire, even maybe a multi-billionaire – but in reality my wealth is all in Sports
Direct shares ... I don’t have that cash in the bank, so I don’t have that ability
to write a cheque for £200m. I don’t have it, it’s very simple, it’s not there.”
And, in a way, that is what has happened. According the football finance blogger the
Swiss Ramble, Newcastle United made six successive seasons of profit in between relegations,
amassing some £100 million. In total, up to the last released figures, Ashley has made
a total profit of £4million since taking over in 2007. He has, at the very least, made
Newcastle United financially stable.
But for the fans, that's not enough. Like Stan Kroenke at Arsenal, the perception amongst
Newcastle Supporters is that Ashley appears happy for Newcastle United to tread water,
avoid relegation and rake in the Premier League's booming TV income to keep the club solvent.
But his time at the club may be coming to an end. Last October he announced again that
the club was for sale and he entered into negotiations with Amanda Staveley, a British
deal maker based in Dubai who played a key role in securing Manchester City for Sheikh
Mansour from the former Thai prime minister Thaksin Shinawatra. Shinawatra has claimed
that a deal was close between Liverpool and Sheikh Mansour but that he persuaded a female
broker (thought to be Staveley) to push for the much cheaper Manchester City deal instead.
She was also instrumental in Sheikh Mansour's £3.5 billion investment in a Barclays Bank
that was reeling from the 2008 financial crisis. Mansour made a huge profit, as did Staveley,
although her company PCP is suing Barclays for money she believes she is still owned
from Barclays for that deal.
According to Staveley a £250 million deal is on the table, something Ashley (who is
looking for £350 million) has denied. But there are question marks as to where that
money has come from and who the investors behind Staveley actually are.
The saga continues but an eventual sale to Staveley may also be a leap in the dark. Sometimes
it's better the devil you know.