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Mike Ashley claims he held talks with Newcastle owners about retaining small stake in club - The Athletic

Newcastle United’s owners held discussions with Mike Ashley about the businessman retaining a small stake in the club following a takeover, the retailer...

  • Posted on 20th Jun, 2022 17:34 PM
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Mike Ashley claims he held talks with Newcastle owners about retaining small stake in club - The Athletic Image

Newcastle United’s owners held discussions with Mike Ashley about the businessman retaining a small stake in the club following a takeover, the retailer claims.

In an amended claim filed to the High Court, as part of his litigation against Amanda Staveley and Mehrdad Ghodoussi, Newcastle’s co-owners, Ashley, via his company, St James Holdings Limited, also admits to receiving a £17.5 million loan repayment from the club in advance of the £305 million sale, which was concluded on October 7, 2021.

The 57-year-old is suing Staveley and Ghodoussi for immediate repayment of a £10 million loan made during the takeover to cover legal and other costs, plus interest accrued, claiming terms were breached when Staveley said she was “looking forward” to removing Sports Direct signage at St James’.

One of the terms said the parties agreed not to “make any statement or comment which is derogatory or otherwise in bad faith in relation to the other party or otherwise bring the other party into disrepute”.

Staveley insists she intended to convey that she was looking forward to breaking the association between Ashley and Newcastle.

However, having initially outlined his case to London’s High Court of Justice on December 29 — to which Staveley and Ghodoussi filed a defence on February 12 — he issued an amended claim last Wednesday.

In a court order, issued by the Hon Mrs Justice Moulder, Ashley has been informed that he must pay Staveley and Ghodoussi’s costs in relation to “considering” the amendments. The Newcastle co-owners have until 4pm on Friday to submit their amended defence.

Within the latest filing, it is claimed that “there had been discussions in or around July 2021 about Mr Ashley retaining a small stake” in Newcastle following the proposed sale to the consortium, which included the Saudi Arabian Public Investment Fund (PIF), as majority 80 per cent shareholders, and the Reuben Brothers and Staveley’s PCP Capital Partners, who were each to hold 10 per cent stakes. Ashley claims that, while “PIF had been open” to him continuing as a minority shareholder, Staveley “was opposed to Mr Ashley’s continued involvement”.

Newcastle’s most recent accounts, which covered the final full season of Ashley’s ownership, showed that the retailer was owed £106.9 million as of June 30, 2021, having provided a long-term loan facility to the club. The accounts state that the loan was “interest-free and repayable on demand”.

While it had been widely assumed that those loans were included in the £305 million purchase price for the club, Ashley’s amended court documents state that “shortly before closure of the 7 October transaction… a loan repayment of GBP 17,500,000 (was made) to Mr Ashley as per an agreement with the acquiring consortium”.

Staveley and PCP declined to comment when approached by The Athletic.

In November, The Athletic reported that Newcastle’s ownership were required to invest another £38.5 million into the club to cover daily costs. “There was an immediate requirement for cash, day one, for working capital and then for the transfer window,” Staveley later said.

Meanwhile, in their written defence, Staveley’s lawyers claimed that Sports Direct and Flannels, another of Ashley’s companies, paid no sponsorship fees to Newcastle for signage in 2019-20, 2020-21 and 2021-22.

In his amended claim, Ashley says that his company, Sportsdirect.com Retail Limited (SRL), was “due” to pay £2 million per season for “particular signage” at St James’ Park and the club’s Benton training ground from the 2019-20 Premier League campaign.

“However, while the sale was being negotiated during the 2019-20 Premier League season,” the document reads, “SRL did not pay the sponsorship fees so as not to increase the cash position balance sheet outside of the pending sale agreement.” Ashley insists that SRL did pay a £1 million “annual fee” in each of the 2017-18 and 2018-19 seasons for these “sponsorship rights”.

In their interview with The Athletic in February, Ghodoussi and Staveley were asked about Ashley’s initial claim. “We’re genuinely disappointed and we will contest it vigorously,” Ghodoussi said. “We thought we had a good relationship with Mike. To his credit, he pushed very hard to get this deal done. We couldn’t have done it without him. He always said he wanted to sell the club to the right people and he has sold the club to the right people. We’ve never said anything negative about him.”

“I’m saddened,” Staveley said. “This is a real shame because I like him a lot. And I’m proud of what we did.”

On the £10 million loan, Ashley’s initial case claimed that, “PCP and the First Defendant (Staveley) were also unable to meet the advisory, legal, and other costs and commissions associated with PCP’s participation in the SPA (sales and purchase agreement). Therefore, and in order for the whole transaction to be able to proceed, the Claimant agreed to lend the First Defendant the funds required to pay PCP’s bill.”

“As the defence says, we incurred costs that were for the benefit of the whole consortium,” Staveley said four months ago. “Mike wanted very much a deal done very quickly and that meant we made a decision which meant he could close quickly. We took that burden on.”

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