Youngsters who hang about at bus stops waiting to earn an ASBO will be devastated to learn that their clothing purveyors of choice - JJB Sports and Sports Direct - are to be investigated by the Serious Fraud Office for price fixing and fraud.
Dave Whelan’s former company and Mike Ashley’s current profit-zapping outfit have been the subject of a secret investigation by the Office of Fair Trading since January. The Guardian’s business eggheads report:
JJB this morning told shareholders that it had sparked the probe with an approach to the OFT just 10 days after the company suspended its former chief executive, Chris Ronnie. It claims to have negotiated immunity in exchange for whistle-blowing co-operation.
It certainly seems to be raining shit on Newcastle at the moment. Not only do they prepare themselves for the forthcoming Championship season with an uncertain management team, a restless squad and a dreadful away strip, but owner Mike Ashley has taken a fiscal pounding thanks to his underperforming sportswear chain.
Sports Direct, the company in which the rotund businessman owns a 71 per cent share, has suffered a 91 per cent fall in pre-tax profits. Earnings fell from £118.9m to £10.7m this year, even though revenues topped £1bn and sales were up 5.1 per cent.
The huge downturn is a result of the collapse of Icelandic bank Kaupthing Singer & Friedlander (KSF) - the very same organisation that ruined former West Ham owner Bjorgolfur Gudmundsson. The collapse caused the sports retailer to write-off a staggering £53.1 million of shares, which is an awful lot of hoodies and baseball caps.
From today’s London Evening Standard, some chilling news for admirers of Newcastle owner Mike Ashley’s bank account.
“Mr Ashley is the fourth biggest loser from the crunch and has seen the value of his stake in Sports Direct, the retail giant he set up and floated on the London market, dive from £1.17 billion in February last year to just £168 million today. That is a loss of £1 billion.”
It certainly seems to be raining sh*t on Mike Ashley right now.
Earlier this year, we told you how the Sports Direct mogul had gambled away £129m, by losing £300,000 for every penny that Halifax Bank of Scotland’s shares moved. He lost that wedge when HBOS saw £3bn wiped off their value in a single day in March, and the recent misfortunes of the banking and insurance group have further dented the rotund Newcastle owner’s coffer.
Early last week, before Lloyds TSB rode in on a black stallion to offer a rescue package for HBOS, Ashley was said to be down £380m, but
Wigan owner Dave Whelan last night showed he isn’t afraid of beating a man when he is down, by taking a pop at sports retailer arch nemesis Mike Ashley:
“He is a very good retailer, but at managing a football club, no. Especially with him being a Tottenham supporter and then going up to Newcastle, a club that is a different kettle of fish to most in the land.”
He went on to heap praise on Wigan gaffer Steve Bruce, who is currently fifth favourite to take the reins at St James Park. Whelan said he would support Bruce in any career decision, but alluded to the man from the north east being destined for bigger things than the Magpies:
“One day he will get a big-four job - I realise that, and I think the whole country realises he is one of the best four managers in the world.”
Does the whole country realise that? Yes, he helped Birmingham get promoted twice and kept Wigan away from the danger zone last season, but does he deserve to sit among the Mourinhos and Fergusons of the game?
If you have any thoughts on Whelan’s comments, or know who take up the other three spots in the top managers list, let us know with a comment below.
Mike Ashley, Dennis Wise and Derek Llambias will fly back from Dubai today after an unsuccessful sales trip. It wasn’t unsuccessful because of complicated financial negotiations, but rather because they chose to skip the boring business bit and drink mojitos instead:
According to arabianbusiness.com, Dubai investors were waiting for Ashley in the Mina A’Salam Ramadan Tent in the Madinat Jumeirah Hotel for their 11pm meeting but he was instead in the nearby Bahri Bar knocking back cocktails.
Surely the Arab businessmen knew the meeting would never materialise if it was scheduled for 11pm. By that time, Ashley has usually downed his sixth pint and removed his ‘King Kev’ Newcastle shirt, and Wisey is conducting his second or third assault of the evening.
Newcastle owner puts club up for sale at fans’ request
Following a weekend of fervent protest at St James’ Park, Newcastle owner Mike Ashley has finally given in to fans, and has entered negotiations to sell the club. In an emotive 1,644 word statement, he admits his love for the game and insists he will never abandon the club:
I know what it means to love football and to love a club. I know how important it is to other people because football is so important to me.
My life has been tied up with sport. It was the passion that I felt for sport that helped me to be successful with my business. That success allowed me to mix my passion and my business.
[…]
I am not stupid and have listened to the fans. I have really loved taking my kids to the games, being next to them and all the fans. But I am now a dad who can’t take his kids to a football game on a Saturday because I am advised that we would be assaulted.
Therefore, I am no longer prepared to subsidise Newcastle United. I am putting the club up for sale. I hope the fans get what they want and that the next owner is someone who can lavish the amount of money on the club that the fans want.
This will not be a fire sale. Newcastle is now in a much stronger position than it was in 2007. It is planning for the future and it is sustainable.
Ashley also goes to great length to explain how he has countered Newcastle’s precarious financial situation by “pouring up to £20m a year back into the club” and by treating it as a going concern. He also insists that Dennis Wise and his team have “done a first class job scouting for talent to secure the future of the club”.
So, should we feel sorry for a man who has been forced out of a club he claims to care about, and one he has invested a great deal of time and money in? Or should we thank our lucky stars that the man who forced out Kevin Keegan has finally thrown in his hand?
Sports Direct staff getting a slightly better Christmas party this year
After they tolerated a season that consisted of poor results, the feint threat of relegation and Kevin Keegan, Mike Ashley has decided to punish Newcastle fans with a ten per cent increase in season ticket prices. Considering the fact that the average season ticket rise is 10 per cent and the economy in this country is completely fudged, this news could be a rather bitter pill for Geordies to swallow:
Supporter Jim Hannah, 47, of Whitley Bay, said: “Fair enough if you want to commit to three years - last season’s price is frozen.
“But the way things are economically, who can afford that? It’s a strange time to do it after the season we had.”
Despite Mike Ashley’s cash-draining surprise, the Newcastle website claims season tickets are now sold out for next season, and just ten per cent of Magpies claimed they would be giving up their pass in a poll published on The Spoilerlast week (the average for the league is around 14 per cent).
My Premier League season ticket cost £250 nine years ago, and now the average price is around £780 - that’s the kind of inflation that makes petrol prices look reasonable. So are top flight clubs abusing their fans’ loyalty with extortionate prices? Let us know with a vote and comment below.
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