Progress on a sale of Newcastle United in the next few weeks is unlikely while the team is struggling to win football matches, despite reports of renewed interest in a takeover of the English Premier League club.
Opto Advisers, led by former Chelsea and Manchester United chief executive Peter Kenyon, is said to be putting together an offer for the club.
However, a source aware of the matter told The National that Kenyon has so far been unable to raise the required funds to instigate a bid. Newcastle are also yet to receive an official approach from Kenyon but owner Mike Ashley remains open to offers for the club, Tyneside newspaper The Chronicle reported.
Ashley, the billionaire founder of retailer Sports Direct, has been seeking a sale of the club for a year and a potential takeover of by a consortium led by Dubai financier Amanda Staveley last season broke down at the discussion stage, amid a failure to agree how much the club was worth.
Staveley's PCP Capital Partners had offered a cash amount of just below £300 million even while the club were at risk of relegation from the Premier League. Ashley however was said to be seeking closer to £350m and £400m. The club eventually finished 10th last season under manager Rafa Benitez.
It is also understood that there has been no renewal of contact over a potential deal between Ashley and PCP's senior principals Staveley and managing partner Mehrdad Ghodoussi.
Newcastle lost 2-0 at St James’ Park to visiting Leicester City on Saturday, and currently sit 18th in the table, in the relegation zone, after seven games.
Any buyer would have to take on all the future risk – both in terms of possible relegation and the player investment the team badly needs to avoid it.
This is likely to mean any suitors would hold off on their interest until the on-field situation becomes clearer, the source said.
Newcastle have a bitter experience of relegation in recent years, having dropped down to the Championship twice since Ashley first invested in the club in 2007. Before their last relegation, for the 2015-2016 year, the club made a profit after tax of £4m on revenue of £126m. For the period, its matchday revenue was £25m, broadcasting brought in £73m, with commercial and other income at £28m. During the 2016-2017 financial year, in which the club played outside the top flight, Newcastle made an operating loss of £90m.
Ashley has in the past said he would be willing to sell Newcastle, particularly in the wake of relegation in 2009, before taking the club off the market in the absence of any serious bid. Reports in 2013 put the figure he would be willing to accept to sell the club then at £267m, allowing him to recoup his investment which includes the £134.4m he paid to buy the club outright.
Regardless of the final outlay required to acquire Newcastle, it is universally agreed that there is plenty of opportunity to be tapped from the growth of the Premier League, the passion of the fan base and the fact that St James’ Park is a world-class stadium, in the city centre, with a 52,000 capacity.
While Newcastle benefited last season from the increased worth of the league’s media rights – both domestic and worldwide together come in at more than £8 billion - commercial revenue at Newcastle is stuck at just under 20 per cent of total earnings. A lot of work will need to be done to better commercialise the business and the brand.
In February, a new Premier League TV rights deal for the UK for 2019-2022 was secured with broadcasters Sky and BT paying a combined £4.5bn, £500m less than the total they paid for the previous three-year deal. However, with more matches made available for broadcast, Amazon said it would livestream 20 matches a season online, following an agreement with the Premier League, the value of which was not disclosed. The economic outlook of all English top flight clubs has been highly dependent on traditional broadcasters but the prospect of digital players entering the arena helps strengthen it.
Requests for comment for this article from Newcastle United’s PR advisors went unanswered.