Newcastle uncertainty after Mike Ashley’s Rangers deal

Newcastle Utd owner Mike Ashley may have to jettison shares in the club to push through a potential takeover at Rangers.

The billionaire sportswear boss yesterday ploughed £2 million into the Scottish side, who were at risk of plunging into administration without additional funding.

He currently holds an 8.92% stake in the Glasgow club, but may now look to tighten his grip by increasing his share.

However, that would require him to decrease his holding in the Magpies where he is the sole owner and forfeit his influence over the club.

Neil Patey, Transaction Advisory Services partner and football industry expert at Ernst & Young LLP (UK), said: “It’s difficult to know what Ashley’s long-term plans are at Rangers but it’s clear that if he wants to increase his shareholding above 10%, then he’ll need to dispose of shares in Newcastle.

“If Newcastle stay within the Premiership I believe Mike Ashley has given an undertaking to the SFA that he won’t increase his shareholding within the club above 10%.

“But if Newcastle are relegated or get into Europe, then things might change.”

Rangers were locked in talks on Friday with both Sale Sharks owner Brian Kennedy and Ashley. Both parties were willing to provide the cash needed to keep the club afloat, but yesterday morning the Rangers board accepted the Newcastle owner’s offer, which includes the option of a new share issue.

Graham Wallace, the Ibrox club’s Chief Executive, is expected to leave his role following the board’s acceptance of the loan.

The club’s dwindling cash reserve is expected to expire before the end of November with an emergency loan believed to be their only measure against collapsing into administration again.

Ashley is currently 100% shareholder at St James’s Park. While he may not be on the immediate verge of increasing his hold on Rangers, changes in the circumstances of either side may trigger board movement.

Mr Patey added: “Essentially Mike Ashley would have to give up his majority shareholding and any form of major influence in the club.

“He could maybe be a minority, passive shareholder but I’m not sure if that would necessarily align with his typical objectives.

“Newcastle remains the better investment for him just now but maybe he would see a Rangers back in the Scottish Premiership, who were getting regular Champions League football, as more attractive.

“With Newcastle not achieving that, you could argue that Rangers would be more attractive from that point of view.”

Rangers supporters reacted with fury to the loan, fearing that Ashley will use his influence to sell off assets and profit through merchandising.

Mark Dingwall, editor of the Rangers fanzine Follow Follow, fizzed: “This is absolutely disastrous. Fans see Ashley as being very closely aligned with the controlling group at the club which has brought us to the brink of insolvency.

“You look at what he’s not done at Newcastle United, where the revenues from merchandising halved during his reign. The club’s stagnated and there’s been absolutely no empathy shown to the fans, who are now basically united in wanting him to go.

“The whole future of Rangers is now in doubt.”

However a source close to Ashley last night exclusively told The Sunday Post that Ashley “genuinely believes that he is the only man with the financial clout, business expertise and knowledge of running a top football club like Newcastle United who can save Rangers”.