Newcastle relegation Mike Ashley’s annus horribilis: Here’s what’s gone wrong for the divisive Sports Direct founder
Mike Ashley's year has gone from bad to worse after Newcastle United were dumped out of the Premier League for the second time in his ownership on Wednesday night.
Yet Newcastle's ejection from the riches of England's top tier into the same division as Burton Albion is only the latest in a series of damaging episodes the retail tycoon has suffered in recent months…
Read more: Mike Ashley's wealth declines by £1bn
Newcastle break the bank…still get relegated
Relegation from the Premier League is always bad news for a club's accounts, but Newcastle have perhaps suffered the fate at the most inopportune moment imaginable, coming just months before a new TV deal guarantees every team a minimum £100m.
To make things worse, it also arrives at the end of a season which has seen the club spend £80m on new players — a club record which, according to Ashley, has left "virtually nothing in the bank account, they have emptied it".
And for Ashley, the costs could potentially go further. When Newcastle were last relegated in 2009, Ashley injected a £30m loan in order to keep it afloat and he may need to take similar action again if he wants the likes of Andros Townsend and Jonjo Shelvey to stay on the books and help fire up a promotion push.
Fans want him to sell, but Newcastle are far less valuable in the Championship rather than the Premier League. Valued as the 20th most valuable club in the world by Forbes just yesterday, Newcastle's value could plummet upon relegation.
According to sports business consultant Nigel Currie, Newcastle's brand equity could drop between £50m and £70m as their ability to "attract overseas fans, sell merchandise and sell sponsorships will be diminished".
For Ashley to make his money back on Newcastle, he needs to find a buyer willing to pay at least £260m.
Read more: Newcastle United ranked as the worst-run club in the Premier League
Sports Direct shares take a tumble
Newcastle is not the only asset owned by Newcastle to have suffered a damaging relegation and drop in value this year.
Sports Direct was demoted from the FTSE 100 in March and its shares have continued to take a kicking, tumbling 42 per cent in the past year alone.
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The high street retailer blamed warm weather over the Christmas period for sluggish financials — an argument not bought by many investors as rival JD Sports has simultaneously announced record profits and surpassed Sports Direct's market value, despite being worth £2bn more as recently as December.
Such troubles have battered Ashley's personal wealth and wiped £1bn from his personal fortune in the last year.
Beaten in court by Rangers chairman Dave King
Ashley was lambasted at the high court after taking legal proceedings against Rangers and it's chairman Dave King for allegedly violating a gagging order related to the retail agreement between the two parties.
The Newcastle owner, also a minority shareholder in the Scottish club, was blasted by Justice Peter Smith for making a charge "designed to intimidate rather than seek a proper sanction for an alleged breach".
Ashley and Rangers are locked in a bitter dispute over a retail agreement between the pair that the club's board argue is unfair and was not made in the best interests of the club.