Newcastle United owners have held talks with Mike Ashley over the businessman retaining a small stake in the club following a takeover, the retailer claims.
In an amended application lodged with the High Court, in her litigation against Amanda Staveley and Mehrdad Ghodoussi, Newcastle co-owners Ashley, through her company, St James Holdings Limited, also admits receiving a £17 loan repayment £.5m from the club ahead of the £305m sale, which was completed on October 7, 2021.
The 57-year-old is suing Staveley and Ghodoussi for immediate repayment of a £10million loan made during the takeover to cover legal and other costs, plus accrued interest, claiming the terms were breached when Staveley said she was ‘eager’ to remove Sports Direct signage at St James’.
One of the terms stated that the parties agreed not to “make any statement or comment derogatory or otherwise in bad faith with respect to the other party or otherwise bring the other party into disrepute”.
Staveley insists she intended to convey that she was looking forward to severing the association between Ashley and Newcastle.
However, after initially setting out his case in the High Court of Justice in London on December 29 – at which Staveley and Ghodoussi filed a defense on February 12 – he published an amended claim last Wednesday.
In a court order, issued by the Honorable Mrs Justice Moulder, Ashley was told he must pay Staveley and Ghodoussi’s costs in relation to the ‘review’ of the amendments. The Newcastle part-owners have until 4pm on Friday to submit their amended defence.
In the latest filing, it is claimed that “there had been discussions in or around July 2021 that Mr Ashley would retain a small stake” in Newcastle following the proposed sale to the consortium, which included the Saudi Public Investment Fund (PIF), as majority shareholders at 80%, and the Reuben Brothers and PCP Capital Partners of Staveley, which were each to hold 10% of the shares. 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 last full season of Ashley’s ownership, showed the retailer owed £106.9m as of June 30, 2021, after providing a long-term loan facility to the club. Accounts say the loan was “interest-free and repayable on demand.”
While it had been widely assumed that these loans were included in the £305m purchase price for the club, Ashley’s amended court documents state that “shortly before the deal closed on the 7th October…a loan repayment of £17,500,000 (has been made) to Mr Ashley pursuant to an agreement with the acquiring consortium”.
Staveley and PCP declined to comment when approached by Athleticism.
In November, Athleticism reported that Newcastle ownership needed to invest an additional £38.5m into the club to cover day-to-day costs. “There was an immediate need for cash, day one, for working capital and then for the transfer window,” Staveley said later.
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 her amended claim, Ashley says her company, Sportsdirect.com Retail Limited (SRL), was ‘owed’ to pay £2million per season for ‘particular signage’ at St James’ Park and the training ground at Benton of the club from the 2019-20 Premier League campaign.
“However, while the sale was under negotiation during the 2019-20 Premier League season,” the document states, “SRL did not pay the sponsorship fee so as not to increase the cash balance in outside of the pending sale agreement.” Ashley insists SRL paid an “annual fee” of £1million in each of the 2017-18 and 2018-19 seasons for these “sponsorship rights”.
In their interview with Athleticism in February, Ghodoussi and Staveley were asked about Ashley’s original claim. “We are really disappointed and we will vigorously contest it,” 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 sold the club to the right people. We never said anything negative about him.
“I’m saddened,” Staveley said. “It’s a real shame because I like him a lot. And I’m proud of what we’ve done.
On the £10million loan, Ashley’s original filing claimed that “PCP and the first defendant (Staveley) were also unable to meet advisory, legal and other fees and commissions associated with PCP’s participation in the SPA (Sale and Purchase Agreement).Therefore, and in order for the entire transaction to proceed, Plaintiff agreed to loan to First Defendant the funds necessary to pay the invoice for PCP.”
“As the defense says, we incurred costs that benefited the entire consortium,” Staveley said four months ago. “Mike really wanted a deal done very quickly and that meant we made a decision that meant he could do it quickly. We took on that burden.
(Photo: Owen Humphreys/PA Images via Getty Images)