Sports Direct’s billionaire owner Mike Ashley’s year from hell became even worse on Wednesday as Newcastle United — the football team he owns — was relegated from the Premier League.
Newcastle’s relegation could cost the club at least £100 million ($144 million) in lost earnings, in part from a far more lucrative Premier League TV deal kicking in next season that will greatly increase broadcast revenues for each Premiership club.
The relegation will also likely result in the departure of many top players from Newcastle who don’t want to play in the Championship division.
It’s yet more bad news for Ashley, who has had a terrible 2016 so far.
He is estimated to have lost over £1 billion in the last year, according to the Sunday Times Rich List, mostly due to Sports Direct’s plunging share price.
Sports Direct — a clothing company — has been under pressure from the UK press and MPs to explain allegations by The Guardian that employees are paid less than the minimum wage. Sports Direct has already issued two profit warnings to investors after the story broke.
Ashley bought a 41.6% stake in Newcastle for £135 million (£195 million) back in 2007, and his reception from fans has been mixed ever since. Responding to mounting pressure, Ashley gave an interview last May stating he wouldn’t sell the club until it either won a trophy or qualified for the Champions League.
Trying to revive the team’s fortunes, he hired ex-England coach Steve McClaren in June, but it did little to help.
Some expensive panic buys the following January — Jono Shelvy and Andros Townsend for £12 million each — couldn’t stem the losses. Hiring Rafa Benitez as manager in March was ambitious but ultimately doomed, and Newcastle was relegated with a game to spare.
Ex-England and Newcastle manager Kevin Keegan told BBC Sport on Wednesday that ownership mistakes would always be “punished.”
“You have to say Mike Ashley hasn’t handled the decision-making very well or he’s given the responsibility to people and they haven’t handled it very well,” he said.
“It is mismanagement from the very top,” he added. “They bought players for the future but sometimes maybe you have to buy players for the present.”