Investors say Mike Ashley treats Sports Direct like ‘his own plaything’ — and they’re absolutely sick of it

Mike AshleyGettyNewcastle owner Mike Ashley (c) looks on before the Barclays Premier League match between Newcastle United and West Ham United at St James’ Park on May 24, 2015 in Newcastle upon Tyne, England.

Investors in Sports Direct, the budget sporting goods retailer, are getting increasingly annoyed with the way that the company is run, and are calling for chairman Keith Hellawell to be sacked.

According to a report from the Financial Times, several of the biggest investors in Sports Direct have lost faith in founder and majority shareholder Mike Ashley, who is also deputy chairman of the company.

Ashley owns around 55% of shares in Sports Direct, giving him effective control over the company, a power that he is abusing according to shareholders who spoke to the FT. One “top 20 investor” said: “Sports Direct is a running sore in corporate governance terms. Mike Ashley acts like the chief executive. He thinks the company is his own plaything and does not want to play the game as a public company.”

The FT cites comments from several top 10 and 20 investors in the company, complaining about the way it’s run, with much of the attention directed at a “lack of transparency” in the firm, and suggesting that Sports Direct’s era of growth is over.

One investor compared Sports Direct to Ashley’s football club, Newcastle United: “I can’t see where the next leg of growth is coming from. Sports Direct is like Newcastle United football club. The group got into the top league, but then struggled.” Another said that the company has “gone as far as it could” adding that Ashley is “in trouble.”

Sports Direct entered the FTSE 100 in September 2013, but has lost more than half its market value since August 2015. In one week in January, the company lost more than £1 billion in market cap. The losses mean that it’s set to drop put of the UK’s blue-chip index on Wednesday, when the FTSE makes its quarterly review of the constituents of the index.

Here’s how Sports Direct shares have performed in recent months:


Hellawell, formerly a policeman, took over as chairman in 2009. Prior to his appointment, he had no experience of working in the sporting goods sectors, and that lack of experience has been criticised by investors.

One “top ten” investor told the FT: “It has become clear that the chairman lacks the skill to drive Sports Direct forward. Mike Ashley needs a strong chairman to challenge him.”

The calls for Hellawell’s sacking are just the latest in a series of problems for Sports Direct in recent months and years. In January, Mike Ashley came under fire for giving his daughter’s boyfriend a high-level job and a £10 million loan, despite him having no experience in commercial property development, the field in which he was employed.

Amongst other things, the company has also been criticised for effectively paying workers less than minimum wage, although since the allegations were made in the Guardian newspaper, Sports Direct has committed to paying at least minimum wage to all staff, costing the company £10 million ($14.5 million).

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