TYNESIDE businessman Freddie Shepherd's dreams of taking Newcastle United off the Stock Exchange and shedding its plc status could lead to a return to better times at the club.

Mr Shepherd, who owns 7.6 per cent of the club's shares through his company Shepherd Offshore, is negotiating with institutional shareholders, including cable firm ntl, Barclays, and Legal and General Investment Management, to take the club back into private hands.

Such a move would halt the club's sliding share price, which has fallen from a high of £1.39 when it floated on the market in April 1997, to 31p at the close of trading yesterday, giving the club a stock market value of £41m.

A return to the private sector would allow Mr Shepherd to run the club in the way he saw fit, without interference from city institutions.

Mr Shepherd needs the backing of about 90 per cent of shareholders for that to happen, and already Douglas Hall, who owns 47.8 per cent, is believed to have offered his support, in exchange for a future role at the club.

Fans could be encouraged to sell their shares in the hope of a return to the glory days of Sir John Hall and Kevin Keegan, when the club regularly challenged at the top of the Premiership.

Mark Jensen, editor of fanzine The Mag, said: "Around ten per cent of the shares are owned by small shareholders who bought them just to have their own little part of Newcastle United, and a share certificate to put on the wall.

"In theory I believe it would be better for the club to leave the Stock Market, even though that would mean those small shareholders giving up their piece of the club.

"But they could be convinced, if it was proved to them that, in the long run, it would take the club back to the days when it challenged Man United for dominance in the Premiership, and back to regularly finishing in the top six and qualifying for European competition."

But the small shareholders would expect to get what they originally paid for the shares, if not a premium, to be convinced to sell.

If Mr Shepherd gets his way and small shareholders are forced to sell up cheaply it could lead to another fans revolt like the Save Our Seats campaign, when some fans were moved from their places to make way for corporate hospitality boxes.

Mr Jensen added: "The removal of the plc board would remove one level of bureaucracy, and put the club back in the hands of men who hopefully have its interests at heart.

"Without the plc board, Newcastle would be able to go and buy the players it wanted."

Michael Martin, editor of another fanzine, True Faith, said: "Leaving the plc behind would put control back in local hands, a move that should be welcomed.

"However, I don't believe Freddie Shepherd has the financial muscle to pull off the deal by himself, and I am worried about who else could get involved.

"It is certainly time for the club to leave behind the legacy of the Halls and move on."

The controversy over public versus private ownership came as Newcastle United published its financial results for the year to July 31.

Operating losses at the club were significantly reduced from £19.1m last year to £5.1m.

The club increased turnover by 22 per cent to £54.9m, as gate receipts improved because of the greater capacity at St James' Park, which is now 52,218.

Television revenue also increased thanks to the Premier League's improved pay-out to clubs, offsetting the loss of revenue the club suffered from missing out on European qualification last season.

The deficit on player trading was also cut by 38 per cent to £12.3m.

United chairman John Fender said: "The group has a robust financial base with increasing revenues and a cost base under tight control.

"With the established playing squad, the enlarged stadium and the continued support of our magnificent fans we look to the future with confidence."

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