Administration?

[Parky]

Administration will depend on a number of things not least:

 

1. What exactly people are offering for the club - regardless of what people think its worth, what are people offering?

2. How much the club is sucking up cash each month at present

3. What is the realisable fire sale value of the assets of the club in adminstration bearing in mind, Ashley is the bank and will get first dibs on any value.

 

I would have expected the club to be worth more as a going conern than in adminstration but the debt clouds the issue, as does these on-going contract costs as does what people are actually offering and how much cash is being sucked up each month the business continues to operate in 'limbo'.

 

Initial thought is that adminstration is a ridiculous notion, but I wouldn't discount anything with that man.

 

 

 

My guess is that he is engineering a scenario to suit himself, what that is will become clear soon.

[quayside]

Administration will depend on a number of things not least:

 

1. What exactly people are offering for the club - regardless of what people think its worth, what are people offering?

2. How much the club is sucking up cash each month at present

3. What is the realisable fire sale value of the assets of the club in adminstration bearing in mind, Ashley is the bank and will get first dibs on any value.

 

I would have expected the club to be worth more as a going conern than in adminstration but the debt clouds the issue, as does these on-going contract costs as does what people are actually offering and how much cash is being sucked up each month the business continues to operate in 'limbo'.

 

Initial thought is that adminstration is a ridiculous notion, but I wouldn't discount anything with that man.

 

 

 

My guess is that he is engineering a scenario to suit himself, what that is will become clear soon.

 

It could be what you say, or he may just have rabbit in the headlights syndrome - f*cked, in an alien place and nowhere to go.

 

I agree with Slugsy and can't see how Administration helps Ashley. I'm no expert on insolvency law but the idea. floated on here, of syphoning off assets owned by the club into a separate entity and sticking what is left into Administration is surely illegal. 

[Parky]

Administration will depend on a number of things not least:

 

1. What exactly people are offering for the club - regardless of what people think its worth, what are people offering?

2. How much the club is sucking up cash each month at present

3. What is the realisable fire sale value of the assets of the club in adminstration bearing in mind, Ashley is the bank and will get first dibs on any value.

 

I would have expected the club to be worth more as a going conern than in adminstration but the debt clouds the issue, as does these on-going contract costs as does what people are actually offering and how much cash is being sucked up each month the business continues to operate in 'limbo'.

 

Initial thought is that adminstration is a ridiculous notion, but I wouldn't discount anything with that man.

 

 

 

My guess is that he is engineering a scenario to suit himself, what that is will become clear soon.

 

It could be what you say, or he may just have rabbit in the headlights syndrome - f*cked, in an alien place and nowhere to go.

 

I agree with Slugsy and can't see how Administration helps Ashley. I'm no expert on insolvency law but the idea. floated on here, of syphoning off assets owned by the club into a separate entity and sticking what is left into Administration is surely illegal.  

 

Of course it is.

 

My feeling is that the puzzle is something to do with the player contracts ie the easiest way to strike them. Admin could be the easiest way to get these cunts off our books is one theory. Something is definitely not right.

[Dave]

http://www.dailymail.co.uk/sport/football/article-1202592/Will-Newcastle-follow-Leeds-latest-damned-United.html?ITO=1490

Another is that Ashley’s systems have been shown not to work. His inappropriate off-field appointments culminated last season in relegation. The club are up for sale but, despite managing director Derek Llambias’s claim weeks ago that at least two offers had met the £100m asking price, there has been no movement.

 

Bankers Seymour Pierce have been commissioned to sell Newcastle but they failed to do so last year when Ashley first put the club on the market. Keith Harris had originally stated ‘the end of June’ as a deadline but the end of July approaches, which is why yesterday the rumour of a Leeds-like plunge into administration returned with zest.

 

As Ashley would be the major creditor, administration would seem an odd move financially. But Ashley could probably take his losses at Newcastle, which would be close to £250m, and set them against profit at his other companies, such as Sports Direct. Ashley’s tax liability would then be reduced and his loss not so great.

 

Friday has emerged as being possibly significant simply because it is the end of the month. Ashley has a basic economic calculation: does he make more money from selling the club or from administration?

 

A third possibility is that he keeps Newcastle, but that would surely mean pumping in fresh cash, and that is clearly not his preferred option. He would also have to appoint a manager.

 

What the Football League will confirm is that Newcastle being placed in administration would bring an immediate 10-point deduction as they prepare to begin life in the Championship.

 

But that would no longer be Ashley’s responsibility. He has been regarded as an absentee landlord from almost the day he bought the club, and the fact he and Llambias missed Sir Bobby Robson’s charity match at St James’ Park on Sunday is seen as another example of their desire to be rid of Newcastle.

[thewellander]

I never thought administration was at all possible until I read that article. What a mess.

[CaliMag]

Thanks Dave. A well written article.

 

If we do go into administration I hope it happens as soon as possible.

[thewellander]

Imagine how low the spirits among the players will get if they have to start with a 10 point reduction. They seem ready to all hang up their boots as it is, and I can't imagine that they'll fight to overcome those odds.

[midds]

Are there any benefits for Ashley personally if he were to put us into administration?   

 

As Ashley would be the major creditor, administration would seem an odd move financially. But Ashley could probably take his losses at Newcastle, which would be close to £250m, and set them against profit at his other companies, such as Sports Direct. Ashley’s tax liability would then be reduced and his loss not so great.

 

 

Oh. Shit. 

 

[nufc4eva]

If we go into administration and I actually expect this to happen to be honest. I think it will take us years to get back to the premier league and we will end up relegated this year

[Dave]

As Ashley would be the major creditor, administration would seem an odd move financially. But Ashley could probably take his losses at Newcastle, which would be close to £250m, and set them against profit at his other companies, such as Sports Direct. Ashley’s tax liability would then be reduced and his loss not so great.

 

Friday has emerged as being possibly significant simply because it is the end of the month. Ashley has a basic economic calculation: does he make more money from selling the club or from administration?

 

Can anyone explain this to me please?

 

I still don't understand why he'd prefer to take the relative pennies on offer from administration over the £60m (or whatever) offered by Shepherd.

[Guest Heneage]

Now I'm no Alan Sugar, but surely £60m -£250m is better than £0 - £250m.

[Groo]

As Ashley would be the major creditor, administration would seem an odd move financially. But Ashley could probably take his losses at Newcastle, which would be close to £250m, and set them against profit at his other companies, such as Sports Direct. Ashley’s tax liability would then be reduced and his loss not so great.

 

Friday has emerged as being possibly significant simply because it is the end of the month. Ashley has a basic economic calculation: does he make more money from selling the club or from administration?

 

Can anyone explain this to me please?

 

I still don't understand why he'd prefer to take the relative pennies on offer from administration over the £60m (or whatever) offered by Shepherd.

 

because it would be a tax loss, thus he could make up more than 60M by having his overall tax bill reduced.

 

Thats the way I read it in any case.

[CaliMag]

As Ashley would be the major creditor, administration would seem an odd move financially. But Ashley could probably take his losses at Newcastle, which would be close to £250m, and set them against profit at his other companies, such as Sports Direct. Ashley’s tax liability would then be reduced and his loss not so great.

 

Friday has emerged as being possibly significant simply because it is the end of the month. Ashley has a basic economic calculation: does he make more money from selling the club or from administration?

 

Can anyone explain this to me please?

 

I still don't understand why he'd prefer to take the relative pennies on offer from administration over the £60m offered by Shepherd.

 

I am no expert on British Tax Law, however I knwo that this could easily be done in the States by...

1. NUFC is a seperate entity that has outstanding debts

2. NUFC goes into administration and sells most of its assets in an effort to settle those debts.

3. Fire sale of salable items occurs (like players and properties like SJP, the training ground, parking areas, etc). Not necessarily all salable items would be sold but liabilities (read as players) certainly would be.

4. Debts owed may have legal priority to some institutions over others. Example NUFC owes outstanding debt to BT (hasn't paid bills in months), a loan from a bank and loans from Ashley. Ashley gets paid first by prior agreement in original loan.

5. Ashley takes a loss on the loans

6. Ashely counts this loss against profits form his other holdings and assets - the gov't was going to tax him on his profits from Sports Direct, interest earned, etc - say in the order of 20 million pounds, BUT he claims losses of 100m- therefore pays no taxes. Making his actual loss only 80m

[CaliMag]

The trick is nobody knows what the tipping point is for Ashley on his tax bill.

 

His accountants have probably already worked this out and this is why Ashley wont budge.

[TRon]

Are there any benefits for Ashley personally if he were to put us into administration?   

 

As Ashley would be the major creditor, administration would seem an odd move financially. But Ashley could probably take his losses at Newcastle, which would be close to £250m, and set them against profit at his other companies, such as Sports Direct. Ashleys tax liability would then be reduced and his loss not so great.

 

 

Oh. Shit. 

 

 

Can he actually use tax losses from one company to offset against profits from a totally different company?

[CaliMag]

Are there any benefits for Ashley personally if he were to put us into administration?   

 

As Ashley would be the major creditor, administration would seem an odd move financially. But Ashley could probably take his losses at Newcastle, which would be close to £250m, and set them against profit at his other companies, such as Sports Direct. Ashleys tax liability would then be reduced and his loss not so great.

 

 

Oh. s***. 

 

 

Can he actually use tax losses from one company to offset against profits from a totally different company?

 

Good question. In the States he could.

[midds]

Are there any benefits for Ashley personally if he were to put us into administration?   

 

As Ashley would be the major creditor, administration would seem an odd move financially. But Ashley could probably take his losses at Newcastle, which would be close to £250m, and set them against profit at his other companies, such as Sports Direct. Ashley’s tax liability would then be reduced and his loss not so great.

 

 

Oh. Shit. 

 

 

Can he actually use tax losses from one company to offset against profits from a totally different company?

 

Apparently so.

 

Wouldn't mind someone clarifying it though. 

[Dave]

So if we did go into administration, we'd start the season on -10 points, have no players, no manager or owner still, and Ashley could (depending on the sums) cut his losses and fuck off?

 

Well that would be just great. Quite possibly the end of the club as a serious entity altogether.

[madras]

So if we did go into administration, we'd start the season on -10 points, have no players, no manager or owner still, and Ashley could (depending on the sums) cut his losses and f*** off?

 

Well that would be just great. Quite possibly the end of the club as a serious entity altogether.

on the bright side there must be a reason why he didnt do that weeks a go

[Dave]

Alternatively could someone like Shepherd theoretically pick up the rest of the club (SJP, training ground, youngsters etc) for peanuts and have that remaining cash he was offering to spend on players?

[dustynrg]

And his profits from SD look like they've tumbled as well. I expect this has been posted before somewhere.

 

http://www.guardian.co.uk/business/2009/jul/16/sports-direct-profits-crash?commentpage=1

 

 

 

 

[Dave]

So if we did go into administration, we'd start the season on -10 points, have no players, no manager or owner still, and Ashley could (depending on the sums) cut his losses and f*** off?

 

Well that would be just great. Quite possibly the end of the club as a serious entity altogether.

on the bright side there must be a reason why he didnt do that weeks a go

 

The results for Sports Direct only came out 11 days ago though. Perhaps he's only just making his mind up?

[Dave]

Fully expecting to be corrected here btw, I've no idea about this business.

[Big Geordie]

Are there any benefits for Ashley personally if he were to put us into administration?   

 

As Ashley would be the major creditor, administration would seem an odd move financially. But Ashley could probably take his losses at Newcastle, which would be close to £250m, and set them against profit at his other companies, such as Sports Direct. Ashleys tax liability would then be reduced and his loss not so great.

 

 

Oh. s***. 

 

 

Can he actually use tax losses from one company to offset against profits from a totally different company?

 

I 'think' a certain chairman of a club based in Teesside did something similar with that club and his own haulage business. Used one to offset the other, allegedly.

 

I wonder if those who were shouting so loudly a few weeks ago that administration was never going to happen are still confident now?

 

Should it happen, I've no doubt there will be an almighty scramble to buy NUFC at a greatly reduced price, but the damage that has happened from this will take years, if not decades to repair. May well open the way for the NUST to become involved along with a consortium which has been mooted of recent.

[Crumpy Gunt]

I'm no financial expert but if he puts us into Admin wouldn't a new owner just be £1 away? Administrators will sell for the best possible price they could get. For example set a date 1 month hence and the highest bidder gets it.

 

Not sure about the outstanding debt, I'd assume player wages would need to be met or a massive point deduction would follow (Lutons 30 points) so a new owner will need to more than cover player wages immediately. Players not paid can literally walk away or the administartor will accept derisory amounts for players (derisory players agreed)

 

Probably all bullshit but if it could be took over I'd take the 10point hit just to get shot of the idiot running the club.