Raconteur Posted March 15, 2018 Share Posted March 15, 2018 I have a question: If they go into administration , and assuming the usual thing happens and a new club is born. What happens to the players contracts? People like Rodwell and Cattermole are the reason they will never get out of the mess they are in. Do the contracts get ripped up and they effectively free themselves of these leaches and adversely open up the way for their better players to be poached for free to other clubs (not that they have many of the type anyone would want) ? On this note would it make sense for them to go into admin this season when they're all but dead but not quite? Get the penalty this season rather than next. I have no pretense to be a financial expert, but what I have gleaned is... It is currently costing Short £20m per season to keep the club afloat and he wants rid as soon as possible. He is willing to virtually give the club away to anyone willing to take on the club and its other £30m of debt secured against the parachute payments, writing off the remaining debt owed to his company. Administration would allow Short to simply walk away, the administrators would look to find a new owner, who would be liable to pay the secured creditors (including the £30m) and 30% of what is owed to the unsecured creditors (including Short's company). Going into administration before the 22nd deadline would mean that the club doesn't end going into next season with a points deduction, which would almost certainly lessen the chances of finding a buyer. Unless I'm completely wrong in the above (which is a distinct possibility) if relegation is still looking inevitable on the 22nd there may be significant benefits for Short in pulling the plug and putting the club into administration. The external debt is £68million secured against the parachute payments isn't it? The rest of the debt is owed to Short so he would be writing his own money off which doesn't make sense to me. Makes perfect sense - he's had enough. He was trying to sell it for a quid (which is effectively the £68million JB was talking about). That's why they can't be sold, because that's a big pile of cash for a fucking shite club staring at League 1. And yeah, it's only mortgaged, but they're bleeding cash. Administration is the smart move if they're punished this season not next - if they wait until next season having been relegated with Premier League wages still on the books then they're completely fucked. Link to post Share on other sites More sharing options...
Jackie Broon Posted March 15, 2018 Share Posted March 15, 2018 I have a question: If they go into administration , and assuming the usual thing happens and a new club is born. What happens to the players contracts? People like Rodwell and Cattermole are the reason they will never get out of the mess they are in. Do the contracts get ripped up and they effectively free themselves of these leaches and adversely open up the way for their better players to be poached for free to other clubs (not that they have many of the type anyone would want) ? On this note would it make sense for them to go into admin this season when they're all but dead but not quite? Get the penalty this season rather than next. I have no pretense to be a financial expert, but what I have gleaned is... It is currently costing Short £20m per season to keep the club afloat and he wants rid as soon as possible. He is willing to virtually give the club away to anyone willing to take on the club and its other £30m of debt secured against the parachute payments, writing off the remaining debt owed to his company. Administration would allow Short to simply walk away, the administrators would look to find a new owner, who would be liable to pay the secured creditors (including the £30m) and 30% of what is owed to the unsecured creditors (including Short's company). Going into administration before the 22nd deadline would mean that the club doesn't end going into next season with a points deduction, which would almost certainly lessen the chances of finding a buyer. Unless I'm completely wrong in the above (which is a distinct possibility) if relegation is still looking inevitable on the 22nd there may be significant benefits for Short in pulling the plug and putting the club into administration. The external debt is £68million secured against the parachute payments isn't it? The rest of the debt is owed to Short so he would be writing his own money off which doesn't make sense to me. He's indicated that he would give the club away to anyone willing to take on the debt, and may be willing to write off his part of the debt as part of that. www.bbc.co.uk/sport/amp/football/43157628 Realistically he'll know he is not getting that money back, the club is a money pit and is just going to cost him more and more millions the longer he owns it. It makes perfect sense to for him to want to cut his losses. Link to post Share on other sites More sharing options...
robm Posted March 15, 2018 Share Posted March 15, 2018 I have a question: If they go into administration , and assuming the usual thing happens and a new club is born. What happens to the players contracts? People like Rodwell and Cattermole are the reason they will never get out of the mess they are in. Do the contracts get ripped up and they effectively free themselves of these leaches and adversely open up the way for their better players to be poached for free to other clubs (not that they have many of the type anyone would want) ? On this note would it make sense for them to go into admin this season when they're all but dead but not quite? Get the penalty this season rather than next. I have no pretense to be a financial expert, but what I have gleaned is... It is currently costing Short £20m per season to keep the club afloat and he wants rid as soon as possible. He is willing to virtually give the club away to anyone willing to take on the club and its other £30m of debt secured against the parachute payments, writing off the remaining debt owed to his company. Administration would allow Short to simply walk away, the administrators would look to find a new owner, who would be liable to pay the secured creditors (including the £30m) and 30% of what is owed to the unsecured creditors (including Short's company). Going into administration before the 22nd deadline would mean that the club doesn't end going into next season with a points deduction, which would almost certainly lessen the chances of finding a buyer. Unless I'm completely wrong in the above (which is a distinct possibility) if relegation is still looking inevitable on the 22nd there may be significant benefits for Short in pulling the plug and putting the club into administration. The external debt is £68million secured against the parachute payments isn't it? The rest of the debt is owed to Short so he would be writing his own money off which doesn't make sense to me. Makes perfect sense - he's had enough. He was trying to sell it for a quid (which is effectively the £68million JB was talking about). That's why they can't be sold, because that's a big pile of cash for a fucking shite club staring at League 1. And yeah, it's only mortgaged, but they're bleeding cash. Administration is the smart move if they're punished this season not next - if they wait until next season having been relegated with Premier League wages still on the books then they're completely fucked. But he could easily write his own debt off anyway by converting it to shares as I understand it without the points deduction. He can't write off the external debt so what does he gain? Link to post Share on other sites More sharing options...
Jackie Broon Posted March 15, 2018 Share Posted March 15, 2018 He gains from administration in that it would allow him to just walk away from the club. Otherwise he has to find someone to take it off his hands, which isn't looking likely. Link to post Share on other sites More sharing options...
SteV Posted March 15, 2018 Share Posted March 15, 2018 There's no way they go into administration. At least not this year anyway. Short isn't just going to write off somewhere in the region of 50 - 100M (which is what's owed to him/his company) just because he can't be bothered with the hassle anymore. All the cost-cutting that they've been doing is an exercise in making sure they are able to avoid administration. The parachute payment for this year will have covered the running costs and hopefully from there point of view, paid off a little of the external debt/loan to that American company. There's an potentially an issue next summer when that loan is supposed to be repaid, but in all likelihood they'll be able to refinance what's left of it (albeit at a worse rate) and they'll just continue on. No administration but no investment and no hope unless they can find a buyer who's capable and willing to pay off the debt. Which gets more unlikely the further they sink. Link to post Share on other sites More sharing options...
cp40 Posted March 15, 2018 Share Posted March 15, 2018 There's no way they go into administration. At least not this year anyway. Short isn't just going to write off somewhere in the region of 50 - 100M (which is what's owed to him/his company) just because he can't be bothered with the hassle anymore. All the cost-cutting that they've been doing is an exercise in making sure they are able to avoid administration. The parachute payment for this year will have covered the running costs and hopefully from there point of view, paid off a little of the external debt/loan to that American company. There's an potentially an issue next summer when that loan is supposed to be repaid, but in all likelihood they'll be able to refinance what's left of it (albeit at a worse rate) and they'll just continue on. No administration but no investment and no hope unless they can find a buyer who's capable and willing to pay off the debt. Which gets more unlikely the further they sink. isnt it worthless at the moment and losing him £2m a month? and only going to get worse. Link to post Share on other sites More sharing options...
Jackie Broon Posted March 15, 2018 Share Posted March 15, 2018 There's no way they go into administration. At least not this year anyway. Short isn't just going to write off somewhere in the region of 50 - 100M (which is what's owed to him/his company) just because he can't be bothered with the hassle anymore. All the cost-cutting that they've been doing is an exercise in making sure they are able to avoid administration. The parachute payment for this year will have covered the running costs and hopefully from there point of view, paid off a little of the external debt/loan to that American company. There's an potentially an issue next summer when that loan is supposed to be repaid, but in all likelihood they'll be able to refinance what's left of it (albeit at a worse rate) and they'll just continue on. No administration but no investment and no hope unless they can find a buyer who's capable and willing to pay off the debt. Which gets more unlikely the further they sink. There's no way they go into administration. At least not this year anyway. Short isn't just going to write off somewhere in the region of 50 - 100M (which is what's owed to him/his company) just because he can't be bothered with the hassle anymore. All the cost-cutting that they've been doing is an exercise in making sure they are able to avoid administration. The parachute payment for this year will have covered the running costs and hopefully from there point of view, paid off a little of the external debt/loan to that American company. There's an potentially an issue next summer when that loan is supposed to be repaid, but in all likelihood they'll be able to refinance what's left of it (albeit at a worse rate) and they'll just continue on. No administration but no investment and no hope unless they can find a buyer who's capable and willing to pay off the debt. Which gets more unlikely the further they sink. "Around half of the debt, £69m, is owed to the London-based businessman personally and it is thought the billionaire may forego some or all of that figure as part of any deal." http://www.bbc.co.uk/sport/amp/football/43157628 Link to post Share on other sites More sharing options...
Benwell Lad Posted March 15, 2018 Share Posted March 15, 2018 Basically they're fucked whichever way they turn. Years of reckless spending have left them so vulnerable that even the panic measures they're now implementing are way too late. Living way above your means always gets you eventually. It's left to the narcissist twins Coleman and Bain to make brave noises, but they know as well as anyone that the dross on the pitch is currently the least of their worries. Link to post Share on other sites More sharing options...
STM Posted March 15, 2018 Share Posted March 15, 2018 They could have least signed some decent players before they did a Leeds. Link to post Share on other sites More sharing options...
David Icke - Son of God Posted March 15, 2018 Share Posted March 15, 2018 I have a question: If they go into administration , and assuming the usual thing happens and a new club is born. What happens to the players contracts? People like Rodwell and Cattermole are the reason they will never get out of the mess they are in. Do the contracts get ripped up and they effectively free themselves of these leaches and adversely open up the way for their better players to be poached for free to other clubs (not that they have many of the type anyone would want) ? On this note would it make sense for them to go into admin this season when they're all but dead but not quite? Get the penalty this season rather than next. I have no pretense to be a financial expert, but what I have gleaned is... It is currently costing Short £20m per season to keep the club afloat and he wants rid as soon as possible. He is willing to virtually give the club away to anyone willing to take on the club and its other £30m of debt secured against the parachute payments, writing off the remaining debt owed to his company. Administration would allow Short to simply walk away, the administrators would look to find a new owner, who would be liable to pay the secured creditors (including the £30m) and 30% of what is owed to the unsecured creditors (including Short's company). Going into administration before the 22nd deadline would mean that the club doesn't end going into next season with a points deduction, which would almost certainly lessen the chances of finding a buyer. Unless I'm completely wrong in the above (which is a distinct possibility) if relegation is still looking inevitable on the 22nd there may be significant benefits for Short in pulling the plug and putting the club into administration. The external debt is £68million secured against the parachute payments isn't it? The rest of the debt is owed to Short so he would be writing his own money off which doesn't make sense to me. Nor, the debt is secured against the SoL, the training ground and a certain amount of equity in the club. Link to post Share on other sites More sharing options...
sleazy Posted March 15, 2018 Share Posted March 15, 2018 Mackem at work (kinda like a mag at work but real), reckons theres to be some big announcement today. As much as I am enjoying their plummet I'm not sure I'd like to see them go out of business (which I dont think would happen). Link to post Share on other sites More sharing options...
SteV Posted March 15, 2018 Share Posted March 15, 2018 I think it's probably questionable that he's losing as much as £2M a month, that would seem very excessive given all the players (bar Rodwell) seemingly had a 40% pay cut and they've spent virtually nothing. Even if he was losing £2M a month, I still don't think he'd sack off the £69M owed and walk away, maybe a portion of it, but he isn't just going to walk away for nothing. But essentially, without substantial new investment, it's a long road back, administration or no administration. Link to post Share on other sites More sharing options...
Minhosa Posted March 15, 2018 Share Posted March 15, 2018 Mackem at work (kinda like a mag at work but real), reckons theres to be some big announcement today. As much as I am enjoying their plummet I'm not sure I'd like to see them go out of business (which I dont think would happen). This was denied by their local journos yesterday. Link to post Share on other sites More sharing options...
Matt Posted March 15, 2018 Share Posted March 15, 2018 He gains from administration in that it would allow him to just walk away from the club. Otherwise he has to find someone to take it off his hands, which isn't looking likely. No he doesn't. He can just put it into voluntary liquidation. Short's holding of the club- both equity and debt are worth absolutely zero. Only once the business is worth more than the debt owed to Guggenheim will Short get a penny. Guggenheim may opt to appoint an administrator if Sunderland fail to meet the financial covenant tests in the loan agreement, at which point they may accelerate the debt (demand it all back) and on the basis Sunderland have no means to pay, then either side could appoint administrators. However this can be done without the need for a costly administration process if Short and Guggenheim mutually agree a debt-for-equity swap, which would hand control to Guggenheim and Short would be left with nothing (or virtually nothing). Link to post Share on other sites More sharing options...
mrmojorisin75 Posted March 15, 2018 Share Posted March 15, 2018 Mackem at work (kinda like a mag at work but real), reckons theres to be some big announcement today. As much as I am enjoying their plummet I'm not sure I'd like to see them go out of business (which I dont think would happen). I'm the same, prefer to see them cling onto life and sink slowly through the leagues year by year. Link to post Share on other sites More sharing options...
pinkeye Posted March 15, 2018 Share Posted March 15, 2018 He gains from administration in that it would allow him to just walk away from the club. Otherwise he has to find someone to take it off his hands, which isn't looking likely. No he doesn't. He can just put it into voluntary liquidation. Short's holding of the club- both equity and debt are worth absolutely zero. Only once the business is worth more than the debt owed to Guggenheim will Short get a penny. Guggenheim may opt to appoint an administrator if Sunderland fail to meet the financial covenant tests in the loan agreement, at which point they may accelerate the debt (demand it all back) and on the basis Sunderland have no means to pay, then either side could appoint administrators. However this can be done without the need for a costly administration process if Short and Guggenheim mutually agree a debt-for-equity swap, which would hand control to Guggenheim and Short would be left with nothing (or virtually nothing). This is pretty much what I was thinking as well, the external debt owner (Guggenheim) has more to lose than Short and frankly if I was the owner of that debt and such rumours were floating around I would be making some serious moves to protect my investment to the point where I may even consider taking ownership of the club and putting my own people in charge to try to stabilize the rot and then to see what can be salvaged. Kind of like a VC investor taking the bits that are worth anything and scrapping the rest. Link to post Share on other sites More sharing options...
Disco Posted March 15, 2018 Share Posted March 15, 2018 If we were remotely competent I wonder if there's any half decent kids in their academy we could nab. Link to post Share on other sites More sharing options...
STM Posted March 15, 2018 Share Posted March 15, 2018 We all know that they will go into administration the second relegation is all but confirmed. Link to post Share on other sites More sharing options...
cp40 Posted March 15, 2018 Share Posted March 15, 2018 I thought there was rules around administration near the end of a season for avoiding the impact of point reductions? Link to post Share on other sites More sharing options...
SteV Posted March 15, 2018 Share Posted March 15, 2018 They're not going into administration this season like. Would make absolutely no financial sense whatsoever. Link to post Share on other sites More sharing options...
cp40 Posted March 15, 2018 Share Posted March 15, 2018 just checked, they have 1 week to avoid penalties carrying over to next season. Link to post Share on other sites More sharing options...
NG32 Posted March 15, 2018 Share Posted March 15, 2018 Christ almighty! Link to post Share on other sites More sharing options...
cp40 Posted March 15, 2018 Share Posted March 15, 2018 Christ almighty! 'The Football League saw both cases as clubs trying to exploit a loophole, and changed the rules. From 2007–08, any club entering administration after the fourth Thursday in March would have their 10-point deduction suspended until the following season. If the club is relegated the points will be deducted from their tally at the start of next season. If the club stays up the 10 points will be taken off their final total' Link to post Share on other sites More sharing options...
NG32 Posted March 15, 2018 Share Posted March 15, 2018 Christ almighty! 'The Football League saw both cases as clubs trying to exploit a loophole, and changed the rules. From 2007–08, any club entering administration after the fourth Thursday in March would have their 10-point deduction suspended until the following season. If the club is relegated the points will be deducted from their tally at the start of next season. If the club stays up the 10 points will be taken off their final total' Ouch! Link to post Share on other sites More sharing options...
Paully Posted March 15, 2018 Share Posted March 15, 2018 Christ almighty! 'The Football League saw both cases as clubs trying to exploit a loophole, and changed the rules. From 2007–08, any club entering administration after the fourth Thursday in March would have their 10-point deduction suspended until the following season. If the club is relegated the points will be deducted from their tally at the start of next season. If the club stays up the 10 points will be taken off their final total' Oooof, Preston and Barnsley wins this weekend will get Mr Short pondering if he is even slightly considering it! Link to post Share on other sites More sharing options...
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