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Various: Mike Ashley in talks with Sheikh Khaled bin Zayed Al Nehayan


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Can anyone answer a simple question about this Ashley loan from the purchase of the club if it was verified that it was actually debts to pay off or just a magic figure he created ?    was it independently checked or Ashley using his own money men making it up to shaft everyone ?

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Can anyone answer a simple question about this Ashley loan from the purchase of the club if it was verified that it was actually debts to pay off or just a magic figure he created ?    was it independently checked or Ashley using his own money men making it up to shaft everyone ?

 

Someone with more accountancy brains might correct me here but... the £70m-ish debt Ashley inherited was comprised of some transfer fee instalments we still owed and a bank loan for the stadium expansion. That loan had a clause in it which demanded, in the event of a takeover, the stadium's mortgage repayments had to be paid in full. That's what people are getting at when suggesting Ashley cocked-up the due diligence (i.e. not realising the bank loan would have to be paid off).

 

The other £70m debt we've accrued since then is through his own mismanagement.

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Was that Fat Mikes helicopter leaving Newcastle there? Black one around 7ish. Wonder if Rafa had allowed him to come North?

I have seen that one a few times flying over Burnopfield where I live and I work near the airport and seen it there a few times. At first I thought it was his but I think it’s some Northumberland tours helicopter unfortunately.

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Was that Fat Mikes helicopter leaving Newcastle there? Black one around 7ish. Wonder if Rafa had allowed him to come North?

He doesn't have a specific helicopter anymore or rather hasn't ever, rather the company he uses often gives him the same helicopter as and when they can. 
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Can anyone answer a simple question about this Ashley loan from the purchase of the club if it was verified that it was actually debts to pay off or just a magic figure he created ?    was it independently checked or Ashley using his own money men making it up to shaft everyone ?

 

Someone with more accountancy brains might correct me here but... the £70m-ish debt Ashley inherited was comprised of some transfer fee instalments we still owed and a bank loan for the stadium expansion. That loan had a clause in it which demanded, in the event of a takeover, the stadium's mortgage repayments had to be paid in full. That's what people are getting at when suggesting Ashley cocked-up the due diligence (i.e. not realising the bank loan would have to be paid off).

 

The other £70m debt we've accrued since then is through his own mismanagement.

 

Made this point a few times over the years - pretty much every loan agreement (especially one for £50m+) will have a change of control clause that requires prepayment of the loan.  It's absolute basic acquisition finance.  There's no chance whatsoever that Ashley and Freshfields didn't know the loan agreement would contain this clause.  No chance whatsoever.

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:dontknow: I'm sure you're right. What are folks referring to when they talk about him not doing due diligence?

 

Sorry - phrased that as if it was directed at you.  Was more a general frustration about how it's been portrayed by Ashley.

 

Regarding the due diligence, it may well be right that he didn't do any.  However, most acquisitions will have weeks and weeks of due diligence done to assess the assets and liabilities of the target.  I've certainly never worked on a deal where no DD whatsoever has been done - there's no way you can value the company or know what you're buying.  At an absolute bare minimum, you would look at the latest set of financial statements and that would show the debt.  They knew the debt was there and they knew it had to be prepaid.

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With hindsight I think that was just him already playing the fans. Wasn't it him/his men that trotted out the 'missed this in due diligence' line not long after taking over? Reckon it was just the early excuse seeds being planted.

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The thing about him supposedly not doing due diligence and being caught out by the debts was spouted by the likes of Derek Llambias, from the very first time they tried to deflect from the lack of investment; pretending poor Mike was done over and that we needed to be so grateful that he'd bailed us out and stopped us 'doing a Leeds'.

 

Lots of people bought it as well. Some still do.

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The thing about him supposedly not doing due diligence and being caught out by the debts was spouted by the likes of Derek Llambias, from the very first time they tried to deflect from the lack of investment; pretending poor Mike was done over and that we needed to be so grateful that he'd bailed us out and stopped us 'doing a Leeds'.

 

Lots of people bought it as well. Some still do.

 

I'd not even contemplated that that was the first lie tbh. I feel incredibly dumb now, if that was the case the purchase of us was Machiavellian from the start. But of course it was because it's him.

 

Shit.

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Also in recent years, we have had interviews with the likes of SJH who said the offer for the club came in 1 day and by the end of the week, the sale had been completed. It would be virtually impossible to do full due diligence in that time frame for what is a multi-million-pound company which at the time was also on the stock market.

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Also in recent years, we have had interviews with the likes of SJH who said the offer for the club came in 1 day and by the end of the week, the sale had been completed. It would be virtually impossible to do full due diligence in that time frame for what is a multi-million-pound company which at the time was also on the stock market.

Doing DD for a business like NUFC wouldn't actually be that tough. It's not a complicated business - easily identifiable revenue streams, no foreign subsidiaries etc, but I agree that you couldn't do a full DD exercise in under a week (although Freshfields would certainly have the resources to do so in a very short period of time if they had to).

 

But as I said above, the accounts would have shown the debt - and there's no chance that they didn't look at the accounts - the debt was well publicised as we had expanded the stadium, the mandatory prepayment clause was an absolute given and, in any event, you can still negotiate with the bank to roll the debt despite the change of control.

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there are so many infuriating things about Ashley, but one that i sincerely don't get is, if he wants to use NUFC & st james park as an advertising vehicle for his sports direct company then why not try to make NUFC  a football powerhouse?  wouldn't his sales skyrocket if suddenly the magpies were beating the chelseas, liverpools & manchester clubs; not to mention going toe to toe with big champions league teams?  i would think his merchandise would be flying off the shelves--or am i missing something?

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there are so many infuriating things about Ashley, but one that i sincerely don't get is, if he wants to use NUFC & st james park as an advertising vehicle for his sports direct company then why not try to make NUFC  a football powerhouse?  wouldn't his sales skyrocket if suddenly the magpies were beating the chelseas, liverpools & manchester clubs; not to mention going toe to toe with big champions league teams?  i would think his merchandise would be flying off the shelves--or am i missing something?

Since he bought Newcastle SD shares have sky rocketed so he's getting all needs so he's happy

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there are so many infuriating things about Ashley, but one that i sincerely don't get is, if he wants to use NUFC & st james park as an advertising vehicle for his sports direct company then why not try to make NUFC  a football powerhouse?  wouldn't his sales skyrocket if suddenly the magpies were beating the chelseas, liverpools & manchester clubs; not to mention going toe to toe with big champions league teams?  i would think his merchandise would be flying off the shelves--or am i missing something?

Another question is, does he really need us as an advertising vehicle or even the need to advertise?

Sports Direct is the largest sports retailer in the U.K. it is the only real national chain which sells it’s goods at it’s price point (JD being priced higher).

He has a clientele who turn up to his shops as a first point of call. Advertising would be like saying Orimark needs to advertise. People who want £3 t-shirts (or £30 trainers in Sports Direct’s case) just don’t need advertise as the majority of their customers know that other shops won’t be selling that low and price is the most important factor for them.

He has SJP decked out in Sports Direct advertising, but how many people actually watch an NUFC, see his advertising in the background and think that they should go in and buy some trainers and cheap socks?

His customers are likely automatically thinking of getting their purchases from SD, and other who shops there do so because simply put theirs not another store on the high street selling what they want.

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