trophyshy 7058 Posted July 27, 2009 Share Posted July 27, 2009 Worst case scenario is Mike refuses to sell it cheap, the players insist on staying and keeping their valuable contracts and due to considerable drop in revenue we run out of money/Ashley refuses to put any more in. We can't pay our bills and adminstrators are called in. Can anyone with expertise (Johnthebrief?) outline the pros and cons of this and the likelyhood, based on current information/circumstances. Thanks. Link to comment Share on other sites More sharing options...
Park Life 71 Posted July 27, 2009 Share Posted July 27, 2009 Worth reading through. http://www.newcastle-online.org/nufcforum/...ic,62694.0.html Link to comment Share on other sites More sharing options...
trophyshy 7058 Posted July 27, 2009 Author Share Posted July 27, 2009 ah cheers Parky, I never go to the dark side but shall in this instance. Link to comment Share on other sites More sharing options...
meshman 0 Posted July 27, 2009 Share Posted July 27, 2009 arrgh - dont make me go over there ! my eyes ! my eyes ! Link to comment Share on other sites More sharing options...
Guest alex Posted July 27, 2009 Share Posted July 27, 2009 Christ, where's indi when you need him? He made an excellent post last week detailing exactly why we will not be going into administration. I'm bored of hearing the word. That's as far as I got tbh. Link to comment Share on other sites More sharing options...
Guest TheNewinsider Posted July 27, 2009 Share Posted July 27, 2009 Worst case scenario is Mike refuses to sell it cheap, the players insist on staying and keeping their valuable contracts and due to considerable drop in revenue we run out of money/Ashley refuses to put any more in. We can't pay our bills and adminstrators are called in. Can anyone with expertise (Johnthebrief?) outline the pros and cons of this and the likelyhood, based on current information/circumstances. Thanks. I doubt Administration will occur. The main principal of Administration is to protect a company from it's main creditors whilst the business is restructured, in the case of Newcastle Mike Ashley a the main creditor as he gave a £100 million loan towards paying off the clubs debt. Should Newcastle go into Administration then this means that Mike Ashley will likely not get his £100 million investment back, which of course being the businessman he is he will be determined to get as much as he can out of the club. Himself hoping for £100 million out of a sale, then another £100 million from the new owners paying that loan back. Administration would be cutting his losses, and I think its quite clear that the greedy fat cunt is not about to do that. Link to comment Share on other sites More sharing options...
Park Life 71 Posted July 27, 2009 Share Posted July 27, 2009 Christ, where's indi when you need him? He made an excellent post last week detailing exactly why we will not be going into administration. I'm bored of hearing the word. That's as far as I got tbh. There are some good long and considered posts in that thread. When starting it I thought I would just take a kicking start to finish, didn't turn out that way. Link to comment Share on other sites More sharing options...
Park Life 71 Posted July 27, 2009 Share Posted July 27, 2009 Worst case scenario is Mike refuses to sell it cheap, the players insist on staying and keeping their valuable contracts and due to considerable drop in revenue we run out of money/Ashley refuses to put any more in. We can't pay our bills and adminstrators are called in. Can anyone with expertise (Johnthebrief?) outline the pros and cons of this and the likelyhood, based on current information/circumstances. Thanks. I doubt Administration will occur. The main principal of Administration is to protect a company from it's main creditors whilst the business is restructured, in the case of Newcastle Mike Ashley a the main creditor as he gave a £100 million loan towards paying off the clubs debt. Should Newcastle go into Administration then this means that Mike Ashley will likely not get his £100 million investment back, which of course being the businessman he is he will be determined to get as much as he can out of the club. Himself hoping for £100 million out of a sale, then another £100 million from the new owners paying that loan back. Administration would be cutting his losses, and I think its quite clear that the greedy fat cunt is not about to do that. But what if there is no buyer and we can't get rid of the expensive players? Even if we do we might end up getting poor value for them as well as having to cover a part of their salaries. Link to comment Share on other sites More sharing options...
johnthebrief 0 Posted July 27, 2009 Share Posted July 27, 2009 OK, as an alleged insolvency specialist I'll try and explain Administration is often compared with Chapter 11 in the US, in that they are both primarily about giving the company protection from action by its creditors while they reorganise themselves but there are some major differences. Principally, it's the difference between who controls the process. In Chapter 11, the company retains control of its own affairs subject to oversight by the Court, in administration control of the company passes to the administrator who is an independent licensed insolvency practitioner. The choice of who gets to be appointed as administrator ultimately lies with the creditors, particularly any creditor with a floating charge over the business (a kind of mortgage) The job of an administrator once appointed is - in order of priority - first to try and save the business as a going concern, second to achieve a better realisation for creditors than would be likely in liquidation, or third to realise charged assets for the benefit of secured creditors. What that boils down to is that the administrator displaces the existing shareholders/directors and works out what's the best course with the interests of the creditors in mind. It is primarily a means of taking control of the company away from management. Administration is often used, through what's known as a "pre-pack" sale, as a means of ridding a company of unmanageable debt. The idea is the owner puts the company into administration, and buys it back from the administrator for its true net value. The creditors get the sale proceeds and the company carries on free of debt, and everyone lives happily ever after. That therefore begs the question, what would be in it for Ashley? Answer, nothing. If the club were sold as a going concern or broken up by an administrator, the sale proceeds would still be subject to all the same creditor claims as they are now. In this case, because most of the debt is owed to Ashley himself, there'd be no benefit in his taking this route. His net position would be just the same at the end of it. There is of course the bank overdraft (reputed to be about £40m) but it is likely that the bank has the first ranked security and so would clean up on whatever asset value there was on an administration sale - ie the bank would get first dibs on whatever was paid to buy the club. Thorw in the league rules about payment of "football creditors" and there is simply no benefit to anyone in administration of NUFC. The alternative insolvency process to administration is liquidation (also known as winding up). This is a terminal process in which the insolvency practitioner (the liquidator) just converts all the assets into cash and divides it up among the creditors according to security and priority rights. All of a company's contracts terminate on liquidation so player values would vanish. Link to comment Share on other sites More sharing options...
Park Life 71 Posted July 27, 2009 Share Posted July 27, 2009 OK, as an alleged insolvency specialist I'll try and explain Administration is often compared with Chapter 11 in the US, in that they are both primarily about giving the company protection from action by its creditors while they reorganise themselves but there are some major differences. Principally, it's the difference between who controls the process. In Chapter 11, the company retains control of its own affairs subject to oversight by the Court, in administration control of the company passes to the administrator who is an independent licensed insolvency practitioner. The choice of who gets to be appointed as administrator ultimately lies with the creditors, particularly any creditor with a floating charge over the business (a kind of mortgage) The job of an administrator once appointed is - in order of priority - first to try and save the business as a going concern, second to achieve a better realisation for creditors than would be likely in liquidation, or third to realise charged assets for the benefit of secured creditors. What that boils down to is that the administrator displaces the existing shareholders/directors and works out what's the best course with the interests of the creditors in mind. It is primarily a means of taking control of the company away from management. Administration is often used, through what's known as a "pre-pack" sale, as a means of ridding a company of unmanageable debt. The idea is the owner puts the company into administration, and buys it back from the administrator for its true net value. The creditors get the sale proceeds and the company carries on free of debt, and everyone lives happily ever after. That therefore begs the question, what would be in it for Ashley? Answer, nothing. If the club were sold as a going concern or broken up by an administrator, the sale proceeds would still be subject to all the same creditor claims as they are now. In this case, because most of the debt is owed to Ashley himself, there'd be no benefit in his taking this route. His net position would be just the same at the end of it. There is of course the bank overdraft (reputed to be about £40m) but it is likely that the bank has the first ranked security and so would clean up on whatever asset value there was on an administration sale - ie the bank would get first dibs on whatever was paid to buy the club. Thorw in the league rules about payment of "football creditors" and there is simply no benefit to anyone in administration of NUFC. The alternative insolvency process to administration is liquidation (also known as winding up). This is a terminal process in which the insolvency practitioner (the liquidator) just converts all the assets into cash and divides it up among the creditors according to security and priority rights. All of a company's contracts terminate on liquidation so player values would vanish. It's how Bates got hold of Leeds isn't it? Admin doesn't get MA his cash back that's for sure, but it does release him from ever having to put money in again...Non? Link to comment Share on other sites More sharing options...
johnthebrief 0 Posted July 27, 2009 Share Posted July 27, 2009 It's how Bates got hold of Leeds isn't it? Admin doesn't get MA his cash back that's for sure, but it does release him from ever having to put money in again...Non? Only if the administrator sells the club to someone else Which he can just as easily do himself, without the costs of administration or the reduction in price caused by the points deduction Whoever owns the club has got to fund it to keep it trading as a going concern, or else see it go into liquidation and lose all their money Link to comment Share on other sites More sharing options...
Park Life 71 Posted July 27, 2009 Share Posted July 27, 2009 It's how Bates got hold of Leeds isn't it? Admin doesn't get MA his cash back that's for sure, but it does release him from ever having to put money in again...Non? Only if the administrator sells the club to someone else Which he can just as easily do himself, without the costs of administration or the reduction in price caused by the points deduction Whoever owns the club has got to fund it to keep it trading as a going concern, or else see it go into liquidation and lose all their money The problem with all this logic is that the club is actually worth jack shit. In fact it seems more in the toxic debt territory. I don't really know but I have a bad feeling about this. Link to comment Share on other sites More sharing options...
johnthebrief 0 Posted July 27, 2009 Share Posted July 27, 2009 It's how Bates got hold of Leeds isn't it? Admin doesn't get MA his cash back that's for sure, but it does release him from ever having to put money in again...Non? Only if the administrator sells the club to someone else Which he can just as easily do himself, without the costs of administration or the reduction in price caused by the points deduction Whoever owns the club has got to fund it to keep it trading as a going concern, or else see it go into liquidation and lose all their money The problem with all this logic is that the club is actually worth jack shit. In fact it seems more in the toxic debt territory. I don't really know but I have a bad feeling about this. Nah there's definitely some value in there... - player contracts - intellectual property and image rights - goodwill (future ticket sales) - the land and stadium It's a valuable collection of assets, just a bit distressed at the present time Link to comment Share on other sites More sharing options...
Guest alex Posted July 27, 2009 Share Posted July 27, 2009 Do the club own any land? The old training ground at Benwell belonged to the club I think. Does the club even own the academy? (Have a feeling it's another long-term lease. Makes the other stuff seem relatively worthless. Link to comment Share on other sites More sharing options...
snakehips 0 Posted July 27, 2009 Share Posted July 27, 2009 Worst case scenario is Mike refuses to sell it cheap, the players insist on staying and keeping their valuable contracts and due to considerable drop in revenue we run out of money/Ashley refuses to put any more in. We can't pay our bills and adminstrators are called in. Can anyone with expertise (Johnthebrief?) outline the pros and cons of this and the likelyhood, based on current information/circumstances. Thanks. Not for me, that scenario. If LardAsh can't sell the club, he will sell every single player worth anything over 2 to 3 million. And the players wont insist on staying imo. Link to comment Share on other sites More sharing options...
johnthebrief 0 Posted July 27, 2009 Share Posted July 27, 2009 Do the club own any land? The old training ground at Benwell belonged to the club I think. Does the club even own the academy? (Have a feeling it's another long-term lease. Makes the other stuff seem relatively worthless. A long lease has value in itself. Most commercial property is leasehold. Link to comment Share on other sites More sharing options...
Park Life 71 Posted July 27, 2009 Share Posted July 27, 2009 It's how Bates got hold of Leeds isn't it? Admin doesn't get MA his cash back that's for sure, but it does release him from ever having to put money in again...Non? Only if the administrator sells the club to someone else Which he can just as easily do himself, without the costs of administration or the reduction in price caused by the points deduction Whoever owns the club has got to fund it to keep it trading as a going concern, or else see it go into liquidation and lose all their money The problem with all this logic is that the club is actually worth jack shit. In fact it seems more in the toxic debt territory. I don't really know but I have a bad feeling about this. Nah there's definitely some value in there... - player contracts - intellectual property and image rights - goodwill (future ticket sales) - the land and stadium It's a valuable collection of assets, just a bit distressed at the present time I can't see us getting much for the players maybe 25m tops for all that leave Beye, Bassong, Martins, Ricky etc..(We are into Barclays for at least 40m and counting - ((20m every 3 months)). Image rights and intel prop is worth about 5m a year tops we have no Kaka's or a big brand sponsor. Future ticket sales was and always will be our ace in the hole, but 2/3 in the CCC will put paid to that reg price matching and supporter negativity. We don't own the land. Not sure what the value of a half empty stadium is. We still owe MA/or ANother 110m. Link to comment Share on other sites More sharing options...
Guest alex Posted July 27, 2009 Share Posted July 27, 2009 (edited) Do the club own any land? The old training ground at Benwell belonged to the club I think. Does the club even own the academy? (Have a feeling it's another long-term lease. Makes the other stuff seem relatively worthless. A long lease has value in itself. Most commercial property is leasehold. It's not the same as warehouse though. I'd guess the land at Darsley Park etc. has to be used for sport so it's not like you can flog it to Tesco. Edited July 27, 2009 by alex Link to comment Share on other sites More sharing options...
johnthebrief 0 Posted July 27, 2009 Share Posted July 27, 2009 Do the club own any land? The old training ground at Benwell belonged to the club I think. Does the club even own the academy? (Have a feeling it's another long-term lease. Makes the other stuff seem relatively worthless. A long lease has value in itself. Most commercial property is leasehold. It's not the same as warehouse though. I'd guess the land at Darsley Park etc. has to be used for sport so it's not like you can flog it to Tesco. Land always has value. It's the only commodity that they don't make any more Link to comment Share on other sites More sharing options...
Barney 0 Posted July 27, 2009 Share Posted July 27, 2009 I think the city own the land that the ground is on. Link to comment Share on other sites More sharing options...
Guest alex Posted July 27, 2009 Share Posted July 27, 2009 Do the club own any land? The old training ground at Benwell belonged to the club I think. Does the club even own the academy? (Have a feeling it's another long-term lease. Makes the other stuff seem relatively worthless. A long lease has value in itself. Most commercial property is leasehold. It's not the same as warehouse though. I'd guess the land at Darsley Park etc. has to be used for sport so it's not like you can flog it to Tesco. Land always has value. It's the only commodity that they don't make any more I'm not saying it has zero value. How much though? Not a lot if you're talking about a leased bit of grass that can only be used for sports facilities. I'd question the value of the other stuff you brought up to. Not saying the club is worth nothing but I'm not convinced it's worth a lot either. Not at present. Link to comment Share on other sites More sharing options...
trophyshy 7058 Posted July 27, 2009 Author Share Posted July 27, 2009 arrgh - dont make me go over there ! my eyes ! my eyes ! Link to comment Share on other sites More sharing options...
Park Life 71 Posted July 27, 2009 Share Posted July 27, 2009 What I really want to know is whether admin will nullify the player contracts??? Link to comment Share on other sites More sharing options...
snakehips 0 Posted July 27, 2009 Share Posted July 27, 2009 (edited) arrgh - dont make me go over there ! my eyes ! my eyes ! I opened N-O yesterday and my Kasperky politely informed me I had gained a trojan. Which was nice EDIT. Get the new anti virus software: Kaspinky and Kasperky Dullard. Edited July 27, 2009 by snakehips Link to comment Share on other sites More sharing options...
Park Life 71 Posted July 27, 2009 Share Posted July 27, 2009 I'd say the true cost of getting hold of NUFC under the Ashley package is 300m. Link to comment Share on other sites More sharing options...
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