Ashley 'Balancing the books'

I cant understand where Sports Direct comes into the equation other than being where MA wealth was built on.

Its been well documented over the years that he gave a personal loan to St James Holdings Ltd. This presumably came with an agreed re-payment method. The loan did not come from Sports Direct.

What he has done is normal business practice, albeit may be not to the extent of £100m+.
But if it keeps you happy and you want to split hairs, you could say he is lending to himself, but so f***.
All above board.

Cant see why you're bothered anyway. Maybe you should concentrate on you own, and ask a question or two where Mr Squeaky Clean Short got his fortune from.

 

Suprised it took someone so long to come along suffering from the heat. Haha

 

First, the audited accounts are available on line. Taking 10 minutes to read them saves a lot of the more speculative comments on the board.

Newcastle United is owned by St James Holdings.

Mike Ashley has personally lent Newcastle £140 million, interest free. The amount went up by about £20 million in the Championship season. It has now, for the first time, come down.

The loan was payable on demand. It has now been restructured and is not payable on demand. That is simply because Ashley has chosen not to demand it.

With respect to the article, anyone who can write that Ashley caused the club to repay £11 million to prevent the club turning a profit is a financial illiterate. First, the club did post a £1.365 million profit. Second, the amount of that profit is, and always will be, unaffected by how much debt it chose to repay - - it would have shown the same profit if it had paid back £0, £11 million or £140 million.

What can we conclude from all of this ?

Ashley has loaned the club money and would like to be repaid some day.

 

Not by any means suffering from the heat mate, under an umbrella on 4th can of cider.

Cheers for the discussion, better than talking to the dog.

 

Fair dues, my initial thoughts

 

A company and its shareholders are, legally, two different people.

Shareholders loan money to their companies routinely. It is one of the most common types of financial transactions.

A loan to a company is just as much a loan as any other, whether you own some, all or none of its stock.

The concepts aren't that difficult but you do need ot get them straight before you can offer any really valid observation.

 

Haha.

cheers Fredd.

 

fair enough. Not trying to get to deep but I was only asking who owned NUFC. never heard of SJ holdings..

 

So, I take it the asking price for newcastle united has just been reduced by 11 million then? As the books say you broke even, then there's no value added to it. And with the price of the club taking into account Mikes debt, which he is taking payments on then your club is losing value every time he takes a payment. it's pointless for every reason other than that he's struggling for money personally.

 

I did say it was fairly simple

 

To the contrary, reducing the debt, as with any business makes the said business more self sufficient and attractive to any outside investment.

The concern is more of how he rationalises the repayment each year, if its an agreed amount, say £11m no matter what the profit is then fair enough.
But for arguments sake the profit was £50m and he took the full whack, then the clubs value would stagnate on paper, with only the playing assets being seen as potential monetary growth.

Cant see him being struggling for money himself, the way Sports Direct are going his personal fortune is only going to increase further.

 

Mike Ashley is asking for the amount he is in order that any potential buyer clears the debt to Ashley if and when the club is sold, before considering the actual asking price. I personally see no reason why he shouldn't seek to get back some of the outstanding debt while the going's good. If he takes 20m every year for the next 8 years, he'll have set the club up debt-free and ready either to bash on with him as owner or get sold as a debt-free moneymaking enterprise. By the way, I would say that the value of the club must depend more on the market than the profit it's making. Also the playing staff compared to when he bought has dramatically improved, at least on paper.

 

I see, Fair do's, wasn't wumming, just trying to understand, just seems a bit of a bizarre way to go about it but I'm by no way in the know on business. Interesting but confusing for me

 

Cheers fella. See my above post

 

TBH, when sitting in the garden in the sun, drinking cider, MA's madness becomes simple to understand.
The more you drink, the easier it is.

Now where's the next can.

 

Getting closer to being sold is all.

 

I can see why everyone's looking at it this way however if anyone tries to buy the club they have to buy out his loans, now as far as I'm concerned the less loans we have, the better business we are, the higher MA values the club, meaning that value either doesn't change or maybe goes up against every amount of loan paid back. money is just going into his pockets.
Ken Bates bought Chelsea for a pound due to all their debts, he wouldn't have payed a pound if they didn't have any

 

Doesn't really change anything.

A buyer is going to pay what he's willing to pay for the club - - £100M, £200M, etc.

That money will first go to the loans (i.e. to Ashley personally) and the remainder for the shares (i.e. to Ashley's 100% owned company).

A buyer who values the club at, say, £220M isn't going to pay any more or any less depending on how much is outstanding in debt: he will pay what he thinks its worth and Ashley's company will make a profit or a loss on the sale of the shares as a consequence.

 

Fair enough but I'd like to see some net transfer stats for before that period (Andy Carroll, etc.). Do i think Ashley would have spent that much if relegation wasn't looking probable? no.