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Toon administration fears resurface.

Posted on September 24th, 2009 | 35 Comments |

Happier times
Happier times
Some news agencies are reporting that Kevin Keegan’s payout could force Newcastle into administration (see here for example).

What they are saying is that ‘some at the club‘ (who?) fear that a potential £9m payout to Keegan will break the club and send it into administration. They go on to point out that we will be penalised 10 points as a result.

I must admit I find it hard to believe that £9m would send the club into administration given that we’ve saved £35m/year on wages and sold players to the tune of £22m in the last few months. I know we’re struggling and that £9m is no insignificant amount when taken in the context of things like our working overdraft with Barclays but it still seems unlikely to me.

Llambias has previously denied that administration is even a remote possibility and … hang on, virtually everything he says turns out to be untrue. Ah, so much for that line of thinking!

Ashley is the club’s main creditor, so the only benefit to him of putting the club into administration would be to offset a tax loss of £250m or so against any profits he makes from his other businesses. I have no idea how that works out for him in absolute financials.

I don’t really know enough about this sort of stuff to assess whether it’s in Ashley’s interests to put the club into administration, so I’m putting it down as alarmist nonsense simply because it makes me feel better to do that.

NUFCBlog Author: Hugh de Payen I'm a baby-boomer of the punk rock persuasion, currently exiled in Somerset for crimes committed in a previous life where locals keep trying to poison me with something called 'scrumpy'. Hates sprouts, coat-hangers, Cilla Black, ornaments, Steven Seagull movies and 50 Cent (he's not worth 10). Hugh de Payen has written 634 articles on this blog.

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35 Responses

  1. Hugh, from a totally unqualified viewpoint, I have to agree and I am looking at this as scaremongering of the highest order. (Fingers crossed).

  2. This will be (don’t laugh) Ashley’s PR guru dropping poison into the ears of certain media outlets.

    I’d be rather suprised if this did happen considering were being told the sale of the club is imminent.

    I wonder if the purchase prce will reflect the outcome of the tribunal.

    That would make sense I guess from Moats point of view.

  3. Not sure about this one Hugh. Who in Oz has an insider when we here sweet FA here. Wasn’t any good at business studies myself but i doubt it would be better for him if the club went into adminastration.
    If we did i could buy the club for 1p. LOL

  5. If I recall what I’ve previously read on clubs or business in general going into administration, they have to prove that this is the only option left open to them. Seeing as we have Mr. Mort queuing up to buy us, I can’t see administration happening. I often read, on blogs, that some supporters think that the media often make up stories to get the NUFC supporters in a tizz. Could this be one of them? Ashley hasn’t done anything bad for a while, so the ire towards him is fairly docile at the moment. So what better way to stir up the proles* than putting out a story that that nasty Mike Ashley will finall destroy the club by putting it into administration.

    *I include myself here, so don’t get all haughty about it.

  6. Can’t see it myself.

    Would surely have happened before now.

    It’s just from some obscure news sources isn’t it? Probably just regurgitated from ages ago.

  7. The NUFC waters are clearly a bit too calm for some media outlets – so a bit of stirring to agitate the locals me thinks – or as Stuart says, just as likely – a bit of unsubtle PR from NUFC at work here!

  8. Ashley’s PR monkeys are throwing bananas at Keegan!! Good Lord!

    The man has all the class of Jordan on a night out in Ibiza with a gang of road menders!!

  9. A very vague claim, doubt if there`s much truth to it, else it would be splashed all over the tabloids.
    As far as Moat becoming the new owner, believe the chances are slim, which matches his wallet.
    Seems the club is in a form of limbo at present, Ashley wants out (took a bath financially)but cant find a buyer (there`s a recession on)
    There are those like Moat, a day late and a dollar short, attempting to take control with someone else`s money, the other flim flammers like the “Profitable” crew, but no real moneyed prospects.
    Has the PL lost it`s allure for foreign buyers, or is it a matter of location, London clubs being more attractive.
    Yes there`s an argument for the Manchesters and Liverpool,but if you think Ashley has lost his ass, just look at the Glazer and Liverpool guys, who have to renegotiate their enormous debt seemingly on an annual basis.
    It`s a treadmill that can not be sustained where spending
    matches or exceeds income, not to mention the huge amount of money spent by Real Madrid, during the summer,
    Where will it all end and more to the point what will become of the Toon ?
    Will we become another yo-yo team without enough funds to compete with the top clubs or will we find a wealthy buyer and return to the upper level of the PL.
    Anyone out there with a workable crystal ball.

  10. Stuart79 says:
    September 24, 2009 at 12:34 pm

    “This will be (don’t laugh) Ashley’s PR guru dropping poison into the ears of certain media outlets.”

    That would be lousy PR Stuart, so I doubt it very much indeed.

    Ashley couldn’t put the club into Administration on a whim, it would also be a matter for a Licensed Insolvency Practitioner and the courts too. Anyway, even if he suceeded, he would lose all control of his business for a long period (it would pass into the hands of an appointed Administrator) and that would be just plain stupid from his point of view.

    Basically, it’s just more codswallop to dupe the uninformed.

  11. workyticket says:
    September 24, 2009 at 4:30 pm

    That would be lousy PR Stuart, so I doubt it very much indeed.

    This is Ashley were talking about – So what’s ya point?

    He deals in lousy PR Worky.

  13. Stuart79 says:
    September 24, 2009 at 4:48 pm

    “He deals in lousy PR Worky.”

    I do take your point there, Stuart. However, I would contend that it wasn’t so much “lousy” PR as it was NO PR at all. It’s easy to confuse the two, but there is a subtle difference. :-)

  15. Great minds think alike, Chuck! :-)

    Stuart, could you really imagine anyone, even Ashley, saying that their business was going into administration as a PR move? Really?

  16. PR’s probably the wrong phrase.

    But I do believe that Ashley’s people may well be behind this, trying to either put pressure on KK or let the fans know what KK’s actions may mean to the club.

    If it isn’t complete rubbish it has come from the club so Ashley will know it’s been released.

    If it meant the club getting sold and we could move on I would be happy to see the club end up on the winning side, providing they did nothing wrong that is.

    The club desperately needs some short/medium/long term direction and we won’t get that until the ownership is resolved and I believe this KK debacle could be the last obsticle to the sale happening.

  17. Stuart, I can see why you might think that but I’m not convinced.

    Ashley does, I think, know by now that if he put (or threatened to put) the club into administration it would just generate more hate towards him and it wouldn’t turn many KK supporters around.

    I suspect this whole administration stuff is complete rubbish, although I do think the Moat deal might be waiting to find out how the KK settlement pans out before going ahead.

  18. I just realised when writing that last comment that I’ve subconsciously accepted that the Moat deal will happen and will do so reasonably soon.

    Given that I’ve generally been quite cautious of alleged deals and that we’ve had numerous false dawns, I wonder why I’m suddenly start to think it will happen this time. In reality it could still be a non-starter for all I know.

  19. I agree with Hugh.

    The new owner, be it Moat or anyone else, has been delaying so they can find out exactly what, if any, compensation is due to KK.

    Although I remain sceptical about the deal being as close as we are currently hearing, it does make sound business sense for any new owner not to make their binding offer when a legal matter of such high profile and possible financial consequence is still ongoing.

    I have always believed that if Ashley had indeed chosen a party to sell to, he could have agreed the sale and agreed to pay any compensation due at the end of the case. That might be simplistic solution, and I’m no lawyer so it might not even be legal, but since it didn’t and we heard of no such offers in the various rumour mills, I have to assume that either Ashley or the propective owners were not prepared to take the risk.

    Assuming the case is resolved on Friday, I expect we will hear Ashleys decision regarding the club very soon but I don’t think we should hold our breath for the new owner riding in on a white stallion swinging bags of cash. Ashleys financial actions regarding the club over the last few months have demonstrated to any new owner that you don’t have to spend millions on the club if you have enough courage, or a thick enough skin, to face the supporters.

    Recovery will be slow, and the first steps must be taken on the pitch. If we are still in the top 6 come January, then we might see a willingness by our owner to put up some money to try and turn the possibility of an immediate return to the Premier league into a reality.

    However I wouldn’t be suprised if that owner was still Ashley.

  20. So let’s get this straight. If this is not just another ham fisted attempt by Ashley/Lambias to have a pop at Keegan, then it should read as follows:

    “If Mike Ashley is found guilty of having illegaly forced an employee out of a job then Ashley’s improper actions will cause Newcastle to go into administraton. If he is not found to have acted illegaly nothing will happen.”

    I own a company, but if my improper action caused a former employee to sue, and therefore bankrupt the business, then most people would consider it my fault.

  21. Starkadder says:
    September 24, 2009 at 7:12 pm

    Ashleys financial actions regarding the club over the last few months have demonstrated to any new owner that you don’t have to spend millions on the club if you have enough courage, or a thick enough skin, to face the supporters.

    It also shows you get relegated if you don’t spend any money and therefore end up losing a fortune!

  22. Stuart79 says:
    September 24, 2009 at 7:52 pm

    It also shows you get relegated if you don’t spend any money and therefore end up losing a fortune!

    I was actually talking about his actions post relegation, but fair point well taken.

  23. Stuart79 says:
    September 24, 2009 at 7:52 pm

    “It also shows you get relegated if you don’t spend any money and therefore end up losing a fortune!”

    It had nothing to do with money, Stuart. Unless you think that Newcastle have to spend at least ten times as much as teams like Hull or Stoke just to stay up? If that was the case then we certainly have problems in other directions.

    It had everything to do with constant changes of management. That’s just basic and obvious if you know the first thing about leadership and team building.

  25. I think it’s fair to say that relegation was getting closer and closer every season since Robson left … (or was he constuctively dismissed? Hmmm)

    Although the events of last season were obviously a major factor, we’ve been on a downward spiral for a while. It just all came to a head last season in a spectacular way.

    Personally, while I agree with Workyticket that a managerial roundabout is not the best way to have a successful season, at any club, I believe the blame lies fairly and squarely on the shoulders of each and every player who took the field last season. I can think of only a few moments when I genuinely felt that the team as a whole, and certainly some notable individuals were up for it and played for the cause.

    The display at Villa on the last day of the season sums up the entire season.

    For a bunch of highly paid professionals, they displayed very little pride and hardly any professional attitude.

    Those players should have been able to keep us up, if for no other reason than their own pride but all too often too many of them went missing.

    That’s why we got relegated!

    In my opinion.

  26. workyticket says:
    September 24, 2009 at 8:14 pm

    Stoke and Hull didn’t sell their best players and replace them with poorer ones – We did.

    I take your point about the management, we have had far too many under Ashley and that was a major factor. But you cannot deny with better players we woud have stayed up.

  27. Stuart79 says:
    September 24, 2009 at 8:44 pm

    “I take your point about the management, we have had far too many under Ashley and that was a major factor. But you cannot deny with better players we woud have stayed up.”

    And I take your point to a degree, but whether the players were “poorer” or not, the squad still should have been alot better than the two teams I mentioned.

    On the other point, where certain players may not have given their absolute all, I’m not going for it. When a team doesn’t have consistent leadership, it is more uncoordinated and less motivated because the team don’t know what they are doing. They’re just settling in to one approach, then they have to change it. That’s the same in any kind of team, football or otherwise.

  28. To be honest I don’t think there’s one particular thing that caused us to be relegated, although I’d agree with Worky that constant management changes is probably one of the most significant things.

    Sure, the players underperformed and perhaps individually they could have done better but I think that – regardless of comments to the tune of “they’re professionals and should perform regardless” – they are bound to be affected by the constant management changes and political turmoil in the boardroom.

    5 management changes in a season is just ludicrous (Keegan – Hughton – Kinnear – Hughton again – Shearer) and I would suggest that if we’d kept the same manager all season – and within reason it doesn’t matter which manager that is – we would have avoided relegation. I think the squad was good enough to do that at least.

  29. Hugh,

    5 managers is just a joke! Even for us.

    If you look at other teams down there with us like Spurs and Man City they spent money in January and we didn’t. I think if we’d have adopted that approach we would have stayed up also.

    Ashley had decided before January he wasn’t going to invest anymore money in the club IMO.

  30. Stuart79 says:
    September 24, 2009 at 9:19 pm

    “If you look at other teams down there with us like Spurs and Man City they spent money in January and we didn’t.”

    They didn’t have five changes of manager though, Stuart.

  32. aye and they didnt sell 1 of the best goal keepers in the prem neither stu
    i disagree batty given IS the best and imo has been for a long time hes got to be the 2nd best in prem history

  34. soz batty lol it should just be pointed out how great he is thats all i mean with a defence of carr babayaro bramble and boumsong all at their worst in their career he managed to keep a half decent defensive record