September 12, 2018 is the Sports Direct AGM. This is an opportunity for shareholders in the Company to ask the Board questions about their running of the business. This level of transparency exists because Sports Direct is a publicly traded company, their shares can be bought and sold on the Stock Market by anyone, and the stock price is effected by things like governance and profits. External factors like bad press and government investigations can also impact share price, and of course when someone has a lot of their wealth tied up in the wallpaper that is Sports Direct shares, their personal wealth can be impacted heavily by these factors too. It’s interesting to note that in the few weeks since the #IfRafaGoesWeGo movement started that the Sports Direct share price has dropped 15% or so.
Unfortunately Newcastle United is not a public company, rather it is a private limited company and there are no external shareholders - Mike Ashley (well St James’ Holdings) - owns Newcastle United Limited lock stock and barrel. That does not mean that his ownership and governance of Newcastle United can go completely without scrutiny. The point of a limited company is to separate it from the owner and director, to create a separate entity to the owner and directors, and protect them in case the limited company fails. The owners and the directors are exposed to liabilities in a limited way. In exchange for this protection there are a whole host of laws and regulations that the company and directors (who are generally, but not always, the owners) must adhere to. There are documents, papers and accounts that must be filed annually and these are published by Companies House (which also is one of the departments of HM Government which regulates Companies).
In the case of Newcastle United Limited, there is currently only one Company Director, Lee Charnley. We all know that Mr Charnley has some control over the running of Newcastle United, we’ve also heard the names Justin Barnes and Keith Bishop bandied about. We all know that while many day to day decisions about the running of Newcastle United are taken by Lee Charnley, the ultimate Boss is Mike Ashley. He can keep Newcastle United at arm’s length as much as he wants, but the facts are the facts: St James’ Holdings is listed as a Person with Significant Control of Newcastle United Limited and a certain Michael James Wallace Ashley is listed the sole Director (and Person with Significant Control) of St James’ Holdings Ltd as well as the sole Director and shareholder of MASH Holdings Ltd.
Questions to consider:
1. Is Mike Ashley (as the ultimate shareholder and director) in breach of Company Law by running Newcastle United Ltd for Sports Direct’s and his own benefit rather than for the benefit of NUFC?
2. How was it in NUFC’s interest for Newcastle United Ltd to sell the Gallowgate land to MASH Holdings Ltd, thus preventing its own physical expansion?
3. Is the free advertising of Sports Direct at St James’ Park declared as a benefit in kind? If so what is the value? If not, what does HMRC have to say about the arrangement?
3. What impact does Sports Direct’s free advertising at St James’ Park have on Newcastle United Ltd’s bottom line?
4. Given what we know about the relationship between Newcastle United Ltd and Sports Direct PLC, what benefits does Newcastle United get from the arrangements?
5. How does the bad publicity around Mike Ashley’s ownership of Newcastle United Ltd impact on Sports Direct (and vice versa)?
6. Considering that Keith Bishop Associates Ltd is 51% owned by Sports Direct (which is majority owned by Mike Ashley), and is also paid by Newcastle United Ltd, could some of the negative stories about Newcastle United being spun by people connected to either SD or KBA be deemed to be against the best interests of Newcastle United - while KBA PR is simultaneously being paid by Newcastle United Ltd? Is this conflict of interest acceptable?
Further question:
The Sports Direct AGM would be an ideal time for its Chairman Keith Hellawell to clarify the financial benefits that Sports Direct gain from their major shareholder Michael James Wallace Ashley's ownership of Newcastle United Ltd and why his company pays nothing to Newcastle United Ltd in exchange for these benefits. Over you you Mr Hellawell.
In the case of Newcastle United Limited, there is currently only one Company Director, Lee Charnley. We all know that Mr Charnley has some control over the running of Newcastle United, we’ve also heard the names Justin Barnes and Keith Bishop bandied about. We all know that while many day to day decisions about the running of Newcastle United are taken by Lee Charnley, the ultimate Boss is Mike Ashley. He can keep Newcastle United at arm’s length as much as he wants, but the facts are the facts: St James’ Holdings is listed as a Person with Significant Control of Newcastle United Limited and a certain Michael James Wallace Ashley is listed the sole Director (and Person with Significant Control) of St James’ Holdings Ltd as well as the sole Director and shareholder of MASH Holdings Ltd.
Questions to consider:
1. Is Mike Ashley (as the ultimate shareholder and director) in breach of Company Law by running Newcastle United Ltd for Sports Direct’s and his own benefit rather than for the benefit of NUFC?
2. How was it in NUFC’s interest for Newcastle United Ltd to sell the Gallowgate land to MASH Holdings Ltd, thus preventing its own physical expansion?
3. Is the free advertising of Sports Direct at St James’ Park declared as a benefit in kind? If so what is the value? If not, what does HMRC have to say about the arrangement?
3. What impact does Sports Direct’s free advertising at St James’ Park have on Newcastle United Ltd’s bottom line?
4. Given what we know about the relationship between Newcastle United Ltd and Sports Direct PLC, what benefits does Newcastle United get from the arrangements?
5. How does the bad publicity around Mike Ashley’s ownership of Newcastle United Ltd impact on Sports Direct (and vice versa)?
6. Considering that Keith Bishop Associates Ltd is 51% owned by Sports Direct (which is majority owned by Mike Ashley), and is also paid by Newcastle United Ltd, could some of the negative stories about Newcastle United being spun by people connected to either SD or KBA be deemed to be against the best interests of Newcastle United - while KBA PR is simultaneously being paid by Newcastle United Ltd? Is this conflict of interest acceptable?
Further question:
The Sports Direct AGM would be an ideal time for its Chairman Keith Hellawell to clarify the financial benefits that Sports Direct gain from their major shareholder Michael James Wallace Ashley's ownership of Newcastle United Ltd and why his company pays nothing to Newcastle United Ltd in exchange for these benefits. Over you you Mr Hellawell.
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