Teasy

I think this was the problem. By 2007 the club had borrowed against every asset it had and there was nowhere else to go. Given the precarious financial position at that time I doubt any bank would have lent further funds unless there was security. I still can't work out how Shepherd thought he was going to get out of that mess, he didn't want to sell up like Hall did, so he must have thought he could carry on. Either he had a cunning plan or he was deluded about the financial status of the club. In 2007? Banks were still lending money hand over fist to anyone who could lie on an application form then weren't they? Regardless, what makes you think the club needed significant extra borrowing anyway? In 06-07 IIRC the club had around £10m more going out than coming in, which is around the same amount as was spent on transfers. In the 07-08 season the TV revenues increased and brought in £18m more revenue than in the previous year. In actual fact the total revenue increased by £12m (we weren't in Europe that season). If we'd had another £10m transfer budget, and maintained the same wage level (a number of high earners were removed from the wage bill in Summer 07 - Parker, Dyer, Emre, Luque, Carr, Babayaro, Solano) we'd have broken even or made a profit. The club had a large enough turnover to make it self-sustaining. We could afford to spend more than most other clubs in the league. We didn't need a billionaire to support us. The debt was £70m of which £45m was a fixed long term loan for the stadium expansion which easily paid for it's own interest repayments. That leaves £25m attributable to the running of the club over the previous 15 years. Look at the debt of other clubs from their 07-08 accounts. Only Blackburn and the newly promoted teams had a debt less than £25m. Only 7 had a debt less than £60m, and we had a far bigger turnover than those clubs. We were the 12th/13th richest club in the world, and we couldn't afford the repayments on a £70m loan? Give me a break. The only reason the debt has spiralled in the last couple of years is due to the increase in wages from £62m to £76m, and because of Ashley's pay up front for incoming transfers policy. Neither of which was necessary or inevitable. Did we go bankrupt in 2001 when the debt was £67m and turnover was £55m? No. Unmanageable debt? Financial disaster? Inevitable bankruptcy? Don't make me laugh. Smoke and mirrors covering for a monumental cock-up by MA of not doing the appropriate checks and his outpourings were his get out clause for spending almost F*** all on players. The world of top flight football runs on debt. It is not like we were struggling for turnover. By Jove! I believe we have a winner! Just more people who don't understand the situation we were in. I don't know where to begin with UV's post, it beggars belief.. Anyway it seems its always being said in these kind of threads that the debt itself wasn't the issue, the continued and in fact worsening losses each year were the problem, but it just never sinks in with some.

Our finances were completely out of control and no.

Nobody knows for definite, logic tells me no way can anyone be stupid enough to think they can get £200m for Newcastle United in our current situation. But logic doesn't seem to exist in Ashley's world. The fact that 4 groups are interested suggests the loan will be written off.

I'd be more interested in the Omani people then The Profitable Group, also apparently that South African billionaire is much closer to owning us then The Profitable Group.

I didn't disagree with the Premiership comment mate. Just saying that I don't see why Leeds would be a better option then us for a truley ambitious person.

Championship clubs certainly clubs don't, have any of them ever been taken over by a multi billionaire who actually invested his own money? There's plenty of clubs with massive potential in the league but they're all run by local businessman and so are the 3 teams that were promoted. Look at Leeds, you could buy the club and bankroll them to the premiership for less than it would cost to buy us and you would then have one of the biggest clubs in the country, but if you aren't in the premiership they aren't interested in doing some work to get there. Or someone could bankroll us and have an even bigger club.

Doesn't matter how he structures it, he'd still be selling the club for £200m and I don't believe for a minute that anyone would pay that.

My main worry is that Ashley might really be fucking stupid enough to want his loan paid back. In which case expect every bid to evaporate during due diligence.

Naa they need most of that for next years £50m interest payment.

Well I'd have to check to be totally sure but I'm pretty sure numerous papers have been unamimous in the idea that the loan would be written off. If SSN were right then no way will any of these takeovers go any further then due diligence, nobody in there right mind would pay £200m for Newcastle United in its current state.

I see your point, but I'm more nervous about what will happen this summer when we are 3-? weeks behind everyone else, needing to at least halve our wage bill and also build a competitive squad for the Championship (which is more competitive than most seem to think). I just want this over. Everyone else seems to have Saudi/Kuwaiti billionaires interested, I don't see why we can't dig one up. We've already managed to lose at least two multi-multi billionaires due to Ashley's idiocy (Man City owners and the bloke taking over Portsmouth both wanted us). So god knows how many other middle eastern billionaires looking to throw endless supplies of money at a club he's burnt bridges with..

He may be a figurehead, he maybe a big contributor to the consortium and with a potential 33% of ownership (his funds) looming you simply cannot say he's just another employee. He doesn't have that kind of money though does he? He was worth about £40m and as far as I remember he's since invested almost all of it in other projects. I suppose we should find out soon enough.

Lots of if's, but's and maybe's... The point is a lot of people dont want him anywhere near the club no matter what role he plays. Yeah but his point is just about nobody would be willing to give Shepherd another chance if it was back to the old days of him in full control. However having him as an employee who would be accountable for people above him is a very different scenario, one which I would certainly be happy enough with.

It was claimed earlier that this consortium approached him to be their figurehead in the takeover, which suggests none of the money involved is his.

According to all the papers Freddy is part of a different consortium who are way ahead of The Profitable Group in negotiations. Or was that just a "imagine how sick you'd feel if" scenario?

Not as excited as we'll be when Freddy's employers sack him amid fan buoycott threats due to Shearer resigning.

Like I've said before, if its a well funded business/consortium owning the club with Freddy only as an employee I'm all for it. The Omani one does sound apealing as well though.

Who's been relegated from the PL without debt then? Are you being thick? Don't we owe MA £100m? He's written it off. But, I'd rather still owe the 70m debt the club had 2 years ago and remain in the PL. Comprende? Who says he's written it off? Exactly, I've been harping on about this from day 1 - the debt is still there. I believe he is writing it off for any new owner. Firstly because the papers got his asking price right the last time (people thought it was going to be £250-£300, they said it was £400m which has now been shown to be correct) and this time they're telling us he's selling for £100m with the debt written off. And secondly because nobody on earth would even be interest right now if he was trying to sell the club for £200m.

In the football business model and especially with us as we are essentially a monopoly I really don't think debt would ever be an issue if we kept the club in the top 8 with the occasional European run. Ok, our club was valued (by my mate at Coutts ) at roughly 240m, that's turnover x 3, which is normal gearing for a business such as ours. This is essentially what Banks look at....With a turnover over of 100m ish a year we can service debt of 100m a year at a cost of 10m or so...This is not big money. But we couldn't service any debt effectively, we were paying debt with debt. We had a turnover of £100m but costs well over £100m every year (with each years costs increasing faster then the revenue was increasing) and that was before we got to paying the interest on our loans. That isn't sustainable unless you have a bloke there who will just keep loaning you money, like fatty big balls is doing at Fulham. Ashley has done it as well but obviously wasn't prepared to keep doing it forever and had a plan to make the club self sufficient. Which for a club like ours was actually possible without a completely bonkers wage bill. Problem is Ashley's plan was thought out and even worse executed by.. Ashley. By the way by being self sufficient I don't mean not having debt, I mean being in a position where you can actually afford the repayments on that debt. Debt is absolutely fine, the massive majority of companies have it and its often neccesary to expand your business.

Parky, as Madras says Fulham's debts are held completely by their owner as a interest free loan and obviously he's happy to continue to lose that money. Obviously Ashley wasn't happy to continue to subsidise the club with bigger and bigger loans every year. I still agree with the need to stabalise the club financially before moving forward and its obvious to me that was easily achievable. All that was required was to have one manager in control of the club all season with any money coming in from players being available to him for transfers. What we got was three managers and a couch in charge at different times in the season, transfer money being spent by a midget and some of the money which came in never getting spent.

That was a secondary reason, we were relegated primarily due to a series of insane managerial appointments.

Its just a pitty you still don't realise that the £70m debt wasn't the issue Parky. The problem was our continued and unmanagable losses, which were getting further and further out of control each year. Its just a shame that Ashley's moronic decision making, particularly managerial appointments, has taken away what was a great opportunity to stabilise our finances. With some of our more obsenely overpaid players due to leave we really could have gotten sorted financially and moved forwards had we stayed in the Premiership.

So there is still debt remaining and we'll not hear anything until it's all completed anyway. Happy days. £5m bank loan was the only outside debt in the last set of accounts. I don't believe that Ashley is expecting his loan to be paid by the way, nobody would even be interested if that was the case.

No. I don't want any of you on here having any say in how the club is run. Barca members don't have a direct say in how the club is run, they just elect the bloke to run it every couple of years. Would only be a good thing IMO.

I suppose a quick way of looking at it is that on a turnover (income) of £100 million the club is losing maybe £20 million a year in the Premiership. Lets say incoming revenue drops to £60 million in the Championship so Ashley needs to save £40 milion of costs to get back to where he was in the Prem and he needs to save about £60 million of costs to get to break even. You might be able to drop £30 million off the wage bill (if you are lucky) so he would still be well out of pocket. Hmm, still quite a lot then. Cheers. The club is a financial basket case imo and has been for a few years but, as it stands right now, it is onto a whole new level. Just waiting for Ashley to offer a free pair of trainers and a Sports Direct t shirt to anyone who sticks a bid in before midnight tbh. on the other hand £100mill for a club of this size with no creditors and potential (ie get the wage bill down and return to the prem) should attract some business. surely that it what business is about ? You are absolutely right that £100 million, with the Ashley debt written off, is not a bad deal for someone who knows what they are doing, has deep pockets and can take a longish view. But I did use the words "as it stands" and, as it stands, the club can expect income of £60 million next year and that's being optimistic. Costs in cash terms run at about £110 million a year. So far the only things that will reduce the current annual costs are Viduka, Owen and Cacapa walking and some lower paid staff being made redundant - lets say thats savings of £15 million. So, as it stands, the current cost base is about £95 million and no one, right now, is working on doing anything to reduce that further. Therefore, as it stands, the projected loss next year is about £35 million - and that will need funding with cash just to stand still. The more time that passes without someone getting to work on all this the more impossible it will be to do anything about it and the less attractive the prospect of buying the club becomes. And I have seen no evidence from Ashley that he is writing the loan off btw. Caulkin in the Times says he was prepared to (and maybe he has an inside track), but the statement on the club website says it's £100 million to buy the club, and if you buy the club for £100 million you still owe Ashley his money for the loan. At the moment we don't seem to be doing anything to sell the neccesary players. However you can bet the players agents are working hard to get deals sorted. The likes of Martins, Coloccini, Jonas are certain to go no matter how much time the likes of Ashley wastes. That saves us about £24m in wages and will bring in at least £20m in transfer fees. Also did you really expect the statement on the site to mention the money he's owed? At the end of the day nobody will buy the club for £200m, so he will have to right off that £100m.