macbeth

We've 6 years in the Family enclosure. Lovely facility, and fantastis prices !! If you are regularly taking kids it has to be there. Also fairly easy to pass on for the odd games you can't make. As for age. Ben struggled to last a whole game up to about 12/13. Up to then a bag of long-lasting sweets from the pick n mix was the only way to keep him distracted. We had a new dad/kid last season, the kid was 6 and just couldn't last for 45 minutes. Used drive his dad, and us mad. It probably just depends on the kid too.

There are many of us who see a manager doing his job okay, then him fallign away after a few years, when we finid he hasn't the skills to kepe it going. Some of the managers even see this. Strachan has said he believes a good manger has a lifetime of about 3 or 4 years at a club, a great one can reinvent his side, but these are rare men. We've seen this over the years with even our best pair eventually running out of steam. It is strange (to me ) that we all seem to accept that this is normal, or just the way it is, yet some of us can justify keeping the managers boss in place for ten years while the club has bounced along having 5 bottom half finishing positions, and losing £60m. Doesn't seem to stack up to me.

For the last few years the board has been mad eup of ouglas HAll and his sister Alison, Freddie Shepherd and his brother Bruce, and the independent tax accountat Tim Revill who is based in Gibraltar. I feel it is a pointleses exercie to try and attribute blame across any particualr individual as the board as a whole runs the club. The popel to blamd are two members of the Hall family an dtwo memebers of the Shepherd family. To exclude anyone, in particular, or to blame any indidvidual in particular is silly. Collectively they are all equally talented.

but you've enticed mte into doing it ... Well, it certainly isn't good. Those figures suggest a cash outflow of £16m in 12 months, presumably including a net transfer spend of £10m. Obviously this isn't sustainable, but the underlying loss would be £6m. In the short term, the plc will simply borrow more money to cover itself until the increased merit payment kicks in (the banks will certainly lend the money because they know the merit payment is coming, but it's possible that they might have conditions, such as a restriction on transfers). What would be interesting to see is a look at the year-on-year cash drain. Aggregate the cash balance from each annual report with the nebt debt position and see how it changes from year to year. To make it more accurate, you can also incorporate the trade creditors and trade debtors attributable to transfer fees (the plc does break these figures out in the interims but I think they do in the annual reports). Of course, I'm not going to do any of this...

Thank you that was excellent. I'm only trying to understand what is going on, and you have helped hugely. I've never been able to quite get my head arond cash. A few years ago the club was always cash rich, particualrly when the full year results were announced in July. They ouhad all the season ticket dosh in the bank and invariably hadn't spent any on players yet. This time last yearr was the first time they ever had an overdraft (nearly £18m), it is reduced to 5.5m when the season ticket money came in last summer, but is back to ~21m now. There is a good chance that the season ticket money will not cover the overdraft this time. The £15m from Sky won't all be had until the summer of 2008, as that is when the merit (sic) amoutn is calulated. The net cash for the last 6 months was -8.9m. Last year the total figure was +7m, this year it would look to be nil at best. Is this a problem?

The depreciation for the ground, and other fixed assets is fairly steady at £3m per year. The club had the option to either have a one off hit of £52m or to spread the cost over the useful life of the ground. The depreciation is the way this is done. (Sorry if I am telling my granny how to suck eggs !) The player amortisation costs are treated the same. Owen costs £16m (say) and is on a 4 year contract, then the cost isn't taken as a £16m hit in 2005 it is spread out as a £4m hit each year. As he could leave on a free after the end of his contract then this is the 'worst case' the club has to always have in mind. This last 6 months the amortisation costs were £7.5m. This cannot be ignored, the onkly other way to do it is to have the one-off hit which would mean going back and taking great chunks out at the time of the transfers rather than spreading the load. For each player bought the club can see how much book value there is left. So this led to the famous Sir Bobby quote about making a profit on Carl Cort when he bought him for ~£7m and sold him three and a half years later for ~£2m. On the books Cort had "amortised" by 3.5 of his 4 years contract. On the books he was down as being worth ~£1m to the club. To sell him for £2m was therefore profitable. Or so the story went The loss/profit on player registrations is the difference between what is left of the player worth as described for Cort, against what the club get for the player. So in Cort's instance the profit was ~£1m. When we sold Boumsong for £3.3m he was on the book as being worth ~£6.3m, so we lost money. For Faye we made money, somehow. This bit of accoutning is necessary as the club does it's amortisation. It seems ridiculously complicated but it evens things out, and means that the club cannot be sen to boost its profits by just selling a player. What you have done is what the club (all clubs) do. They give their revenue, their operating costs (putting on games, paying wages etc) and say this is operating profit. They separate out player transfer costs, and separate out financial costs, so loan payments. I feel the club has to have players so ignoring the costs of them is a bit of a cheat. It would be like Stagecoach not counting the costs of buying buses. The finance costs would be like Stagecoach borrowing mooney to buy the buses, and looking to ignore those costs too. I'm uncomfortable that the club isolate these player and loan costs but find it okay to include the exceptional insurance costs. For the 2007 year as a whole, I estimate that the income will be £82.9m (plus or minus £500k per place above or below 11th), with costs being £83.7m (if the insurance is £3.3m). The player costs will be £17.9m, the loans will be £6.4m. Totals in £82.9m, total outs £108m. Overall loss will be ~£25m. Compared with £12m last year.

In 2006 the Shepherd apologists blamed Souness for all the problems, like the £12m loss made that year. I guess the £25m loss to be made this year will be Roeder's fault ?

http://www.spiritofsport.co.uk/images_versions/1305.jpg

http://www.infactah.com/Robbie2.jpg

and the one here is funny http://www.worldpressphoto.org/index.php?option=com_photogallery&task=view&id=160&Itemid=115&bandwidth=high

Always liked http://www.mightyleeds.co.uk/images/6608bremmackay.jpg

Not this time !!! This time I've gone out of my way to make them look good. I have searched and searched through their accounts and listed everything they have said that can be in anyway construed as positive. Incluudes "The sale of Faye raised £2m and of Boumsong £3.3m." "13th place in the FA Premier League at the end of December 2006, having lost over 250 senior player appearances". "The return of Kieron Dyer to the first team has been akin to a new signing" "There is no dividend" "The club have received £3.3m in compensation for the injury to Michael Owen. The club have used this amount to reduce their costs." "The increase in running costs came from having to put on more games." "Average home league crowd 2006 = 52,115. Average league crowd 2007 = 49,725" "There are 8 league games left for the 2007 season. With extra cup games, and some bigger games the total for the season should be about £31.9m. This is up from the £30.9m last season. " I make some guestimates for the whole financial year "The revenue for the full 2006-07 season would look to be ~£82.9m" - this is up from the previous year "The operating costs for the year would look to be ~£83.7m" Other costs look to be £24m. Expected loss for the full year is £25m To balance out all these positive comments, and guestimates, I have also included the negative ones they mention. So wages up, assets of £7m down from £56m in 1998. I am not sure what you would like me to do? For lots of people who aren't in the know like you clearly are there is a concern that the club could make losses of £37m in two years, while the team descends down the table. As you say they seem to know there is something wrong, but the detail is hidden in accounting speak. I try and explain it. To help I try and put things i graphs as people have a feel for that. I'm not doing this for you, just for those others that you feel may not understand, and may still be hoping for the spend of previous years. The 07 figures are for 6 months. http://www.nufc-finances.org.uk/200715.gif http://www.nufc-finances.org.uk/200716.gif http://www.nufc-finances.org.uk/200717.gif http://www.nufc-finances.org.uk/200718.gif As I always say, to you and to anyone else, if there is an error in these numbers or graphs please let me know and I will correct it.

Okay so if Owen gets fit will the wages drop again ? Will you expect the club to sell Martins (or Owen) or will our wage bill still include both of them for next season? The wages for the first half of the season were £27m, when you took off the £3m insurance money for Owen. What do you expect the wages to be for the second half of the season ? I think they'll be reported as £30m. The total for the year coming to £57m. This is the same as the last year to July 2006. (The 2006 figure was £52.2m for 11 months, the 2005 figure was £50.2m for 12 months). The club, I guess, will say the wages are unchanged. The underlying wages figure is over £60m which would mean a £3m, or 5% rise on the 2006 figure. The club says the ratio of wages to turnover target is 50%. By the end of the year they will report either 57/83 = 68% or 60/84 = 72% as the current position. An extra £15m next season from Sky would take the ratio down to 61%.

Thanks, thsi was exactly what I was after. I've changed the wording so that it says that the underlying wage costs are up 12%, and that the overall underlying costs are £45m rather than £42m Last year (and the year before) the club isolated the exceptional costs that they had incured due to replacing the manager. They viewed this as one-off costs that they wouldn't have in a normal year. They then quoted the wages ratio without these one-off costs, as it reduced it by ~4%. That it was the 4th exceptional year in 8 was exceptional. If the one-off manager costs are ignored, or included, the one-off insurance costs should be ignored or included. In trying to caluclate the full year results I doubled the underlying £30m and took off £3.3m. The comment about including one-off cup-winning monies, the answer is yes. The club has three parts to its business matchday, commercial and media (TV). If they had a good cup run and got more matchday revenue and more TV revenue that would be part of their normal business. They have never put "money fomr players injured on international duty" down as one of their normal expected sources of revenue, so it shouldn't be counted as normal.

I've managed to get a new page up which tries to explain the financial results issued by the club last week. Please give this a read, and make comment. I'm struggling to try and stay calm and analytical, and need feedback ! Details at http://www.nufc-finances.org.uk/20071.htm

I suspect the people living around Leazes Terrace might not be so keen on that...... they'll be inside the ground

There's not £20m to spend, there's not £10m to spend. There is nothing to spend. The club are likely to lose over £20m this season. This year wages bill is ~£60m, previous year's transfers to be paid for this year comes to ~£18m, interest payments come to ~£6m, cost of putting on games and gernal running if the club comes to ~£25m total outs comes to about £108m. Meanwhile the the income is £83m. Where in all this do we expect to raise money for players? Only way is to sell some of our unwanted players, and to use the money form unwanted players to buy better players for less money. Back up on the numbers at http://www.nufc-finances.org.uk/20071.htm

THis is the Owen who has managed 30 league start in the last three seasons ?

Surprisingly I don't think they have actually thought it through. Presumably because they always sell out the season tickets, and always will.

Because in 1998 a vast number of us collectively invested £52m in our football team. In the 9 years since then that money has be has been either pissed away by incompetence in the board, or just plain given away by a board that sees their own pension funds as more important than the future of the club. I hate to see the incompetent running of the club. That they can get to the point where the expectation is a £25m loss this financial year is unbelievable. That they can give away £35m of the club's money, when clearly the club couldn't afford it, is just wrong. Nobody has bought shares in NUFC even when the dividends had been so ridiculously high. If this is the case then why the hell give them? You justification seems to be that the share price would collapse if there were no dividends. Which of the buyers of shares has been tempted by the dividend. As you said - NOBODY. So why bother? Well its cos Sheperd, and Hall, are essentially thieving bastards who are incompetent at runnign a business, but brilliant at asset-stripping. The asset-strippign may not be there on the surface, because there is a time delay. When somebody actually gets in and removes Hall and Shepherd, then they wil have to balance the books. They wil find the only way to get the £35m back is to sell off assets. New owner gets the blame, Shepherd looks liek a hero, he "always backed his managers" where as the new owners will have to try and cope with the debts that good old Shepherd racked up while giving away all the clubs money. NE5's pals McKeag and Westwood were incompetent, Shepherd and Hall have the same business acumen, but are evil, money-grabbers.

As they've now gone 3 reporting periods without divis, do you expect that Shepherd to sell up ? Why on earth would he hold on ? Why indeed? Why do you think? Has it anything to do with Fred's aim of buying all shares? Or is it because he doesn't need to sell for the prices offered so far? Conversely, why do you think the Halls want out so badly? Cos they have proven track record of demolishing companies? Cameron Hall collapsed once Sir John left it to Douglas and Alison to look after. Now thye have milked every available penny they can out of NUFC they also wish to get as much cash as possible while they can. You tell me what is in it for any shareholder to own shares that are falling in value and paying no dividend? The belief that the value of the business will be reflected int he share price. As the board improve the business the share proce will rise and then any shareholder can make their own decision on when to take their profit. Microsft first paid a dividend in 2003. Up till then they view shreholder return as being in the share price, and the retention of cash important to improve the business. Taking your profit by sellign your shares also means that the shareholder can decide when is the best time for him to get his return. With a dividend the company board is deciding when it is best for the shareholder, regardless of the tax implications. The share price is falling because the busines is not performing. The board (which is managing it so that it doesn't perform) also give away the cash in the business. This means that the business must be worse off. As the dividends continue the business will eventually reach the point where it is borrowing money to compensate for the cash it has given away. And that is where Hall & Shepherd have managed to get us to now.

http://en.wikipedia.org/wiki/Premier_League#Finances

As they've now gone 3 reporting periods without divis, do you expect that Shepherd to sell up ? Why on earth would he hold on ?

The top team next season will receive £50m, instead of £30.4m this season The bottom side will get minimum of £26.8m The exacts amounts depend on apperances. The total is calcualted from 50% standard, 25% from finishign posiiton, 25% from appearance money. 7th last year got us £26.5m, roughly £7m was from finishing 7th. This is on £500,000 per position above the bottom. If we finish 7th next season we would get roughly an extra £14m. This is on £1.5m per position. This season we are lookign at a loss of roughly £25m for the whole season. The new Sky money would reduce this to only a £11m loss. There are other TV monies coming on from overseas deals, but I cannot find the exact figures

The loss over the last 9.5 years has been £36m. The board have then given dividends of ~£31m and have bougth shares back for a further £4.5m. So roughly £35m paid to shareholders while making a £36m loss. (Rough figures) Graphs don't included the 9m loss annsounced yesterday... Before divis: http://www.nufc-finances.org.uk/profit2.gif After divis: http://www.nufc-finances.org.uk/profit5.gif