Apologies if this has already been posted, if it has delete/ merge...
fairly decent article in the telegraph about the situation at newcastle:
http://www.telegraph.co.uk/sport/football/leagues/premierleague/newcastle/3111878/Newcastle-United-may-look-a-circus-act-but-winning-buyer-could-have-last-laugh-Football.html
Yet despite the universal derision being heaped at Newcastle's door, an undeniable fact is emerging from the smoke generated by Mike Ashley's fire sale: the club remain an attractive investment attracting genuine interest.
Since Ashley announced his intention to sell the club on Sept 14 several overseas investors have expressed serious interest in becoming the club's third owners in 16 months. (The anonymous Nigerian consortium fronted by Chris Nathaniel, an agent who handles media rights for Rio Ferdinand and John Terry among others, is not among them despite their claim, refuted by sources with knowledge of the negotiations, to have lodged a £300 million bid last week.)
Yesterday the seven genuine bidders received a sales prospectus detailing the club's financial position from Seymour Pierce, the investment bankers engaged to handle the sale, having signed confidentiality agreements.
Inside Sport understands that the document sets out details of a club who, thanks to Ashley's investment, are far healthier than the debt-laden unprofitable hulk he walked into last summer.
The audit reveals Newcastle are debt-free apart from an overdraft that fluctuates in line with the receipt of season-ticket income. They also own their own stadium and training facilities as well as significant commercial property holdings in the city.
The prospectus values the squad at about £100 million, and crucially for the medium term, despite the frantic transfer activity of the last two seasons, the club are owed more in transfer fees than they are scheduled to pay out. The new owners will also have access to the £50 million overdraft facility that is not subject to a change-of-control clause.
Add the fact that Ashley is, in the apposite euphemism employed by one City analyst, a "distressed seller", and there is every chance that the eventual buyer may consider they have a bargain.
Having distributed their assessment of the club's real financial position, Seymour Pierce will now await valuations from potential buyers in what is effectively a sealed-bid auction.
Contrary to reports circulating, no target figure has been set.
Having spent £134 million buying the club and another £110 million in clearing debts, he will be hoping for a figure north of £250 million, and his advisers are confident that will be achieved. That said, Ashley is unlikely to achieve anything like the £400 million-plus price-tag mooted when the 'For Sale' signs went up.
The club are a proven source of revenue, generating close to £90 million in the year to June 2007 and returning a modest profit of £3.5 million, a figure that is said to have increased marginally in the first full year under Ashley's control.
That said, a reduction in the huge wage bill, which accounted for close to 70 per cent of income last year, will be a priority for any new owner.
Should Ashley walk away with any sort of profit from his disastrous tenure he will doubtless be pilloried, but he will not be the first millionaire to enrich himself courtesy of Newcastle United.
Sir John, Douglas and Cameron Hall, who used the club to drive their vision of the "Geordie Nation", earned more than £36 million from sales of shares, salaries and dividends during their time at the club, and Sir John received £55 million from Ashley for his 41 per cent share last year.
Former chairman Freddy Shepherd and the company run by his son, Douglas Shepherd Offshore, meanwhile, were paid more than £10 million in wages, share sales and dividends during their time at the club, and accepted £37 million of Ashley's fortune for their 28 per cent when they handed over the keys to St James' Park.
As these figures demonstrate, the problem at Newcastle has never been generating income, but ensuring that it gets ploughed back into the club.
Whatever the outcome of the sale, in the short term they are unlikely to stop singing at the Stadium of Light. The controlling Drumaville Consortium paid just £10 million for the club in 2006 and guaranteeing £40 million of debt. Aided by Ellis Short's emergence as the leading shareholder, a further £30 million has been invested since then. For that they got a 49,000-seat stadium, a 200-acre training ground, one of the most promising managers in Roy Keane and, in Niall Quinn, one of the sanest chairmen. Now that is a bargain.
* £100m: The prospectus’ value of the Newcastle squad
£90m: The amount of revenue generated last year
£3.5m: Newcastle returned this modest profit in the year to June 2007
