Happy Face

Correct me if I'm wrong, but given that the operating profit is £28m lower than we'd expect based on last years costs the difference isn't something that could have been built on player valuations, amortisation etc. Ebitda would only account for wages and other tangible outgoings, no?

The hope is that we've seen hard cash come in and we've written it off as a profit with "paper" costs and we have a much healthier bank balance than we've ever had before. If we don't have a good wedge in the bank then I'll totally dumbfounded by the black hole it's disappeared into.

Clearly I was miles off in predicting the amount of profit, the amount of debt that would be paid off, and the amount that would mean we could spend next summer as a result. No problem admitting it. That said, I don't think anyone thought for a second we'd see what we have for the first 2. My fundamental observation still stands though, about the club spending what it earns, or what it reports as earnings. Almost to the nearest 100k, I was spot on because the 13/14 profit of £18.7m went on an £18.6m net spend in 14/15. This seems to remain a priority above paying off the immediate loan as we assumed they would, let alone the long term loan you did.

Said before. I now think we're at £5m as the kitty for this summer. Basically Our operating Profit. It'll actually be lower because we're going to finish lower in the league so broadcasting income will be down too. £18.7m profits reported in 13/14 and I make it an 18.6m net spend in 14/15 up to and including the sale of Santon. This isn't a dig but weren't you recently saying that you expected us to spend plenty in the summer and have plenty stored away for January? What's changed to make the budget £5m? Simply down to lower profits than expected (which seems to be a by-product of this mystery hike in costs)? http://www.newcastle-online.org/nufcforum/index.php/topic,96459.msg5476555.html#msg5476555 We always had to change approach this year. I'm always an optimist, so thought the change of approach would be better manager, better class of player, more depth. Keep spending what we could afford to grow. Turns out, the change in approach is to cook the books to within an inch of legality in order to report as little profit as is possible while continuing to buy only the cheapest players that have the smallest chance of dropping in value any further.

Said before. I now think we're at £5m as the kitty for this summer. Basically Our operating Profit. It'll actually be lower because we're going to finish lower in the league so broadcasting income will be down too. £18.7m profits reported in 13/14 and I make it an 18.6m net spend in 14/15 up to and including the sale of Santon. Wow so we have 5 mill to spend in the summer ? Unless we sell more players ? Wow !! I have no idea honestly. My view has always been informed by the 2011 mission statement and the actions that have followed it. The club said it will spend what it can afford to spend without Ashley putting money in, and it has done (unfortunately, while impairing the club revenue by stealing advertising space and retail profits from it - but claiming to be maximising it by refusing free tickets to players families and ex-players or sacking off one of our most committed players because he got cancer etc.) Taking the profits at face value would suggests we would have £5m to spend next season without selling, but the accounting tricks used to lower income could be disguising a good size cash balance. We'll find out in a couple of days I suppose.

Not sure whow this squad value depreciation works. Across 13/14 NUFC disposed of the registrations for Harper, Simpson, Perch, Cabaye, Gosling, Shola and Tavernier. Added Perez and Kemen. Could you convince HMRC that constitutes a £25m cost to your squad value? Or are we saying that linear amortisation on the likes of Coloccini, Obertan, Anita, Gouffran etc is clearly far too optimistic so their values should be dropped to a more realistic level? Or a combination of both.

Said before. I now think we're at £5m as the kitty for this summer. Basically Our operating Profit. It'll actually be lower because we're going to finish lower in the league so broadcasting income will be down too. £18.7m profits reported in 13/14 and I make it an 18.6m net spend in 14/15 up to and including the sale of Santon.

Full details coming on the eve of the Derby? Just coincidence like. Not at all an attempt to bury the fiddling.

The further assumption you can make is that having sold Cabaye for £19m in 13/14 to report an £18.7m profit, the £18.6m spend in 14/15 should lead to losses approaching £20m in 14/15... No new TV deal, no new commercial deals, no extra matchday income from cups.... so fuck all to spend on a manager or players.

Just noticed... #NUFC profit after Tax 2013/2014 = £18.7m #NUFC Net Transfer Spend 2014/2015 = £18.6m Looks like my view that the club spends what it earns was spot on. Shame they're doing their utmost keep that as low as possible.

I'd take a "creatively" low profit, for tax reasons, coupled with £25 Mill cash at bank though (not holding my breath) Can you fiddle money you've just hoyed into the bank as a cost like? Oh aye, if you think about it that's basically what amortisation is, it's a book cost but it's not real cash leaving the bank. But without saying "the stadium fell apart" I don't see it stretching to £30m on that front. I suppose what we have here is a sea change. We've gone from a club that would cut (accounting and real) costs wherever possible to move the club towards profitability on the books. Now we have a profitable club the accounting department switch all their effort to making costs as high as possible (without the club actually incurring real costs) to avoid getting into a tax paying situation. This is how much the new TV deal for 13/14 has added to each clubs reported operating profits from 12/13...

I'd take a "creatively" low profit, for tax reasons, coupled with £25 Mill cash at bank though (not holding my breath) Can you fiddle money you've just hoyed into the bank as a cost like?

http://tapatalk.imageshack.com/v2/15/03/25/75c87742c5bf89bbac9966ef33c9ebc2.jpg All the ticket prices for 14/15 are basically known now. Wrote about the rip off of ST holders.... http://www.themag.co.uk/2015/03/newcastle-season-ticket-holders-paying-more-than-general-public/

I don't insist on using anything, I provided before player trading AND before Tax. Happy to be corrected with any metric.

Yes, and the total losses under Ashley are still £8.7m. Accounts coming soon will take nufc into overall profit for the first time since Ashley arrived.

Operating profit/loss is intrinsic to what the club can afford to do. If the club is hemorrhaging £30m a year before player trading, then players have to be sold to plug that leak. If the club is just about breaking even then players have to be sold before we can buy. If the club is earning £30m, then we can spend that on players before we sell anyone. That's not true like, not at all. Amortisation which hits that profit isn't cash hemorrhaging out of the club (especially as these days the transfer fee is usually paid up front). You don't have to desperately sell players to cover the amortisation loses to stop the debt growing. If the club is breaking even after amortisation, then it will almost certainly have a decent positive cashflow (ie money which could be used to pay off debt, buy players without selling, or sit in the bank). This operating profit/loss before player trading is a false position to use when you're talking about how much the club has to spend. But then you're getting into complex accounting practices most people aren't interested in, and I struggle with myself. But I can follow that through to some degree.... In 13/14 we sold Cabaye for £19m and bought no-one, most would call that a £19m profit, but it wasn't, amortisation came into play as in my previous pic and the player trading for the year actually showed a profit on £16.9m. A couple of million less than people would assume. In 14/15 keeping it simple we spent £37m but recouped £18.3m, which means we spent £19.1m. However accounting for amortisation, the actual accounting profits on those sold were... Debuchy +£6.36 Mbiwa +£1.24 Santon +£1.74 Ben Arfa -£0.73 Giving a total of just £8.62m recouped, ten million less than the laymans view. That means our net spend in 14/15 was more like £29m. £10m more than most assume. We received money for Pardew as well. Spot on. And I'll never be able to get even the transfer fees right as none are disclosed, let alone calculating the amortisation exactly. It's all educated guesswork. But comparing the operating profit to total profit before tax gives an accurate picture of how the club has mitigated losses (or reinvested profits once we get a set of accounts that shows an operating profit).

Operating profit/loss is intrinsic to what the club can afford to do. If the club is hemorrhaging £30m a year before player trading, then players have to be sold to plug that leak. If the club is just about breaking even then players have to be sold before we can buy. If the club is earning £30m, then we can spend that on players before we sell anyone. That's not true like, not at all. Amortisation which hits that profit isn't cash hemorrhaging out of the club (especially as these days the transfer fee is usually paid up front). You don't have to desperately sell players to cover the amortisation loses to stop the debt growing. If the club is breaking even after amortisation, then it will almost certainly have a decent positive cashflow (ie money which could be used to pay off debt, buy players without selling, or sit in the bank). This operating profit/loss before player trading is a false position to use when you're talking about how much the club has to spend. But then you're getting into complex accounting practices most people aren't interested in, and I struggle with myself. But I can follow that through to some degree.... In 13/14 we sold Cabaye for £19m and bought no-one, most would call that a £19m profit, but it wasn't, amortisation came into play as in my previous pic and the player trading for the year actually showed a profit on £16.9m. A couple of million less than people would assume. In 14/15 keeping it simple we spent £37.4m but recouped £18.3m, which means we spent £19.1m. However accounting for amortisation, the actual accounting profits on those sold were... Debuchy +£6.36 Mbiwa +£1.24 Santon +£1.74 Ben Arfa -£0.73 Giving a total of just £8.62m recouped, ten million less than the laymans view. That means our net spend in 14/15 was more like £29m. £10m more than most assume.

Reducing the value of an asset over time. I guess with players it reflects the fact that they are worth less as their contracts run down and they age. Also has a tax benefit because the amount lost reduces profit apparently: http://lexicon.ft.com/Term?term=amortisation cheers. If that's the case though, how is that calculated, especially considering you'd expect young players like Santon/MYM's value to increase over time, not decrease. Sissoko isn't getting less valuable the linger we have him. He is, because if his contract expires he walks away for nothing.

Yeah, THAT is the problem, not the amounts being spent. In the words of Keegan “Mike Ashley doesn't know anything about football" All he knows is business, and turning an overall profit on 3 players without an appearance between them in 14/15 is the sort of thing he'll continue to jump at. My hope is that a better manager would actually be playing those players though.

Well, there's that too. We have made some absolutely horrendous sales lately. Ben Arfa released for free. Yanga-Mbiwa for 5m was it? Santon sold for 2.8m? We will have to spend big just to not go backwards. Ashley will see those as good sales, apart from Ben Arfa, all profitable otherwise

Operating profit/loss is intrinsic to what the club can afford to do. If the club is hemorrhaging £30m a year before player trading, then players have to be sold to plug that leak. If the club is just about breaking even then players have to be sold before we can buy. If the club is earning £30m, then we can spend that on players before we sell anyone. I understand that. It's just from 2011 onwards we have seen very manageable operational losses (which shouldn't have even been posted if SD paid a market fee for its advertising btw) and significant profit after player trading. We have not see significant investment in the playing squad in that time, and even worse, we don't even seem willing to pay the going rate for an actual manager who could transform the club's fortunes. I just don't see the significance of going from a very small red to black for operational profit you attribute to it. Do you really think Ashley will start throwing the cash (generated by the club itself mind you) around now, when he could have reinvested profits for the past four years and chose not to? Just because the losses were minimised by 2011 it didn't mean the debt accrued in the 4 years prior was going to be written off. That's why I did the pics of Ashley's tenure. Operationally at the end of 2013 we remained over £100m down and after player trading £10m down. I don't think he'll throw the cash around at all. He'll keep a good working kitty to invest in January in case we're in trouble. Before spending on players he'll use millions on building the training complex and a better coach and staff.

Never called it enormous but keep putting words in my mouth. If Sports Direct was losing £30m a year, Ashley would not whack in £400m of his personal fortune to spruce up the shops and get it profitable again. He's not going to do that at nufc to push for the champions league either. He's not in football for the same reasons as Abramovic or Mansour. From 2007 to 2009 AVFC had a total loss of £57m and NUFC had a toal loss of £70m. Since then Villa have lost a further £161m (total compined loss almost a quarter Billion) chasing success while NUFC have turned it into a £27m profit getting relegated and promoted then maintaining a place in the league. For 2 owners not looking to invest like the big boys, Lerner's left AVFC in a far worse position, even having written off debt, not just interest on it.

I've fallen for nothing man. It's exactly what they said was the approach 4 years ago. I hated it then and I hate it now, but at least it's reaching the point where we can buy without selling. The only people fooled will be the likes of Lovenkrands and Ryder in the chronicle today saying "Ashley needs to spend more", as if Ashley has an epiphany and decides to get more adventurous. That would be bollocks. It's been interminably slow growth and will continue at a similarly incremental way. He's not put a penny in for 5 years and nor will he ever again.

Operating profit/loss is intrinsic to what the club can afford to do. If the club is hemorrhaging £30m a year before player trading, then players have to be sold to plug that leak. If the club is just about breaking even then players have to be sold before we can buy. If the club is earning £30m, then we can spend that on players before we sell anyone.

Cabaye was sold in 13/14 an earlier financial year. 14/15 then saw the largest net spend and the largest gross spend under Ashley. http://41.media.tumblr.com/2a0beee0e12fb1801fd2a2ac2cb96260/tumblr_nlo1kbruEf1u89ei4o1_400.png Don't know where you get £40m from. £14.7m up on transfer fees over Ashley's time.