quayside

Very little IMO. Had we stayed up most of the big earners were still in line to leave. The main difference is we could have kept the players on lower wages like Bassong, or at least made money from them. As it is because of the relegation we lost £30m cash and all the profit from players like Bassong and Martins, so in effect we lost nearly £60m in cash and assets. Yes we've come back up with a leaner wage bill (maybe £10m less per year then if we hadn't been relegated), but our debt is now significantly bigger. Club debt has stayed the same as ashley forked out for our losses in the championship. Club's debt has risen. It's just that our debtor is our owner. It still will be paid back, and makes it harder to be sold. Er why? External lenders aren't going to even contemplate negotiating the value of their debt in a sale situation. External lenders can and do maintain previously arranged repayment structures, or negotiate new ones, though. Ashley wants it all paid back in one go. If he ends up loaning us another £20m for some reason, the sale price of the club will go up £20m. Ah - I didn't realise you'd spoken to him about this.

Very little IMO. Had we stayed up most of the big earners were still in line to leave. The main difference is we could have kept the players on lower wages like Bassong, or at least made money from them. As it is because of the relegation we lost £30m cash and all the profit from players like Bassong and Martins, so in effect we lost nearly £60m in cash and assets. Yes we've come back up with a leaner wage bill (maybe £10m less per year then if we hadn't been relegated), but our debt is now significantly bigger. Club debt has stayed the same as ashley forked out for our losses in the championship. Club's debt has risen. It's just that our debtor is our owner. It still will be paid back, and makes it harder to be sold. Er why? External lenders aren't going to even contemplate negotiating the value of their debt in a sale situation.

I know there are those that think that relegation was a godsend for Ashley, in fact some believe that it was part of his master plan, but I don't think it was necessary. When the next accounts are produced shortly we will find out exactly the size of the drop in revenue from Premiership to Championship. I think it will be a significant amount and I just can't see that having that reduction in income was needed to get the cost base down, especially as the wage bill would still have been higher than a number of Premiership clubs. I think the negatives of Ashley's reign are well documented and, as I have said before, some of that stuff is indefensible. Having caused the club to be relegated he did at least do what was required to get it back up again. His investment would have been pretty much shredded in value if we could not get out of the Championship. The biggest positive is that he has been able to fund the club (and of course his own f*ck ups) without using external finance. Without going into a tangental debate on the disadvantages of external finance, I would hope that there have been enough examples in the football industry for people to see my point. I have been impressed by some of the deals done in the transfer market and the clear signal that we are looking for value and aren't going to spunk large sums on crap players. And I am of course aware that the spectre of Smith, Xisco etc can be hoisted but I was thinking more of recent times. I can't say that the appointment of Pardew looks like a mistake at present. When he bought the club we had just come off a 13th place in the League, had Allardyce as our manager, had an expensive and under performing squad and (I'll tread carefully here) were not in robust financial health. Let's see if Ashley can improve on that?

Nice one What do you sing that to the tune of? Edit: Looks a bit like the Stones song?

People who assume that anyone who is capable of stepping back from our situation and viewing it objectively must be an Ashley sympathiser cause me some amusement as well.

http://news.bbc.co.uk/sport1/hi/football/eng_prem/8595655.stm If we finish mid table, and with the high number of games we have on TV, we should easily get over £50m. Poor old Ashley, with income like that there's no hope for him getting his investment back. Aye add that to the almost £50m profit the club has made in transfer fees since 2006 and things are indeed pretty grim for Mike 'Oliver Twist' Ashley. He must have loaned the club £130 million for fun then.

Less than 70% wasn't it? So about £56m.

Non causa pro causa. At best a false appreciation of Pardew's agency in the determination of any result; a classic case of causal oversimplification. Even more worryingly, you show no evident understanding of the plurality of sufficient causes of a goal event in a football game. Additionally, I have some concerns about the sample set you have chosen to use. A much more interesting thesis would be how you think the next 11 games will go, instead of commenting only after the accident of what happens to have been. An even more interesting thesis would be on how you manage to still talk out of your ass when the pet shop is open. How does enough air make it past the suffocating gerbil's backside?

Fourth highest number of goals scored in the League - and only 1 behind City right now.

No you can't say that. The casino buddy of Llambias has no effect on this bunch of lads. Ok?

Nail on head. x 2 That will be the number of goals he set up tonight then

We needed to knock over sides around or below us like Birmingham, Wigan, West Ham and be hard to beat against the rest. AP is getting it done

Hope so, I'll not say any more on the tired old 2007 finances debate. Jose is a tad better than Finnan imo

To better understand, I'd like to get some definitive answers to the following questions. 1) What was the size of the negative cash flow in 2007? 2) What was the size of the increased TV revenue in 2008? 3) Can you explain the following note from the accounts considering we had no remaining assets to borrow against: 4) What was the accounting valuation of the playing staff in 2007 which is part of the valuation of the club leading to the insolvent position? Considering we have subsequently sold players on the playing staff in 2007 for around £90m in transfer fees do you consider the accounting valuation of the playing staff of a football club to typically be an accurate figure? Should an insolvent trading position be reached is it out of the question to revalue a company's assets? 5) The typical mortgage rate in 2007 was 6.5%. What do you consider an "extortionate" business rate of interest at the time, and how much of the club debt was over that rate? 6) What was the actual size of the debt when Ashley bought the club? How much more into debt had the club spiralled since 2001 when the stadium expansion was complete? 7) What precisely was withheld from the publicly available 2006 accounts and only available on due diligence which would cause someone to pay the equivalent of £200m (price + debt) for a business which most now consider it was obvious to see was shortly destined for administration, and could therefore have been very soon picked up for a fraction of that value? I knew it was a mistake to go into this You and I have debated this subject before on more than one occasion. Its all out there on previous threads. You have the accounts, Macbeth's website and various other points of reference that you rely on. You have formed your own conclusions on this and I don't agree with you. UV interrogation posts such as the one above are normally used when you think you have the answers to your own questions. I'm tempted to leave it at that but don't want to be thought of as someone who ducks an issue, even when every nuance on the subject has already been debated ad nauseam. 1)Cash flow history: 2005 £9 million negative 2006 £14 million negative 2007 £5 million negative 2008 £34 million negative 2) £15 million increase in Media revenue in 2008 over 2007. 3) No - can you? 4) £40 million Not especially accurate way of valuing players. The idea is to reflect what an asset cost (which is not subjective) as opposed to what someone might think it was worth (which is subjective). But your point is irrelevant. Can you list the players we have sold that add up to £90 million? And what was their valuation in the summer of 2007? Bear in mind also that Owen subsequently went for nothing and yet he would have had an accounting valuation of around £8 million in the 2007 accounts. How can you? You only know what something’s worth when you sell it. See also what Colo said in his post. 5) Other than a small loan of £1.5 million all of it was at higher rates than the mortgage rate you quote, the range was from 7.36% to 11.72%. 6) £78 million in June 2007 - being structured loans of £68 million and bank overdraft of £10 million. The debt had reduced since 2001 as repayments had been made in accordance with the loan agreements. 7) What had the 2006 accounts got to do with due diligence? You do due diligence on the financial situation at the time you purchase a business not on what has already been published and audited and is 11 months out of date. Due diligence at the time would have revealed that the club was making significant losses, as was subsequently revealed when the 2007 accounts were published. As a result of these losses this disclosure was included in the 2007 accounts, “The Directors have also received a commitment from St James Holdings Limited and from its ultimate controlling party Mr MJW Ashley that they will provide the Company with financial support so that it can meet its debts as they fall due for a period of at least 12 months from the date of these financial statements. On this basis, the Directors have prepared the financial accounts on a going concern basis.” This note was not included in the 2006 accounts (it was not needed) and this is why people who acquire businesses are advised to do due diligence.

And people forget that it was Ashley that brought in the likes of Colo, Enrique, Gutierrez and Xisco on £40k+ wages? (Never mind signing players like Geremi, Smith, Viduka and Cacapa on ridiculous wages as well when he first came here). Who has forgotten that? He owned the club and backed his manager first up. A mistake of course, followed by a badly thought out over reaction - you don't want Colo and Enrique (and more controversially Jonas maybe) to play for us? He's funded every decision he's made. He may have funded all the decisions but the majority have been bad decisions(often quite terrible) that have cost the club money. Instead of writing off these bad decisions that he has made he wants to recuperate the losses with little regard for the direction of the club. Shocking decisions no argument there. Need some proof on what you say in your second sentence. And how has he shown that he wants to recuperate his losses? The sale of Andy Carroll isn't enough of an answer at present.

And people forget that it was Ashley that brought in the likes of Colo, Enrique, Gutierrez and Xisco on £40k+ wages? (Never mind signing players like Geremi, Smith, Viduka and Cacapa on ridiculous wages as well when he first came here). Who has forgotten that? He owned the club and backed his manager first up. A mistake of course, followed by a badly thought out over reaction - you don't want Colo and Enrique (and more controversially Jonas maybe) to play for us? He's funded every decision he's made.

There's no scaremongering ffs. We were f*cked. It might have involved administration or it might have involved someone with wings coming in to bale us out but tell me how you get out of the shyte we were in and you've got an audience.

They are all still there, some have been through administration and are shadows of what they were (in football terms). But any talk, at the time of their demise, of say Leeds or Portsmouth not existing was so out of the question as to be laughable? Don't think so.

That's exactly what I said, and 80 agreed with. "but talk of the club not existing is laughable." As I said earlier a very glib dismissal of the club's situation at the time. Some offering on how the club might have survived would strengthen your case.

And also partly base their beliefs on statements released by the Ashley regime after it first took over. They seemed credible enough people at the time, but in light of subsequent events, these claims should also be revisited... Not saying they weren't bad, they clearly were, but I wouldn't be surprised to find that point was spun to breaking point. As I recall a number of the debts were called in due to the change in ownership, which obviously would make things look worse. I'm not saying the cash injection wasn't very welcome, but talk of the club not existing is laughable. Yep, that's right. Even if some find it laughable, we had favourable loans based upon debtors having faith in our old administration. For whatever reason (not trying to criticise in this instance), they withdrew their credit when Ashley bought us. Sorry but that is a very glib dismissal of the poor financial legacy of our previous owners. I've spouted long and hard on this subject elsewhere on this board. Not going to do so again - especially on a Jose Enrique thread ? It's true. Our structured debts suddenly got toploaded due to a security clause, when that happens by surprise it's liable to make any situation worse than it was before. You don't need to preach to me about problems the old regime did have, though, I'm converted. I really didn't want to go into this but: Structured debt is fine whilst you are generating positive cash flows and can meet the loan repayments that are in the structure, and the interest payments due on the loans. During 2007 the club was not generating positive cash flows so fresh funding was needed. There was nothing left to borrow against as all the clubs assets and future revenue streams had already been used as collateral (in the case of the training ground it had been used twice). The interest rates on the loans were extortionate reflecting the risk perceived by the lenders. The club's balance sheet showed an insolvent position which in itself would have given rise to the issue of whether accounts could be prepared with the club being a going concern. In order for the accounts to be prepared on a going concern basis the auditors would require proof that the club could continue trading for the foreseeable future, and this is in a scenario where cash flows are negative, fresh finance is needed and there are no assets to borrow against. In the end Ashley gave an undertaking to keep it going and provide whatever finance was needed - and so the 2007 accounts were prepared on a going concern basis. If he hadn't been around to do that can we assume that the previous majority shareholders would have given that undertaking? And btw once a set of accounts are given a going concern qualification (let alone are not prepared on a going concern basis) structured creditors have a right to foreclose. Not certain administration but it was certainly worthy of concern.

And also partly base their beliefs on statements released by the Ashley regime after it first took over. They seemed credible enough people at the time, but in light of subsequent events, these claims should also be revisited... Not saying they weren't bad, they clearly were, but I wouldn't be surprised to find that point was spun to breaking point. As I recall a number of the debts were called in due to the change in ownership, which obviously would make things look worse. I'm not saying the cash injection wasn't very welcome, but talk of the club not existing is laughable. Yep, that's right. Even if some find it laughable, we had favourable loans based upon debtors having faith in our old administration. For whatever reason (not trying to criticise in this instance), they withdrew their credit when Ashley bought us. Sorry but that is a very glib dismissal of the poor financial legacy of our previous owners. I've spouted long and hard on this subject elsewhere on this board. Not going to do so again - especially on a Jose Enrique thread

Nobody is asking for large funds of fresh investment, we're asking to re-invest what has come in from the Carroll transfer at a time when Llambias has been saying we're close to breaking even. I was talking in general about the financial model Ashley is operating. The Carroll deal is a case apart, as was Spurs' sale of Berbatov. As it happens I'm not concerned that the every penny of the Carroll money is reinvested tbh, its more a case of getting players in who can do what we need. Over the years some very good players have had cost very little - e.g. Lee, Solano, Given and now Tiote of course. So money spent isn't the criterion I would use.

Yes, but they didn't have Mike Ashley and Derek Llambias running running them From our signings this season in Ben Arfa and Tiote i would say things are going in the right direction transfer policy wise. No, two different points. I'm not denying the possibility they can run (parts of) a club well, I'm saying Arsenal and Sevilla had Boards that wanted to achieve footballing success, whereas I suggest Ashley and Llambias don't . And for good measure they'll denigrate the club by treating it like a prostitute, going for streaks across the pitch, abusing good club servants and appointing Joe Kinnears of the world. This is really the fundamental difference between those that give Ashley a chance and those that won't. The utter f*ck ups of the past involving KK, Wise, JFK etc cannot be defended. The rare public pronouncements from "the club" by Llambias suggest that he is an utter c*nt with no class about him whatsoever. And from that perspective I welcome Pardew who does at least make an effort to communicate in a way that those that follow our club can relate to. The key though is whether there is anything about Ashley that wants the club to succeed on the pitch. I can totally understand the point of view you (and others) put forward and there is plenty of "previous" to back up your case. Fwiw I do think Ashley wants success. I don't think he wants to turn up and watch the team he owns being mediocre also rans. But he wants it done his way, and there is clearly a financial cap on what he will and what he won't do. He's stuck many millions into the club and to date not recovered any of it. How he responds to that situation is where his strategy will be defined. And of course if he really does want success there is the question of whether it is possible under the model he is operating. It is almost certain that whatever strategy he adopts it will depart from the one wanted by a lot of fans as it will not involve large funds of fresh investment in the squad.

Is that right? I would have thought that all our assets would have a value on the balance sheet. Not that I know much about this stuff! Players are valued at what they cost us. That value is then wrtitten down over the duration of the contract. Carroll cost us nothing so his value in the balance sheet would have been nothing. That is true, but a buyer will always value what a team is worth in their own terms, not what is written on paper. That's an entirely different point. The question was on how players are valued in the accounts. Any potential buyer would have to take a view on what the assets and any future earnings are worth. Doing due diligence is a decent idea as well. It is, but the football world isn't like a normal business that has property, cash etc as assets. Barcelona will have a team of assets worth nothing on paper i.e. messi, pedro, xavi, puyol, iniesta. Does that devalue the club, ofcouse it doesn't if a buyer was interested. I'm confused. I didn't say anything at all about devaluing a club because the balance sheet understates player values. If balance sheet values were used to value a business then Ashley should have been paid by Hall and Shepherd to take it off their hands. And a football club might well have cash and property btw.

Is that right? I would have thought that all our assets would have a value on the balance sheet. Not that I know much about this stuff! Players are valued at what they cost us. That value is then wrtitten down over the duration of the contract. Carroll cost us nothing so his value in the balance sheet would have been nothing. That is true, but a buyer will always value what a team is worth in their own terms, not what is written on paper. That's an entirely different point. The question was on how players are valued in the accounts. Any potential buyer would have to take a view on what the assets and any future earnings are worth. Doing due diligence is a decent idea as well.