Ashley pays off further £45m of debt, Mort says club could well have folded

[ChezGiven]

Thanks to quayside for his objective and professionally sound descrpition of the accounts then...

 

[quayside]

To be fair we only had an operating loss of £300k - the £33m loss was a mix of paper depreciation of players (c£16m), an exceptional impairment charge of £7m for Luque, losses on disposal of players and interest charges.

 

Additionally, they have changed their year end which means that these accounts incorporate 2 summer transfer windows instead of 1, which given our trading and buying of players recently doesn't make these numbers a surprise.

 

Interesting that the net outlay on players was £5.4m compared to the previous year of £25.2m!

 

 

 

The Luque thing was a one off. But the amortisation of players and the finance costs are charges that occur every year and just about every football club has them though. 

 

Accumulated trading losses of £93 million at 30/06/07. Not healthy.   

[mouldy_uk]

As we have no debt now, does that make us technically better of than Liverpool & Manure who have huge debts against their names. Or does it all depend on how you look at it?

[ChezGiven]

To be fair we only had an operating loss of £300k - the £33m loss was a mix of paper depreciation of players (c£16m), an exceptional impairment charge of £7m for Luque, losses on disposal of players and interest charges.

 

Additionally, they have changed their year end which means that these accounts incorporate 2 summer transfer windows instead of 1, which given our trading and buying of players recently doesn't make these numbers a surprise.

 

Interesting that the net outlay on players was £5.4m compared to the previous year of £25.2m!

 

The Luque thing was a one off. But the amortisation of players and the finance costs are charges that occur every year and just about every football club has them though. 

 

Accumulated losses of £93 million at 30/06/07. Not healthy.   

 

Amortisation is just a way of valuing your assets and is not a real cost though. We all know that spending 16m on Owen doesnt mean we still have a 16m asset. Noone comes along and takes that depreciated value off us.

 

I thought you said you had qualified?

[quayside]

To be fair we only had an operating loss of £300k - the £33m loss was a mix of paper depreciation of players (c£16m), an exceptional impairment charge of £7m for Luque, losses on disposal of players and interest charges.

 

Additionally, they have changed their year end which means that these accounts incorporate 2 summer transfer windows instead of 1, which given our trading and buying of players recently doesn't make these numbers a surprise.

 

Interesting that the net outlay on players was £5.4m compared to the previous year of £25.2m!

 

The Luque thing was a one off. But the amortisation of players and the finance costs are charges that occur every year and just about every football club has them though. 

 

Accumulated losses of £93 million at 30/06/07. Not healthy.   

 

Amortisation is just a way of valuing your assets and is not a real cost though. We all know that spending 16m on Owen doesnt mean we still have a 16m asset. Noone comes along and takes that depreciated value off us.

 

I thought you said you had qualified?

 

Of course its a cost.

 

If you don't amortise the costs of purchasing, for example, Michael Owen then you would take the hit of £16 million in your profit and loss account in one go. All amortisation does is spread that cost .i.e. £4 million over 4 years. So you think we didn't shell out that money on Owen then? Its not a fictional cost ffs.

[thomas]

it's like watching one of those nature shows where suddenly a rival male shows up to challenge the established patriarch

[mouldy_uk]

Accountant FIGHT!!!!!....

 

 

:shepherd:

[Colos Short and Curlies]

Don't make me come in there with my bitch stick boys!

 

The silver back accountant is in the building!

[NG32]

http://www.youtube.com/watch?v=XyhhFzE5O5U

 

 

Battle of the accountants.

 

 

[ChezGiven]

To be fair we only had an operating loss of £300k - the £33m loss was a mix of paper depreciation of players (c£16m), an exceptional impairment charge of £7m for Luque, losses on disposal of players and interest charges.

 

Additionally, they have changed their year end which means that these accounts incorporate 2 summer transfer windows instead of 1, which given our trading and buying of players recently doesn't make these numbers a surprise.

 

Interesting that the net outlay on players was £5.4m compared to the previous year of £25.2m!

 

The Luque thing was a one off. But the amortisation of players and the finance costs are charges that occur every year and just about every football club has them though. 

 

Accumulated losses of £93 million at 30/06/07. Not healthy.   

 

Amortisation is just a way of valuing your assets and is not a real cost though. We all know that spending 16m on Owen doesnt mean we still have a 16m asset. Noone comes along and takes that depreciated value off us.

 

I thought you said you had qualified?

 

Of course its a cost.

 

If you don't amortise the costs of purchasing, for example, Michael Owen then you would take the hit of £16 million in your profit and loss account in one go. All amortisation does is spread that cost .i.e. £4 million over 4 years. So you think we didn't shell out that money on Owen then? Its not a fictional cost ffs.

 

It doesnt affect the cash flow is what i meant, you seemed to inisinuate we were paying money.

 

Its just deprecation in the value of assets, nothing more.

[Dogmatix]

To be fair we only had an operating loss of £300k - the £33m loss was a mix of paper depreciation of players (c£16m), an exceptional impairment charge of £7m for Luque, losses on disposal of players and interest charges.

 

Additionally, they have changed their year end which means that these accounts incorporate 2 summer transfer windows instead of 1, which given our trading and buying of players recently doesn't make these numbers a surprise.

 

Interesting that the net outlay on players was £5.4m compared to the previous year of £25.2m!

 

The Luque thing was a one off. But the amortisation of players and the finance costs are charges that occur every year and just about every football club has them though. 

 

Accumulated losses of £93 million at 30/06/07. Not healthy. 

 

Amortisation is just a way of valuing your assets and is not a real cost though. We all know that spending 16m on Owen doesnt mean we still have a 16m asset. Noone comes along and takes that depreciated value off us.

 

I thought you said you had qualified?

 

Of course its a cost.

 

If you don't amortise the costs of purchasing, for example, Michael Owen then you would take the hit of £16 million in your profit and loss account in one go. All amortisation does is spread that cost .i.e. £4 million over 4 years. So you think we didn't shell out that money on Owen then? Its not a fictional cost ffs.

 

It doesnt affect the cash flow is what i meant, you seemed to inisinuate we were paying money.

 

Its just deprecation in the value of assets, nothing more.

 

Thank God for that

[TooonDoom]

Freddy Shepherd got nothing.

 

I wonder why Shepherd would agree to that 

[thomas]

Freddy Shepherd got nothing.

 

I wonder why Shepherd would agree to that 

Chairing Newcastle to the average 5th best league finish over the last 10 years was reward enough I suppose.

[quayside]

To be fair we only had an operating loss of £300k - the £33m loss was a mix of paper depreciation of players (c£16m), an exceptional impairment charge of £7m for Luque, losses on disposal of players and interest charges.

 

Additionally, they have changed their year end which means that these accounts incorporate 2 summer transfer windows instead of 1, which given our trading and buying of players recently doesn't make these numbers a surprise.

 

Interesting that the net outlay on players was £5.4m compared to the previous year of £25.2m!

 

The Luque thing was a one off. But the amortisation of players and the finance costs are charges that occur every year and just about every football club has them though. 

 

Accumulated losses of £93 million at 30/06/07. Not healthy.   

 

Amortisation is just a way of valuing your assets and is not a real cost though. We all know that spending 16m on Owen doesnt mean we still have a 16m asset. Noone comes along and takes that depreciated value off us.

 

I thought you said you had qualified?

 

Of course its a cost.

 

If you don't amortise the costs of purchasing, for example, Michael Owen then you would take the hit of £16 million in your profit and loss account in one go. All amortisation does is spread that cost .i.e. £4 million over 4 years. So you think we didn't shell out that money on Owen then? Its not a fictional cost ffs.

 

It doesnt affect the cash flow is what i meant, you seemed to inisinuate we were paying money.

 

Its just deprecation in the value of assets, nothing more.

 

 

The cash on the players has gone, its spent. The amortisation through the profit and loss allows the club to spread that cash spend over the years of the players' contracts. Its a very real cost, relates to real money and you can't just brush it off. It really does not relate to something mythical that never happened.

 

And by the way I have no agenda. I was curious about what happened and had a look. I read all the stuff about Ashley paying off the debt and the club being in a worse state than he'd thought etc and thought that Mort might be portraying it as being more heroic than it actually was.

 

Not especially you but if anyone can look at the clubs balance sheet as at 30/06/07 and think that its ok lets hear why.

 

Accumulated trading losses of £92 million

 

And net liabilities of  £16 million

 

 

[UV]

Can one of you accountants please tell me what qualifications I need to get to "earn" £2.9 million by giving some advice on refinancing a loan.

 

:fictionaltheologicalcharacterwept: I thought people like Willie McKay were leeches, but that takes some beating.

 

 

Question: If player amortisation costs are included in the losses does that mean that player transfer fees are not included?

[Dave]

Can one of you accountants please tell me what qualifications I need to get to "earn" £2.9 million by giving some advice on refinancing a loan.

 

'Yes, I got your letter. Don't do it. Yes, I take Paypal.'

[quayside]

Can one of you accountants please tell me what qualifications I need to get to "earn" £2.9 million by giving some advice on refinancing a loan.

 

:fictionaltheologicalcharacterwept: I thought people like Willie McKay were leeches, but that takes some beating.

 

 

Question: If player amortisation costs are included in the losses does that mean that player transfer fees are not included?

 

You need to be a qualified accountant to earn that sort of money for a bit of aborted advice 

 

Transfer fees go into the prfit or loss on disposal of players registrations - in our case that showed a loss of £2 million for the year. I should think that Boumsong may have contributed to that.

[ChezGiven]

To be fair we only had an operating loss of £300k - the £33m loss was a mix of paper depreciation of players (c£16m), an exceptional impairment charge of £7m for Luque, losses on disposal of players and interest charges.

 

Additionally, they have changed their year end which means that these accounts incorporate 2 summer transfer windows instead of 1, which given our trading and buying of players recently doesn't make these numbers a surprise.

 

Interesting that the net outlay on players was £5.4m compared to the previous year of £25.2m!

 

The Luque thing was a one off. But the amortisation of players and the finance costs are charges that occur every year and just about every football club has them though. 

 

Accumulated losses of £93 million at 30/06/07. Not healthy.   

 

Amortisation is just a way of valuing your assets and is not a real cost though. We all know that spending 16m on Owen doesnt mean we still have a 16m asset. Noone comes along and takes that depreciated value off us.

 

I thought you said you had qualified?

 

Of course its a cost.

 

If you don't amortise the costs of purchasing, for example, Michael Owen then you would take the hit of £16 million in your profit and loss account in one go. All amortisation does is spread that cost .i.e. £4 million over 4 years. So you think we didn't shell out that money on Owen then? Its not a fictional cost ffs.

 

It doesnt affect the cash flow is what i meant, you seemed to inisinuate we were paying money.

 

Its just deprecation in the value of assets, nothing more.

 

 

The cash on the players has gone, its spent. The amortisation through the profit and loss allows the club to spread that cash spend over the years of the players' contracts. Its a very real cost, relates to real money and you can't just brush it off. It really does not relate to something mythical that never happened.

 

And by the way I have no agenda. I was curious about what happened and had a look. I read all the stuff about Ashley paying off the debt and the club being in a worse state than he'd thought etc and thought that Mort might be portraying it as being more heroic than it actually was.

 

Not especially you but if anyone can look at the clubs balance sheet as at 30/06/07 and think that its ok lets hear why.

 

Accumulated trading losses of £92 million

 

And net liabilities of  £16 million

 

 

 

No agenda and yet you've put words in my mouth twice now. 'Fictional cost', never said that 'something mythical that never happened', never said that either.

 

The key issue is that revenues and costs were balanced, the club makes a loss due to the acccounting practice but that loss doesnt mean the club is anymore in debt. It may increase its debt position elsewhere (for other reasons) but the 'recorded losses' dont mean that our real costs are greater than our revenues hence pushing the club towards bankruptcy. Its not like we had spent all 87m and then had to borrow money to pay the amortisation costs is it? They just get written down in the accounts and affect the tax position (in this case in a positive way). You can run a business like that forever as long as all operating costs are met.

[quayside]

To be fair we only had an operating loss of £300k - the £33m loss was a mix of paper depreciation of players (c£16m), an exceptional impairment charge of £7m for Luque, losses on disposal of players and interest charges.

 

Additionally, they have changed their year end which means that these accounts incorporate 2 summer transfer windows instead of 1, which given our trading and buying of players recently doesn't make these numbers a surprise.

 

Interesting that the net outlay on players was £5.4m compared to the previous year of £25.2m!

 

The Luque thing was a one off. But the amortisation of players and the finance costs are charges that occur every year and just about every football club has them though. 

 

Accumulated losses of £93 million at 30/06/07. Not healthy.   

 

Amortisation is just a way of valuing your assets and is not a real cost though. We all know that spending 16m on Owen doesnt mean we still have a 16m asset. Noone comes along and takes that depreciated value off us.

 

I thought you said you had qualified?

 

Of course its a cost.

 

If you don't amortise the costs of purchasing, for example, Michael Owen then you would take the hit of £16 million in your profit and loss account in one go. All amortisation does is spread that cost .i.e. £4 million over 4 years. So you think we didn't shell out that money on Owen then? Its not a fictional cost ffs.

 

It doesnt affect the cash flow is what i meant, you seemed to inisinuate we were paying money.

 

Its just deprecation in the value of assets, nothing more.

 

 

The cash on the players has gone, its spent. The amortisation through the profit and loss allows the club to spread that cash spend over the years of the players' contracts. Its a very real cost, relates to real money and you can't just brush it off. It really does not relate to something mythical that never happened.

 

And by the way I have no agenda. I was curious about what happened and had a look. I read all the stuff about Ashley paying off the debt and the club being in a worse state than he'd thought etc and thought that Mort might be portraying it as being more heroic than it actually was.

 

Not especially you but if anyone can look at the clubs balance sheet as at 30/06/07 and think that its ok lets hear why.

 

Accumulated trading losses of £92 million

 

And net liabilities of  £16 million

 

 

 

No agenda and yet you've put words in my mouth twice now. 'Fictional cost', never said that 'something mythical that never happened', never said that either.

 

The key issue is that revenues and costs were balanced, the club makes a loss due to the acccounting practice but that loss doesnt mean the club is anymore in debt. It may increase its debt position elsewhere (for other reasons) but the 'recorded losses' dont mean that our real costs are greater than our revenues hence pushing the club towards bankruptcy. Its not like we had spent all 87m and then had to borrow money to pay the amortisation costs is it? They just get written down in the accounts and affect the tax position (in this case in a positive way). You can run a business like that forever as long as all operating costs are met.

 

I had assumed that when you said that amortisation was not a real cost (just checked and you did say that) that you were implying that it was in some way "fictional" or "mythical". Both of those words, I believe, mean not real. 

 

As I said - the club had accumulated trading losses of £92 million at 30/06/07. There is no accounting practice that the club adopts that has contributed to that being anything other than not very good. All losses have to be funded with real money eventually. The club was in a mess in my opinion.

[Matt]

Can one of you accountants please tell me what qualifications I need to get to "earn" £2.9 million by giving some advice on refinancing a loan.

 

:fictionaltheologicalcharacterwept: I thought people like Willie McKay were leeches, but that takes some beating.

 

 

Question: If player amortisation costs are included in the losses does that mean that player transfer fees are not included?

 

You need to be a qualified accountant to earn that sort of money for a bit of aborted advice 

 

You don't have to be an accountant (thankfully!)

 

We'll just put you onto Ocean Finance anyway!

[ChezGiven]

So if we have a squad worth 50m and the clubs costs = revenues each year, as the squad value depreciates over time (representing a loss) who do we have to pay back?

 

As slugsy said, its paper depreciation, not a cost that has to be paid to someone.

[johnnypd]

To be fair we only had an operating loss of £300k - the £33m loss was a mix of paper depreciation of players (c£16m), an exceptional impairment charge of £7m for Luque, losses on disposal of players and interest charges.

 

Additionally, they have changed their year end which means that these accounts incorporate 2 summer transfer windows instead of 1, which given our trading and buying of players recently doesn't make these numbers a surprise.

 

Interesting that the net outlay on players was £5.4m compared to the previous year of £25.2m!

 

there was also an exceptional payment in for the Owen injury tho, also around £7m, which cancels out the Luque fee.

[quayside]

So if we have a squad worth 50m and the clubs costs = revenues each year, as the squad value depreciates over time (representing a loss) who do we have to pay back?

 

As slugsy said, its paper depreciation, not a cost that has to be paid to someone.

 

 

And how did the club acquire a squad worth £50 million? With monopoly money?

[ChezGiven]

So if we have a squad worth 50m and the clubs costs = revenues each year, as the squad value depreciates over time (representing a loss) who do we have to pay back?

 

As slugsy said, its paper depreciation, not a cost that has to be paid to someone.

 

 

And how did the club acquire a squad worth £50 million. With monopoly money?

 

That doesnt answer the question. Say its all bought and paid for with hypothetical CL campaign. Then, all things being equal, answer the question. We're back at square one with a squad worth 50m and revenue = cost. Who do we pay for the depreciation in value of players over time?

[James]

In the end of the day, all asset depreciation does is reduces the valuation of the company, and not the amount of cash the club has available.

 

In terms of the Ashley empire though, a decreased valuation of a company is a loss to him, as the club is a saleable asset.

 

Player valuation depreciation is difficult to measure though in the end of the day, as there are other major determinants such as demand, and the possibility that they could sign a new contract.