Dave Posted January 21, 2009 Share Posted January 21, 2009 Just to be clear about the 20m, 17.5m of it is just accounting, its not real money that ashley has to transfer out of the sportsdirect coffers into northern rock, its just a reduction in the value of the playing staff. The real loss is 2.5m as far as i can tell. If you think about the amount of money that will be freed up when one of those asset values falls to zero, the financial picture is not that bleak. That's what I was getting at earlier, just didn't phrase it that well. So if the 'real' loss is £2.5m, are people justified in claiming Ashley should have spent more on the first team? ashley has sunk 40 million over the 12 months to get the loss to 2.5 million, it would have been 42.5 million without the 30 million and the further 10 million sunk in now I understand why there is the sell before we buy policy Fair enough when I read it that way. Link to post Share on other sites More sharing options...
midds Posted January 21, 2009 Share Posted January 21, 2009 So how much was Milner 'worth' when we flogged him then? I know this will be included in the next set of accounts but if we bought him for £5m and he lost his value by about a million a year and we got £12m for him then he'll have made us about £10m profit. Have I got that right? Link to post Share on other sites More sharing options...
Liam Liam Liam O Posted January 21, 2009 Share Posted January 21, 2009 So how much was Milner 'worth' when we flogged him then? I know this will be included in the next set of accounts but if we bought him for £5m and he lost his value by about a million a year and we got £12m for him then he'll have made us about £10m profit. Have I got that right? Yeah pretty much Link to post Share on other sites More sharing options...
Dave Posted January 21, 2009 Share Posted January 21, 2009 So where has that money gone? Link to post Share on other sites More sharing options...
johnnypd Posted January 21, 2009 Share Posted January 21, 2009 Just to be clear about the 20m, 17.5m of it is just accounting, its not real money that ashley has to transfer out of the sportsdirect coffers into northern rock, its just a reduction in the value of the playing staff. The real loss is 2.5m as far as i can tell. If you think about the amount of money that will be freed up when one of those asset values falls to zero, the financial picture is not that bleak. indeed. if the £6.6m was our last loan repayment then you'd assume we're going to make a profit this season (take away a couple of mil from reduced crowds/tho that might be offset with 3 yr ticket payments coming in, i dunno). of course Ashley might have arranged it that we make reduced rate repayments to SJH instead, in which case we're not that different from how we were under Shepherd, certainly when you consider most of the loan was a long-term debt secured against season ticket sales from the expanded ground (i think over £50m of the £70m with the rest made up overdraft and other loans). Link to post Share on other sites More sharing options...
Mick Posted January 21, 2009 Share Posted January 21, 2009 Ashley has put £110 million of his own cash into the club to subsidise it, that's £106 million more than anybody else has ever put in. Link to post Share on other sites More sharing options...
Guest The Libertine Posted January 21, 2009 Share Posted January 21, 2009 So where has that money gone? could be the £10 million kinnear is talking about. would make sense now. Link to post Share on other sites More sharing options...
Dave Posted January 21, 2009 Share Posted January 21, 2009 Ashley has put £110 million of his own cash into the club to subsidise it, that's £106 million more than anybody else has ever put in. That's all well and good (and we're all very grateful for him doing so if one supposes we were getting pretty close to trouble), but it doesn't help the here and now on the pitch does it? How long will it excuse him of spending nothing on the first team? Link to post Share on other sites More sharing options...
quayside Posted January 21, 2009 Share Posted January 21, 2009 Just to be clear about the 20m, 17.5m of it is just accounting, its not real money that ashley has to transfer out of the sportsdirect coffers into northern rock, its just a reduction in the value of the playing staff. The real loss is 2.5m as far as i can tell. If you think about the amount of money that will be freed up when one of those asset values falls to zero, the financial picture is not that bleak. That's what I was getting at earlier, just didn't phrase it that well. So if the 'real' loss is £2.5m, are people justified in claiming Ashley should have spent more on the first team? It wasn't the real loss in cash terms. We went from owing £70 million at 30th June 2007 to owing £100 million at 30th June 2008, increasing to £110 million after that. If you forget amortisation (which is a perfectly good concept btw) and all that and just focus on Ashley's cash position it puts it into perspective. £30 million of extra cash was stuck into the business for the club to (at best) stand still. Link to post Share on other sites More sharing options...
Bad Mongo Posted January 21, 2009 Share Posted January 21, 2009 Yes it has, we might not be playing better but the personnel definitely has improved. Thats why i maintain that all we need is a good manager to pull it together. And I maintain that no, the squad has not improved, since the personnel isn't as balanced as it was, and since players reaching the end of their careers are getting older. We have replaced players without considering whether they would fit in. Jonas is an impressive player, but he creates nothing (he's got 3 assists, as many as Shola, James Milner has 5). Guthrie is fine if you consider he's young and cost very little, but he's also mediocre and creates nothing, and tends to go missing. Our midfield is worse than it was last year, and so are our strikers, since Viduka is no longer able to contribute anything. Link to post Share on other sites More sharing options...
Liam Liam Liam O Posted January 21, 2009 Share Posted January 21, 2009 Just to be clear about the 20m, 17.5m of it is just accounting, its not real money that ashley has to transfer out of the sportsdirect coffers into northern rock, its just a reduction in the value of the playing staff. The real loss is 2.5m as far as i can tell. If you think about the amount of money that will be freed up when one of those asset values falls to zero, the financial picture is not that bleak. That's what I was getting at earlier, just didn't phrase it that well. So if the 'real' loss is £2.5m, are people justified in claiming Ashley should have spent more on the first team? The thing is, both the profit & loss account & the cash flow are both produced as they are both relevant. The amortisation is ignored on the cashflow if that's a way of looking at performance, but then in there you'll find the £100m he's put in. Which is best? The cashflow pretty much identifies how the business has been funded since the takeover & puts to bed a lot of the myths about him not putting money in. It's also worth noting that the club had to pay over £4m in penalty interest for redeeming the loans that had to be settled on the takeover. That cost won't appear in future. Link to post Share on other sites More sharing options...
Dave Posted January 21, 2009 Share Posted January 21, 2009 Just to be clear about the 20m, 17.5m of it is just accounting, its not real money that ashley has to transfer out of the sportsdirect coffers into northern rock, its just a reduction in the value of the playing staff. The real loss is 2.5m as far as i can tell. If you think about the amount of money that will be freed up when one of those asset values falls to zero, the financial picture is not that bleak. That's what I was getting at earlier, just didn't phrase it that well. So if the 'real' loss is £2.5m, are people justified in claiming Ashley should have spent more on the first team? It wasn't the real loss in cash terms. We went from owing £70 million at 30th June 2007 to owing £100 million at 30th June 2008, increasing to £110 million after that. If you forget amortisation (which is a perfectly good concept btw) and all that and just focus on Ashley's cash position it puts it into perspective. £30 million of extra cash was stuck into the business for the club to (at best) stand still. Right. Cheers. Link to post Share on other sites More sharing options...
Liam Liam Liam O Posted January 21, 2009 Share Posted January 21, 2009 So where has that money gone? We'll find out in 12 months! This stuff is so exciting isn't it Link to post Share on other sites More sharing options...
johnnypd Posted January 21, 2009 Share Posted January 21, 2009 Just to be clear about the 20m, 17.5m of it is just accounting, its not real money that ashley has to transfer out of the sportsdirect coffers into northern rock, its just a reduction in the value of the playing staff. The real loss is 2.5m as far as i can tell. If you think about the amount of money that will be freed up when one of those asset values falls to zero, the financial picture is not that bleak. That's what I was getting at earlier, just didn't phrase it that well. So if the 'real' loss is £2.5m, are people justified in claiming Ashley should have spent more on the first team? It wasn't the real loss in cash terms. We went from owing £70 million at 30th June 2007 to owing £100 million at 30th June 2008, increasing to £110 million after that. If you forget amortisation (which is a perfectly good concept btw) and all that and just focus on Ashley's cash position it puts it into perspective. £30 million of extra cash was stuck into the business for the club to (at best) stand still. where do you think that's gone, considering wages only went up £5m and player trading only cost half a mil net? is it a case of one-off costs associated with the takeover or is the club just not being ran all that well? Link to post Share on other sites More sharing options...
Unbelievable Posted January 21, 2009 Share Posted January 21, 2009 Can the financial wizards answer this question: Amortisation being depreciation for intangible assets, does it not serve the purpose to retain profits (if any) to build funds to replace the assets? I.e. are we not purely talking about (for the main part) a paper loss that has very little relevance to the club's bank account and the availability of money for investment if any has been made available? Link to post Share on other sites More sharing options...
Guest neesy111 Posted January 21, 2009 Share Posted January 21, 2009 Ashley has put £110 million of his own cash into the club to subsidise it, that's £106 million more than anybody else has ever put in. That's all well and good (and we're all very grateful for him doing so if one supposes we were getting pretty close to trouble), but it doesn't help the here and now on the pitch does it? How long will it excuse him of spending nothing on the first team? but if he hadn't of put the money into the club would not exist as shepherd put in clause's so that the debt would be need to be repaid if a new owner takes charge he needs to put cash in for signings, but he should be expecting more from what the current team are doing as he is bankrolling their wages basically and no wonder why it's 1 in, 1 out policy we need a sound club behind the scene's before it can be successful on the pitch, the reverse happened at Leeds and look where they are now Link to post Share on other sites More sharing options...
Mick Posted January 21, 2009 Share Posted January 21, 2009 indeed. if the £6.6m was our last loan repayment then you'd assume we're going to make a profit this season (take away a couple of mil from reduced crowds/tho that might be offset with 3 yr ticket payments coming in, i dunno). of course Ashley might have arranged it that we make reduced rate repayments to SJH instead, in which case we're not that different from how we were under Shepherd, certainly when you consider most of the loan was a long-term debt secured against season ticket sales from the expanded ground (i think over £50m of the £70m with the rest made up overdraft and other loans). The gates are 5,000 down so the season ticket sales wouldn't have paid off the loan, the ground expansion cost £42 million. Link to post Share on other sites More sharing options...
Liam Liam Liam O Posted January 21, 2009 Share Posted January 21, 2009 Just to be clear about the 20m, 17.5m of it is just accounting, its not real money that ashley has to transfer out of the sportsdirect coffers into northern rock, its just a reduction in the value of the playing staff. The real loss is 2.5m as far as i can tell. If you think about the amount of money that will be freed up when one of those asset values falls to zero, the financial picture is not that bleak. That's what I was getting at earlier, just didn't phrase it that well. So if the 'real' loss is £2.5m, are people justified in claiming Ashley should have spent more on the first team? It wasn't the real loss in cash terms. We went from owing £70 million at 30th June 2007 to owing £100 million at 30th June 2008, increasing to £110 million after that. If you forget amortisation (which is a perfectly good concept btw) and all that and just focus on Ashley's cash position it puts it into perspective. £30 million of extra cash was stuck into the business for the club to (at best) stand still. where do you think that's gone, considering wages only went up £5m and player trading only cost half a mil net? is it a case of one-off costs associated with the takeover or is the club just not being ran all that well? £8m in interest payments for a start. Link to post Share on other sites More sharing options...
ChezGiven Posted January 21, 2009 Share Posted January 21, 2009 Another way of thinking about this is to look at the enterprise value of the club. This is the way an investor would look at any business with high debt and a strong business model. All you need to know is the total annual revenue, the total direct operational costs, excluding debt and amortisation. What do these figures look like? Link to post Share on other sites More sharing options...
johnnypd Posted January 21, 2009 Share Posted January 21, 2009 Ashley has put £110 million of his own cash into the club to subsidise it, that's £106 million more than anybody else has ever put in. That's all well and good (and we're all very grateful for him doing so if one supposes we were getting pretty close to trouble), but it doesn't help the here and now on the pitch does it? How long will it excuse him of spending nothing on the first team? but if he hadn't of put the money into the club would not exist as shepherd put in clause's so that the debt would be need to be repaid if a new owner takes charge he needs to put cash in for signings, but he should be expecting more from what the current team are doing as he is bankrolling their wages basically and no wonder why it's 1 in, 1 out policy we need a sound club behind the scene's before it can be successful on the pitch, the reverse happened at Leeds and look where they are now needing to repay the stadium debt in the event of the club being sold was highly publicised years before ashley came onto the scene. it's part of the cost of purchasingf the club and if ashley didnt know about it then he has only himself to blame as the info was freely available on websites like nufc finances. saying that, it seems he hasnt even paid that off, just switched our debt so that we owe him or his holding company. it is preferential as the rates may be lower, but then again they might not be. Link to post Share on other sites More sharing options...
fredbob Posted January 21, 2009 Share Posted January 21, 2009 Yes it has, we might not be playing better but the personnel definitely has improved. Thats why i maintain that all we need is a good manager to pull it together. And I maintain that no, the squad has not improved, since the personnel isn't as balanced as it was, and since players reaching the end of their careers are getting older. We have replaced players without considering whether they would fit in. Jonas is an impressive player, but he creates nothing (he's got 3 assists, as many as Shola, James Milner has 5). Guthrie is fine if you consider he's young and cost very little, but he's also mediocre and creates nothing, and tends to go missing. Our midfield is worse than it was last year, and so are our strikers, since Viduka is no longer able to contribute anything. Admittiedly the squad problems arent fully addressed, i havent claimed otherwise, although many had pointed out that this squad was cpaable offininishing top 8. My point is that only 11 players can win a game of football, and if you look at this years first choice 11, and compare it with any of its predeccessors of the last 4 years, then you can see that the squad has improved dramatically. Im not sure id agree with you saying our midfield is worse this year than last, Emre barely played last year and he is the only noticable absent from last years midfield. Our strongest run was with Barton, Butt and Geremi in the centre of midifeld. For what its worth, I personally rate Guthrie, so did Keegan. Id prefer having the cinsistenetly available Guthrie to the injury prone Emre. Link to post Share on other sites More sharing options...
Dave Posted January 21, 2009 Share Posted January 21, 2009 The thing that throws me about this amortisation thing is that the linear depreciation model just doesn't really work. If we buy a £15m player then it stands to reason that he must be pretty good, or at the very least pretty highly rated by the selling club/other potential buyers. If he's good then his value won't depreciate in a linear fashion - it might even go up - yet the amortisation 'cost' each year will make the accounts look shit. Link to post Share on other sites More sharing options...
Colos Short and Curlies Posted January 21, 2009 Share Posted January 21, 2009 Can the financial wizards answer this question: Amortisation being depreciation for intangible assets, does it not serve the purpose to retain profits (if any) to build funds to replace the assets? I.e. are we not purely talking about (for the main part) a paper loss that has very little relevance to the club's bank account and the availability of money for investment if any has been made available? At some point the money has been paid - the paper loss (i.e ammortisation) is just spreading it over a few years. Link to post Share on other sites More sharing options...
Guest neesy111 Posted January 21, 2009 Share Posted January 21, 2009 what needs to happen is that we need to stop putting managers on stupid wages and contracts it's cost this club 10 million to sack allardyce and souness in the last 3 years, that 10 million could have went on some players wages need to be brought down around 20-30 million which is achievable for getting rid of owen, duff, barton, butt, smith, viduka, geremi whom offer very little to the team once this happens the club can move forward Link to post Share on other sites More sharing options...
Mick Posted January 21, 2009 Share Posted January 21, 2009 That's all well and good (and we're all very grateful for him doing so if one supposes we were getting pretty close to trouble), but it doesn't help the here and now on the pitch does it? How long will it excuse him of spending nothing on the first team? As far as I'm concerned if we get a decent manager in then we'll start improving and that will generate cash in the way it did when Bobby took us up the league. The sooner the better for me. Link to post Share on other sites More sharing options...
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