Colos Short and Curlies Posted January 22, 2009 Share Posted January 22, 2009 Just trying to understand that. Does that mean the club will still be operating at a loss of £21 a season currently. And if so how the hell has that happened ? Even with the debt weren't we running at close to breaking even each season under FFS and that was after spending big cash on players ? You can probably knock £11m off the loss straight away as Sams pay off and Interest payable re the change of ownership were one off hits. Who knows what we'll be lumbered with this year Link to post Share on other sites More sharing options...
themanupstairs Posted January 22, 2009 Share Posted January 22, 2009 Just playing catch up on this thread now and I must say it makes for interesting reading. I think threads like this should be included in this thread. http://www.newcastle-online.org/nufcforum/index.php/topic,22334.0.html Much like that one Decky created as well with all of the news headlines. Yup Fantastic thread, with some very good debate going on. I'm no accountant, and nearly totally ignorant in finances in general. Have learned quite a bit on here. Cheers fellas Link to post Share on other sites More sharing options...
Guest ObaStar Posted January 22, 2009 Share Posted January 22, 2009 sorry just to be clear. we brought in 99 Million from, tv, tickets and sponsorship. then a further 10.8 from player sales. We lost 13 million on the day to day costs and interest on loans, 70 mill on debt repayments and then 31 on spending on assets. total out 114 Million. If we brought in 109 million how did we lose 21 million overall? Link to post Share on other sites More sharing options...
ToonTastic Posted January 22, 2009 Share Posted January 22, 2009 Wasnt the extra from the value of players changing ? Link to post Share on other sites More sharing options...
Dave Posted January 22, 2009 Share Posted January 22, 2009 If Ashley didn't do dilligence and had to spend all the money he had for improving the club on retiring debt and the wages of old crap players, that just makes him stupid, and means he paid too much for the club. It's hardly a reason to support the man. If the club really was about to go tits up he should have bought it for 1p and then he would have had plenty of money to spend fixing the problems. He's made a bad business decision, and now he's trying to get out of it with as little loss as possible. Why does that mean we should support him? Good question. Link to post Share on other sites More sharing options...
indi Posted January 22, 2009 Share Posted January 22, 2009 Whether people support him or not is up to them. Whether they make that decision based upon reality or fantasy is also up to them. This is simply a little bit of extra reality, people can take it or leave it. I suspect most will do the latter to be honest. Link to post Share on other sites More sharing options...
madras Posted January 22, 2009 Share Posted January 22, 2009 If Ashley didn't do dilligence and had to spend all the money he had for improving the club on retiring debt and the wages of old crap players, that just makes him stupid, and means he paid too much for the club. It's hardly a reason to support the man. If the club really was about to go tits up he should have bought it for 1p and then he would have had plenty of money to spend fixing the problems. He's made a bad business decision, and now he's trying to get out of it with as little loss as possible. Why does that mean we should support him? it doesn't mean we should support him, what it does is give us a little bit more of an understanding of where we were when he took over and the reasons for where we are today. there's an argument to be made that his lack of due dilligence was a good thing for us. Link to post Share on other sites More sharing options...
themanupstairs Posted January 22, 2009 Share Posted January 22, 2009 If Ashley didn't do dilligence and had to spend all the money he had for improving the club on retiring debt and the wages of old crap players, that just makes him stupid, and means he paid too much for the club. It's hardly a reason to support the man. If the club really was about to go tits up he should have bought it for 1p and then he would have had plenty of money to spend fixing the problems. He's made a bad business decision, and now he's trying to get out of it with as little loss as possible. Why does that mean we should support him? it doesn't mean we should support him, what it does is give us a little bit more of an understanding of where we were when he took over and the reasons for where we are today. there's an argument to be made that his lack of due dilligence was a good thing for us. Correct. You can look at this information from so many angles and come up with different views on it. Bit like Infocubes. Link to post Share on other sites More sharing options...
ChezGiven Posted January 22, 2009 Share Posted January 22, 2009 If Ashley didn't do dilligence and had to spend all the money he had for improving the club on retiring debt and the wages of old crap players, that just makes him stupid, and means he paid too much for the club. It's hardly a reason to support the man. If the club really was about to go tits up he should have bought it for 1p and then he would have had plenty of money to spend fixing the problems. He's made a bad business decision, and now he's trying to get out of it with as little loss as possible. Why does that mean we should support him? The price he paid for the club was based on the number of shares on the stock exchange x the price of the shares. That price was determined by investors with full visbility of the finances since we were a PLC. You're whole premise is flawed. Link to post Share on other sites More sharing options...
mrmojorisin75 Posted January 22, 2009 Share Posted January 22, 2009 i don't see that any of this matters to the immediate term personally, he either invests some more of his own money in the first team squad or takes the multi-million pound gamble that we go down and his investment turns to shit before his eyes sounds like a fucking stupid thing to say, i know, but at the end of the day the man is still a billionaire and i for one don't see why he can't rustle up another 20m to be spent on players of good age and on good deals until we can ship a heap of the high earners as mentioned before in the summer, and then continue a period of slow rebuilding until he can sell the club what he's opting for is a crazy gamble that imo will fail spectacularly, then what? will he spend money in div one to get us back up? will he fuck, he'll take the parachutes and see if joe can promote us on the cheap, and we all know how that will end sheff wed mk2 for me...not as dramatic as leeds due to us having no debt but i think we'll go down and struggle very, very badly for a number of years until someone else decides to take the crock of shit of his hands Link to post Share on other sites More sharing options...
ChezGiven Posted January 22, 2009 Share Posted January 22, 2009 i don't see that any of this matters Link to post Share on other sites More sharing options...
mrmojorisin75 Posted January 22, 2009 Share Posted January 22, 2009 i don't see that any of this matters good snippin that!! Link to post Share on other sites More sharing options...
Bad Mongo Posted January 22, 2009 Share Posted January 22, 2009 The price he paid for the club was based on the number of shares on the stock exchange x the price of the shares. That price was determined by investors with full visbility of the finances since we were a PLC. You're whole premise is flawed. What? The whole stockmarket was overpriced. Link to post Share on other sites More sharing options...
madras Posted January 22, 2009 Share Posted January 22, 2009 The price he paid for the club was based on the number of shares on the stock exchange x the price of the shares. That price was determined by investors with full visbility of the finances since we were a PLC. You're whole premise is flawed. What? The whole stockmarket was overpriced. the price was the price and any call of overpriced or underpriced is purely opinion. the value of something is always what someone will pay for it. Link to post Share on other sites More sharing options...
ChezGiven Posted January 22, 2009 Share Posted January 22, 2009 The price he paid for the club was based on the number of shares on the stock exchange x the price of the shares. That price was determined by investors with full visbility of the finances since we were a PLC. You're whole premise is flawed. What? The whole stockmarket was overpriced. No, parts of it were, where you had high P/E ratios, which was in sectors associated with housing, constructions, retail and finance. The stock price of some big companies has been steady since 06, since their business models dont rely on debt. A football club turning over 90m a year, with a value of 130m on the stock exchange gives a very low P/E. The NUFC stock price also discounted from its value the amount of debt it held. With base rates falling, as long as the banks continued to be creditors, the value of the club would probably not have changed that much. Link to post Share on other sites More sharing options...
Liam Liam Liam O Posted January 22, 2009 Share Posted January 22, 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? I posted this earlier, it's the best I can do given the time and information at my disposal. It just shows where the cash went under fairly broad headings. Cash flow in basic terms: Operating cash flow - £5 million (ie cash loss on day to day business) Finance servicing costs - £8 million (mostly interest on loans now paid off) Net capital spend - £21 million (net spending on assets, haven't had time to look closer yet!) Loan repayment - £70 million (obvious) Total out = £104 million This was financed by : Ashley £100 million Overdraft £4 million Total £104 million cheers. the £21m looks like the key figure. the debt repayment is switching to a more favourable lender (ashley), £8m no longer applies and as we wont be paying that we shouldnt really be making a loss. wonder what the £21m has been spent on, something to do with 'the system'? Players as well I thought players fee's were only included as assets which are then depreciated over the course of his contract? How can they also be included as a seperate cost? Or am I misunderstanding what you've just said there? Two seperate things. In the P&L the cost of players is spread over the length of the original contract - i.e Michael Owen 'costs' the club £4m each year in ammortisation. The £21m is physical cash outflow, i.e what has gone out of the bank. The cashflow shows what goes on during the year and is a factual statement - you can't hide a cash flow (even if you can ahem rename it to fit your business). With the P&L it can be manipulated (legally) to tell the story that the business wants the readers to read. It may well be that some costs have been accelerated this year rather than holding them back for future periods to show a bad picture this year and a vast improvement next (or vice versa (what ever happened to those btw?). Glad I checked before posting a reply, Cheers Link to post Share on other sites More sharing options...
TRon Posted January 22, 2009 Share Posted January 22, 2009 If Ashley didn't do dilligence and had to spend all the money he had for improving the club on retiring debt and the wages of old crap players, that just makes him stupid, and means he paid too much for the club. It's hardly a reason to support the man. If the club really was about to go tits up he should have bought it for 1p and then he would have had plenty of money to spend fixing the problems. He's made a bad business decision, and now he's trying to get out of it with as little loss as possible. Why does that mean we should support him? We don't have to support him, neither does he have to put any more of his own money into the club to keep fans happy, most of whom probably think he's a thieving Cockney cunt in any case. My hope is that he'll spend money just to safeguard his asset as a Premier League club. Link to post Share on other sites More sharing options...
Guest battyleespeed Posted January 22, 2009 Share Posted January 22, 2009 My hope is that he'll spend money just to safeguard his asset as a Premier League club. I'm sure JFK told him the same thing in no uncertain terms and that he is no stupid to see what is going to happen without serious investment in the playing staff. It could be that he has very little or no cash due to ongoing economic crisis and unable or unwilling to borrow 10-15m or so just to keep his toy going. It would explain why the club was so desperate to sell Geremi for 1.5m - amount which used to be just peanuts - and why Man City made such a low bid for Given (knowing that the club is cash starved and therefore unable to make a move in this transfer window). I'd like to think Ashley would be able to raise 10m or so to deal with this crisis which no doubt is generating him a great deal of bad publicity but there must be a somekind of cash-related crisis on back of this which is stopping him from doing so. Ashley might have the wealth but how much does he have cold hard cash in hand and is it needed in more critical functions? I know it sounds daft but if the situation is on hold because of lack of cash the club should sell Given ASAP to Man City for 4-5m or so they are offering and use that money and whatever pennies there are in the transfer kitty to get the 2-4 players JFK has in mind. There is a decent enough direct replacement in Harper and the new faces brough in would mean a huge difference between now and the end of the season. The squad morale is all screwed with almost all star players wanting to leave so getting in enough new players who are fresh and motivated could transform the team dynamics not only in the pitch but off-the-pitch as well. Link to post Share on other sites More sharing options...
Guest neesy111 Posted January 22, 2009 Share Posted January 22, 2009 My hope is that he'll spend money just to safeguard his asset as a Premier League club. I'm sure JFK told him the same thing in no uncertain terms and that he is no stupid to see what is going to happen without serious investment in the playing staff. It could be that he has very little or no cash due to ongoing economic crisis and unable or unwilling to borrow 10-15m or so just to keep his toy going. It would explain why the club was so desperate to sell Geremi for 1.5m - amount which used to be just peanuts - and why Man City made such a low bid for Given (knowing that the club is cash starved and therefore unable to make a move in this transfer window). I'd like to think Ashley would be able to raise 10m or so to deal with this crisis which no doubt is generating him a great deal of bad publicity but there must be a somekind of cash-related crisis on back of this which is stopping him from doing so. Ashley might have the wealth but how much does he have cold hard cash in hand and is it needed in more critical functions? I know it sounds daft but if the situation is on hold because of lack of cash the club should sell Given ASAP to Man City for 4-5m or so they are offering and use that money and whatever pennies there are in the transfer kitty to get the 2-4 players JFK has in mind. There is a decent enough direct replacement in Harper and the new faces brough in would mean a huge difference between now and the end of the season. The squad morale is all screwed with almost all star players wanting to leave so getting in enough new players who are fresh and motivated could transform the team dynamics not only in the pitch but off-the-pitch as well. that 1.5 million and his wages of 65k a week would be a 5 million profit over the year Link to post Share on other sites More sharing options...
quayside Posted January 22, 2009 Share Posted January 22, 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. Forgive my ignorance quayside. But that figure of 70 million that we owed, was that including the interest? If not, does it not mean that the figure would have been closer to the 100 million by the time the interest was paid? The £70 million excludes interest. Link to post Share on other sites More sharing options...
quayside Posted January 22, 2009 Share Posted January 22, 2009 And quayside were you the guy who ran http://www.nufc-finances.org.uk/ and if so will you update for this ? I have had a look through that website but am absolutely nothing to do with it. I think whoever it is who runs it does post on here sometimes though. Link to post Share on other sites More sharing options...
madras Posted January 22, 2009 Share Posted January 22, 2009 And quayside were you the guy who ran http://www.nufc-finances.org.uk/ and if so will you update for this ? I have had a look through that website but am absolutely nothing to do with it. I think whoever it is who runs it does post on here sometimes though. was it macbeth ? i think he used to run an nufc finances site. Link to post Share on other sites More sharing options...
ChezGiven Posted January 22, 2009 Share Posted January 22, 2009 And quayside were you the guy who ran http://www.nufc-finances.org.uk/ and if so will you update for this ? I have had a look through that website but am absolutely nothing to do with it. I think whoever it is who runs it does post on here sometimes though. was it macbeth ? i think he used to run an nufc finances site. Macbeth, yep. Committed regicide by killing King McKeag after the prophecies of witches John, Douglas and Frederick. Racked with guilt ever since, the website could never wipe the spots of blood from his hands. Link to post Share on other sites More sharing options...
ToonTastic Posted January 22, 2009 Share Posted January 22, 2009 Where did you find the information about the finances just I've not seen them mentioned on any other site ? Link to post Share on other sites More sharing options...
quayside Posted January 22, 2009 Share Posted January 22, 2009 Where did you find the information about the finances just I've not seen them mentioned on any other site ? The full group accounts were filed at Companies House this week. They are now in the public domain. You can access them on the Companies House website - pay £1 and down load them. Link to post Share on other sites More sharing options...
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