Newcastle United Finances - 2008 Accounts Recently Filed

[Guest neesy111]

Leeds went to sh*t after Ridsdale left. I wonder if all the Leeds fans want him back because he spent massive money and lead them to the Champions League, great European cup runs, etc?

 

Difference is, whereas Leeds couldn't find anyone to stop their crippling debts and had to sell players on the cheap, we've had someone come in who's helped balance the books as best as we could have hoped, and hasn't had to resort to selling players at cut-prices.

 

Quite the opposite in fact

 

problem is we've kept the wrong players

[Optimistic Nut]

Leeds went to sh*t after Ridsdale left. I wonder if all the Leeds fans want him back because he spent massive money and lead them to the Champions League, great European cup runs, etc?

 

Difference is, whereas Leeds couldn't find anyone to stop their crippling debts and had to sell players on the cheap, we've had someone come in who's helped balance the books as best as we could have hoped, and hasn't had to resort to selling players at cut-prices.

 

Quite the opposite in fact

 

Exactly my point. We somehow robbed West Ham of £14m for Dyer & Parker, got £12m for Milner, made slight profits or our money back on Rozehnal & Faye. Leeds ended up selling Woodgate to us on the cheap, Keane to Spurs, Kewell to Liverpool, etc. for far less than their real values.

[Liam Liam Liam O]

Leeds went to sh*t after Ridsdale left. I wonder if all the Leeds fans want him back because he spent massive money and lead them to the Champions League, great European cup runs, etc?

 

Difference is, whereas Leeds couldn't find anyone to stop their crippling debts and had to sell players on the cheap, we've had someone come in who's helped balance the books as best as we could have hoped, and hasn't had to resort to selling players at cut-prices.

 

Quite the opposite in fact

 

problem is we've kept the wrong players

 

Problem is you can only sell the ones other teams want to buy.

[johnnypd]

Leeds went to sh*t after Ridsdale left. I wonder if all the Leeds fans want him back because he spent massive money and lead them to the Champions League, great European cup runs, etc?

 

Difference is, whereas Leeds couldn't find anyone to stop their crippling debts and had to sell players on the cheap, we've had someone come in who's helped balance the books as best as we could have hoped, and hasn't had to resort to selling players at cut-prices.

 

i dont think we were heading in the Leeds direction tbh. Shepherd was said to have financiers lined up anyway but not sure how 'real' they ever were, and was also going down the route of drawing up a property scheme for the land surrounding SJP (leazes carpark, gallowgate carpark, old supporter's club on barrack road) which wouldve given us a cash injection had he been able to work something up in a reasonable timeframe. that's not really viable now with the stagnant property market.

[johnnypd]

 

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.

 

 

He's paid the debt off. 

 

as a loan

 

As opposed to doing what?  Genuine question.

 

as opposed to 'putting his hand in his pocket to pay off the debt' something for which most on here praised him. for over a year. probably repeated a thousand times over. people thought that, dont try and reinvent the past to make it look like everyone thought it was a loan from the start. im not criticising Ashley for it but at the same time im not going to praise him as, thus far, we've not had the knock-on effect of the money freed up being used to make us better.

 

So how would you account for it in the accounts?

 

Putting his hand in his pocket is exactly what he has done.  He's taken £100m from his bank & cleared the clubs debt with the loan holders.

 

okay, maybe we should call it 'putting his hand in his pocket on the condition that he gets back at least the amount he took out of his pocket.' people on here seemed to think of it as a donation, not what it actually is.

 

anyway, afk, donating to Oxfam on the condition that they give me all my money back in 4 years.

 

You really don't get it, do you!?!

 

If he "gives" the club the money, the value of the club goes up by that amount.

 

If he "loans" the club the money, the value of the club stays the same and so does the debt.

 

It equates to the same thing.

 

If he sells the club he gets money for it, be that through an increased sale price or through repayment of debt, or are you hoping he'll give it away?

 

when did i suggest he give it away? as said numerous times, im not criticising ashley for that, but neither am i going to praise him for it. is it that hard to understand?

 

Yes, the club's value does go up, but no, not by the exact amount of the loan repayment, as Chez has pointed out numerous times over before. a better calculation would be how avoiding repayments boosts our cash flow and how that consequently raises the value of the club. Similarly, the value of the club could drop (in the event of relegation or a crap tv deal in the next few years, for instance) in which case the 'gifted' money would be wiped out as an investment, with no guarantee of recovery. in the case of a loan neither of those two things are true- the loan amount is a concrete sum to be paid upfront or with a new loan in the case of selling the club and even if the value of the club drops for some reason, the loan is still secure. It remains to be seen how the club plan to repay the loan, in the case of a planned sale not materialising in the past few weeks, it would not suprise me to see some repayment schedule drawn up, in which case we'd be back where we started.

[WhatTheFunk]

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?

[indi]

Leeds went to sh*t after Ridsdale left. I wonder if all the Leeds fans want him back because he spent massive money and lead them to the Champions League, great European cup runs, etc?

 

Difference is, whereas Leeds couldn't find anyone to stop their crippling debts and had to sell players on the cheap, we've had someone come in who's helped balance the books as best as we could have hoped, and hasn't had to resort to selling players at cut-prices.

 

i dont think we were heading in the Leeds direction tbh. Shepherd was said to have financiers lined up anyway but not sure how 'real' they ever were, and was also going down the route of drawing up a property scheme for the land surrounding SJP (leazes carpark, gallowgate carpark, old supporter's club on barrack road) which wouldve given us a cash injection had he been able to work something up in a reasonable timeframe. that's not really viable now with the stagnant property market.

 

His cunning plan to dig us out of the debt he'd got us into was to rely on property investment, which he'd probably have partially put into motion by now and would have left us even more financially screwed than we already were. Your last sentence is the most important and shows that we've seriously dodged a bullet there. Not only could we have been in huge debt from the [mis]management of the football club, we could have had a whole load of sour property investments to boot. And you think Shep gets a bad press compared to Ashley!?!

[johnnypd]

Leeds went to sh*t after Ridsdale left. I wonder if all the Leeds fans want him back because he spent massive money and lead them to the Champions League, great European cup runs, etc?

 

Difference is, whereas Leeds couldn't find anyone to stop their crippling debts and had to sell players on the cheap, we've had someone come in who's helped balance the books as best as we could have hoped, and hasn't had to resort to selling players at cut-prices.

 

i dont think we were heading in the Leeds direction tbh. Shepherd was said to have financiers lined up anyway but not sure how 'real' they ever were, and was also going down the route of drawing up a property scheme for the land surrounding SJP (leazes carpark, gallowgate carpark, old supporter's club on barrack road) which wouldve given us a cash injection had he been able to work something up in a reasonable timeframe. that's not really viable now with the stagnant property market.

 

His cunning plan to dig us out of the debt he'd got us into was to rely on property investment, which he'd probably have partially put into motion by now and would have left us even more financially screwed than we already were. Your last sentence is the most important and shows that we've seriously dodged a bullet there. Not only could we have been in huge debt from the [mis]management of the football club, we could have had a whole load of sour property investments to boot. And you think Shep gets a bad press compared to Ashley!?!

 

no, i'm not a Shepherd defender. hate this thing about trying to turn it into shepherd vs ashley.

 

really depends how quickly shepherd got round to sorting it out, the scheme was in the consultancy stage with ncc before he sold up. other schemes in the immediate area (time central, wellbar house, Downing) havent really been adversely effected by the downturn because financing and planning was sorted out before summer 2008.

[indi]

 

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.

 

 

He's paid the debt off. 

 

as a loan

 

As opposed to doing what?  Genuine question.

 

as opposed to 'putting his hand in his pocket to pay off the debt' something for which most on here praised him. for over a year. probably repeated a thousand times over. people thought that, dont try and reinvent the past to make it look like everyone thought it was a loan from the start. im not criticising Ashley for it but at the same time im not going to praise him as, thus far, we've not had the knock-on effect of the money freed up being used to make us better.

 

So how would you account for it in the accounts?

 

Putting his hand in his pocket is exactly what he has done.  He's taken £100m from his bank & cleared the clubs debt with the loan holders.

 

okay, maybe we should call it 'putting his hand in his pocket on the condition that he gets back at least the amount he took out of his pocket.' people on here seemed to think of it as a donation, not what it actually is.

 

anyway, afk, donating to Oxfam on the condition that they give me all my money back in 4 years.

 

You really don't get it, do you!?!

 

If he "gives" the club the money, the value of the club goes up by that amount.

 

If he "loans" the club the money, the value of the club stays the same and so does the debt.

 

It equates to the same thing.

 

If he sells the club he gets money for it, be that through an increased sale price or through repayment of debt, or are you hoping he'll give it away?

 

when did i suggest he give it away? as said numerous times, im not criticising ashley for that, but neither am i going to praise him for it. is it that hard to understand?

 

Yes, the club's value does go up, but no, not by the exact amount of the loan repayment, as Chez has pointed out numerous times over before. a better calculation would be how avoiding repayments boosts our cash flow and how that consequently raises the value of the club. Similarly, the value of the club could drop (in the event of relegation or a crap tv deal in the next few years, for instance) in which case the 'gifted' money would be wiped out as an investment, with no guarantee of recovery. in the case of a loan neither of those two things are true- the loan amount is a concrete sum to be paid upfront or with a new loan in the case of selling the club and even if the value of the club drops for some reason, the loan is still secure. It remains to be seen how the club plan to repay the loan, in the case of a planned sale not materialising in the past few weeks, it would not suprise me to see some repayment schedule drawn up, in which case we'd be back where we started.

 

You have a funny way of not criticising someone.

 

The fact of the matter is he has paid off the loans to people external of himself. He owns the club, he owns the holding company, so he owes himself money. By paying off the loans he was always going to increase the value of his investment in some way, he couldn't help that even if he wanted to.

 

If the value of the club drops it will be worth less whether he's gifted the money to it or not, so if he then sells it he'll still get back less money regardless, loan or not, it's totally irrelevant to anything.

 

Businesses default on loans and other debts all the time, that's why they go bankrupt, if the money's not there it's not there, just because it's down as a loan in the books doesn't mean he's definitely getting it back.

 

A repayment schedule!?! You realise that for that to be of any benefit to him the club would need to be making money, it isn't, so he'd be taking from one pocket to give to the other and as both pockets are his, he'd be no better off?

[Teasy]

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.

 

Forget how many assists Milner has this season in a top 4 side, how many did he get for us!

[Baggio]

What really does worry me btw is next season (that's IF we stay up this). We have Owen, Viduka, Harper, Butt, Cacapa, Edgar and a shitload of youngsters leaving for nothing as things stand. No money to replace them without selling others.

 

Given that the only real way to make decent money is to reach the upper echelons of the Premier League, does this mean we are now destined to just sit and try keep our head above water by bringing in youngsters and selling them when they show promise to pay for the next batch?

 

Once Owen, Viduka and their like are off the wagebill the club will start generating a profit allowing us to consolidate slowly. Theoretically, after a few years of that we can just pick a moment to take a bit of financial risk to pull us up the table. (The "Villa model" so to speak)

 

Until we get all the wasters off the wagebill though, it does indeed look like we're just going to have to struggle to keep our head above the water and stay in the Premiership.

 

One thing's for sure: the age of "ambitious/insane" Shepherd-level spending is over. Forever.

 

 

 

All of the players brought in will have to be on "sensible" wages therefore won't be top notch. This again puts pressure on the scouting/recruitment to find Bassongs more often than not.

 

Again I'd advocate a mixed approach - if we stay up we shouldn't give up the idea of having a couple/a few well paid players.

 

 

 

Yet other clubs outside the top 4 manage to attract quality players without paying daft wages, funny that.

 

What I think the problem is at the moment is players seem happy to accept £40,000 a week at the likes of Villa, Spurs and Everton but would look for more here when they see squad players picking up £60,000 plus.

 

As for the clubs finances, hopefully it will shut up the people who think all of their money is going straight into his back pocket, as it says on the nufcfinances website Ashley has done the easy thing by coming in and paying off the debts (try not to cry, Johhny) but turning the clubs finances around is going to take a lot longer.

[Teasy]

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?

[johnnypd]

What really does worry me btw is next season (that's IF we stay up this). We have Owen, Viduka, Harper, Butt, Cacapa, Edgar and a shitload of youngsters leaving for nothing as things stand. No money to replace them without selling others.

 

Given that the only real way to make decent money is to reach the upper echelons of the Premier League, does this mean we are now destined to just sit and try keep our head above water by bringing in youngsters and selling them when they show promise to pay for the next batch?

 

Once Owen, Viduka and their like are off the wagebill the club will start generating a profit allowing us to consolidate slowly. Theoretically, after a few years of that we can just pick a moment to take a bit of financial risk to pull us up the table. (The "Villa model" so to speak)

 

Until we get all the wasters off the wagebill though, it does indeed look like we're just going to have to struggle to keep our head above the water and stay in the Premiership.

 

One thing's for sure: the age of "ambitious/insane" Shepherd-level spending is over. Forever.

 

 

 

All of the players brought in will have to be on "sensible" wages therefore won't be top notch. This again puts pressure on the scouting/recruitment to find Bassongs more often than not.

 

Again I'd advocate a mixed approach - if we stay up we shouldn't give up the idea of having a couple/a few well paid players.

 

 

 

Yet other clubs outside the top 4 manage to attract quality players without paying daft wages, funny that.

 

What I think the problem is at the moment is players seem happy to accept £40,000 a week at the likes of Villa, Spurs and Everton but would look for more here when they see squad players picking up £60,000 plus.

 

As for the clubs finances, hopefully it will shut up the people who think all of their money is going straight into his back pocket, as it says on the nufcfinances website Ashley has done the easy thing by coming in and paying off the debts (try not to cry, Johhny) but turning the clubs finances around is going to take a lot longer.

 

do you think Ashley should spend in this window? say, £20m to get some essential players in. because it will be a lot harder to 'turn the clubs finances around' in the Championship. if we buy and go down, we can sell those players and recoup the money so wed basically be in the same situation as if we'd not spent and gone down. but not strengthening substantially makes it more likely we'll get relegated.

[Mick]

 

do you think Ashley should spend in this window? say, £20m to get some essential players in. because it will be a lot harder to 'turn the clubs finances around' in the Championship. if we buy and go down, we can sell those players and recoup the money so wed basically be in the same situation as if we'd not spent and gone down. but not strengthening substantially makes it more likely we'll get relegated.

 

I would love Ashley to spend £20 million, £40 million or even £60 million.  We don't know how much cash he's got at his disposal because his personal wealth could all be tied up in assests, the club and the loan could be a large chunk of his wealth.

 

He also owns around 70% of the shares in SD so that will account for another large chunk of his personal wealth.

[johnnypd]

 

do you think Ashley should spend in this window? say, £20m to get some essential players in. because it will be a lot harder to 'turn the clubs finances around' in the Championship. if we buy and go down, we can sell those players and recoup the money so wed basically be in the same situation as if we'd not spent and gone down. but not strengthening substantially makes it more likely we'll get relegated.

 

I would love Ashley to spend £20 million, £40 million or even £60 million.  We don't know how much cash he's got at his disposal because his personal wealth could all be tied up in assests, the club and the loan could be a large chunk of his wealth.

 

He also owns around 70% so that will account for another large chunk of his personal wealth.

 

we're in the shit situation where through mismanagement (for whatever reason) and under investment (ditto) we have to strengthen. it's a risk but the risk of not strengthening is bigger.

[Mick]

 

we're in the s*** situation where through mismanagement (for whatever reason) and under investment (ditto) we have strengthen. it's a risk but the risk of not strengthening is bigger.

 

I can see both sides of the argument and I think few people think we're not in the shit so most will agree with that.  If we knew for certain that we were going down then a gamble would be easier, as it is we could easily spend and make matters worse.

 

I personally don't think we'll go down but it is a possibility, I just hope we survive and take stock of our situation in the summer and move on with a better manager than we currently have.

[Baggio]

What really does worry me btw is next season (that's IF we stay up this). We have Owen, Viduka, Harper, Butt, Cacapa, Edgar and a shitload of youngsters leaving for nothing as things stand. No money to replace them without selling others.

 

Given that the only real way to make decent money is to reach the upper echelons of the Premier League, does this mean we are now destined to just sit and try keep our head above water by bringing in youngsters and selling them when they show promise to pay for the next batch?

 

Once Owen, Viduka and their like are off the wagebill the club will start generating a profit allowing us to consolidate slowly. Theoretically, after a few years of that we can just pick a moment to take a bit of financial risk to pull us up the table. (The "Villa model" so to speak)

 

Until we get all the wasters off the wagebill though, it does indeed look like we're just going to have to struggle to keep our head above the water and stay in the Premiership.

 

One thing's for sure: the age of "ambitious/insane" Shepherd-level spending is over. Forever.

 

 

 

All of the players brought in will have to be on "sensible" wages therefore won't be top notch. This again puts pressure on the scouting/recruitment to find Bassongs more often than not.

 

Again I'd advocate a mixed approach - if we stay up we shouldn't give up the idea of having a couple/a few well paid players.

 

 

 

Yet other clubs outside the top 4 manage to attract quality players without paying daft wages, funny that.

 

What I think the problem is at the moment is players seem happy to accept £40,000 a week at the likes of Villa, Spurs and Everton but would look for more here when they see squad players picking up £60,000 plus.

 

As for the clubs finances, hopefully it will shut up the people who think all of their money is going straight into his back pocket, as it says on the nufcfinances website Ashley has done the easy thing by coming in and paying off the debts (try not to cry, Johhny) but turning the clubs finances around is going to take a lot longer.

 

do you think Ashley should spend in this window? say, £20m to get some essential players in. because it will be a lot harder to 'turn the clubs finances around' in the Championship. if we buy and go down, we can sell those players and recoup the money so wed basically be in the same situation as if we'd not spent and gone down. but not strengthening substantially makes it more likely we'll get relegated.

 

I'd like him to bring new players in and I don't really care what they cost, I've never been the sort who demands to be appeased by net spend.

 

I just hope these accounts are an eye opener to the fans who are ready to jump ship because we're going through some tough times while he attempts to turn us around.

 

[EthiGeordie]

Net spend of 5 K lol....

[Offshore]

As someone who normally can't make head nor tail of his BT phone bill, a big thanks to all who've put the figures into laymans terms.

 

The global recession has hit the banking sector hard, they're cutting back lending across the board. I don't imagine any special case would be made for football over any other business, so it probably follows that the days of bank guarantees to a club who wants to spend way more than they take in based on an estimated and increasing yearly income will be over or at least severely curtailled for the average club.

 

From a financial viewpoint only then, other than those very few clubs who don't have to worry about their spending or debt - Man City (owner) and the established top 4 who are near enough guaranteed good revenues from the Champion league then i'd say, without seeing the other clubs figures obviously, that we're probably in a healthier state than most clubs.

 

 

[Guest Dev]

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?

[rocksammy]

wasn't there a load of transfer fees we hadn't paid when ashely came in. Im sure that comes into it somewhere.

[ToonTastic]

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 ?

[Tooj]

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.

[ToonTastic]

And quayside were you the guy who ran http://www.nufc-finances.org.uk/ and if so will you update for this ?

[Colos Short and Curlies]

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?).