Newcastle United Finances - 2008 Accounts Recently Filed

[Teasy]

Are you suggest that we're living hand to mouth paying the players wages?  Otherwise I'm not sure what you're getting at.

 

If that is what you're saying then how come we sold players for around £40 million in the period covered by these accounts yet only received £8 million in actual hard cash?  Those transfer fee's must be getting paid in pretty moderate to small instalments considering we're desperate for cash from creditors.

 

Also what's happened to the yearly revenue?  Which in these accounts is nearly £100 million, almost 50% higher then our wage bill.

[Mick]

Does Factoring necessarily mean immediate payment? I am sure we get Invoices from suppliers at work that are payable to factoring companies but they are still due in the normal 30 days credit period

 

The Company doing the factoring have to wait and are paid on normal credit terms, the 30 or 60 days that I mentioned but they pay us early, usually within 24 hours and that costs us 5 to 10% of the transaction value.

[Dave]

The company I work for flatly refuses to employ anyone who factors their payments.

[Mick]

Are you trying to suggest here that we're living hand to mouth paying the players wages?  Otherwise I'm not sure what you're getting at.

 

How come we sold players for around £40 million in the period covered by these accounts yet only recieved £8 million in actual hard cash?  If we're so desperate we'd have held out for more up front yes?

 

The factoring has only just started, maybe Ashley doesn't have the readies to keep ploughing in the £30 million that he had to in the last set of accounts.  It's all guess work where the money is going but the short termism of factoring suggests we have cash-flow problems.

[Robster]

Does Factoring necessarily mean immediate payment? I am sure we get Invoices from suppliers at work that are payable to factoring companies but they are still due in the normal 30 days credit period

 

The Company doing the factoring have to wait and are paid on normal credit terms, the 30 or 60 days that I mentioned but they pay us early, usually within 24 hours and that costs us 5 to 10% of the transaction value.

Ah that makes sense. Cheers Mick 

[Mick]

The company I work for flatly refuses to employ anyone who factors their payments.

 

I can understand that because of the reason most people have for using it.

[Mick]

Factoring can be used by growing companies who need the cash to expand, it's not all doom and gloom but I don't see how that would fit in with our situation.

[Robster]

Factoring can be used by growing companies who need the cash to expand, it's not all doom and gloom but I don't see how that would fit in with our situation.

Yeah. I guess there arent meany other (stable) multi-million pound companies that are factoring their payments.

[Zero]

Mick, I wanna ask the factoring was done BEFORE or AFTER the end of the transfer window?

 

[Teasy]

It certainly suggests a cash flow problem at the moment I suppose.  But not necessarily that we can't cover the costs long term.

 

Anyway the accounts from June 2008 to 2009 will be interesting.  I mean without having to pay Allardyce off and without the £8 million interest payment we really should be in profit before amortisation.  Especially with the profit made in the transfer market.

[Colos Short and Curlies]

It certainly suggests a cash flow problem I suppose.  But not necessarily that we can't cover the costs long term.  Next year's accounts will be interesting.  I mean without having to pay Allardye off and without the £8 million interest payment we should be in profit before amortisation.  Anyone see any reason to think otherwise?

 

If you think about who NUFC receive money from.

 

The Premier League

Sky/Setanta

Fans

 

That income is extremely lumpy in nature.

 

Now who do we pay out to

 

Players

Catering

Stewards

Other staff

 

Its relatively regular payments.

 

It makes sense to match the cashflows in (which the factoring may help with depending on how its structured) and I'm surprised more clubs don't do it.

 

(Just another perspective on WHY it may have been brought in)

[Colos Short and Curlies]

It certainly suggests a cash flow problem at the moment I suppose.  But not necessarily that we can't cover the costs long term.

 

Anyway the accounts from June 2008 to 2009 will be interesting.  I mean without having to pay Allardyce off and without the £8 million interest payment we really should be in profit before amortisation.  Especially with the profit made in the transfer market.

 

Ignore that bit - profit is stated before sales/purchases of players

[Mick]

Mick, I wanna ask the factoring was done BEFORE or AFTER the end of the transfer window?

 

 

It was the same day that I mentioned it on here, at least that's when I first noticed it.  It couldn't have happened over night so it must have been put in place before the transfer window closed.

[Mick]

 

If you think about who NUFC receive money from.

 

The Premier League

Sky/Setanta

Fans

 

That income is extremely lumpy in nature.

 

Now who do we pay out to

 

Players

Catering

Stewards

Other staff

 

Its relatively regular payments.

 

It makes sense to match the cashflows in (which the factoring may help with depending on how its structured) and I'm surprised more clubs don't do it.

 

(Just another perspective on WHY it may have been brought in)

 

I agree with that, the factoring is a bit like a short term loan in that we get money before it's due and we pay a fee for doing so.  And like you say the payments we receive are lumpy and generally fall during the closed season.

[Zero]

Mick, I wanna ask the factoring was done BEFORE or AFTER the end of the transfer window?

 

 

It was the same day that I mentioned it on here, at least that's when I first noticed it.  It couldn't have happened over night so it must have been put in place before the transfer window closed.

 

Yea I remember when you posted it.  I think the factoring might be related to the last ditch bid for Johnson/Veloso during the last day.  We didn't have the cash at that moment and so we factored some of the debt in order to generate cash for those transfers (though failed).  If that's the case our liquidity aren't that problematic.  However if that's really for paying wages we are in deep shit now. 

 

Thus I would be very interested to know if we did factor any more debts after the transfer window.  If we did, then we are really in a very bad position and it makes me wondor how could we really lodge bids for Johnson/Veloso during the last day.

[Guest Edd]

It certainly suggests a cash flow problem at the moment I suppose.  But not necessarily that we can't cover the costs long term.

 

Anyway the accounts from June 2008 to 2009 will be interesting.  I mean without having to pay Allardyce off and without the £8 million interest payment we really should be in profit before amortisation.  Especially with the profit made in the transfer market.

 

Keegan's compensation demands are allegedly higher than Fat Sams.

[Mick]

 

Yea I remember when you posted it.  I think the factoring might be related to the last ditch bid for Johnson/Veloso during the last day.  We didn't have the cash at that moment and so we factored some of the debt in order to generate cash for those transfers (though failed).  If that's the case our liquidity aren't that problematic.  However if that's really for paying wages we are in deep s*** now. 

 

Thus I would be very interested to know if we did factor any more debts after the transfer window.  If we did, then we are really in a very bad position and it makes me wondor how could we really lodge bids for Johnson/Veloso during the last day.

 

I would expect that we'll be factoring all of our income at a guess, transfer money in is a bit different as the income could be spread over a number of years.  And I doubt that will be included or if it was then the costs will be much greater or they might pay us a month or two before that income is due.

[Teasy]

It certainly suggests a cash flow problem at the moment I suppose.  But not necessarily that we can't cover the costs long term.

 

Anyway the accounts from June 2008 to 2009 will be interesting.  I mean without having to pay Allardyce off and without the £8 million interest payment we really should be in profit before amortisation.  Especially with the profit made in the transfer market.

 

Ignore that bit - profit is stated before sales/purchases of players

 

I know it won't be included in the normal profit/loss, because they use amortisation for that kind of thing.  I meant in terms of cash flow.  It just seems that we should have brought more money into the club then we've spent in the coming accounts.  Considering some of the one off costs that won't be there any more and the lesser money spent on players/more money brought in on players this time around.

[Teasy]

It certainly suggests a cash flow problem at the moment I suppose.  But not necessarily that we can't cover the costs long term.

 

Anyway the accounts from June 2008 to 2009 will be interesting.  I mean without having to pay Allardyce off and without the £8 million interest payment we really should be in profit before amortisation.  Especially with the profit made in the transfer market.

 

Keegan's compensation demands are allegedly higher than Fat Sams.

 

Yeah that had crossed my mind.  But at the current time they haven't been paid and may never be paid.  Lets hope so anyway.

[Mick]

 

Yeah that had crossed my mind.  But at the current time they haven't been paid and may never be paid.  Lets hope so anyway.

 

We still don't know how much Jonas is going to cost us, if anything.  We've got a few potential large holes in our finances so budgeting can't be that easy.

[quayside]

Its fair enough appreciating the Porsches, the 20 bed mansions and the holidays to the Seychelles bought on tick after you have had them. But to continue to want them despite knowing you cannot afford them is stupid. NE5, you can live in your millionaire's lifestyle mode, appreciate it all you want, but when you are broke you need to trim your cloth accordingly. No-one is disputing the good old days of the 1990's and early 2000's being fabulous. But if you do not have the money to carry on buying Moet you have to start buying Lambrusco.

 

We need to ourselves sorted out financially. Freddy and Sir John Hall bought the mansions, the Porsches and the fabulous holidays on tick, and have left Newcastle United in the s***. No-one else would have come in, looked at the books and bought this club, because others did before Ashley and walked away, probably pissing themselves laughing. Ashley was stupid enough not to complete due dilligence, but he has put money into the club to stop it going to the wall.

 

I want to know from someone who knows what they are talking about, Quayside or someone. How bad a situation financially are we in? Are we able to pay day to day running costs? Will the sales of Shay and N'Zogbia keep us going for a while? Do you think Mike Ashley will need someone else to come in and help out financially?

 

I don't think anyone can answer that because we don't know what the finances look like as of now, the only information we have is historical. But based on what we do know the club needed £30 million of new cash coming in just to survive during the year to 30 June. There was also a further £10 million put in shortly after 30 June.

 

How bad a situation that is depends on the extent to which Ashley is willing or is able to fund it. It is a question that should be put to him - if he'd answer it. I can't see anything that has happened since 30 June that would make the financial situation significantly better, if anything I would expect club income to be down (lower pie and pint sales, shirts, non season ticket seat sales etc).

 

I take your point about Ashley buying when others might not although at the time the financial world wasn't experiencing the carnage we are seeing now. I would say that in my opinion the club was not as much "damaged goods" as it is now, especially in terms of the perceived stability and competence of its stewardship. Others may disagree with that. But I would have thought with a bit of patience a more appropriate buyer could have been found by SJH.

 

 

[Guest fraser]

Its fair enough appreciating the Porsches, the 20 bed mansions and the holidays to the Seychelles bought on tick after you have had them. But to continue to want them despite knowing you cannot afford them is stupid. NE5, you can live in your millionaire's lifestyle mode, appreciate it all you want, but when you are broke you need to trim your cloth accordingly. No-one is disputing the good old days of the 1990's and early 2000's being fabulous. But if you do not have the money to carry on buying Moet you have to start buying Lambrusco.

 

We need to ourselves sorted out financially. Freddy and Sir John Hall bought the mansions, the Porsches and the fabulous holidays on tick, and have left Newcastle United in the s***. No-one else would have come in, looked at the books and bought this club, because others did before Ashley and walked away, probably pissing themselves laughing. Ashley was stupid enough not to complete due dilligence, but he has put money into the club to stop it going to the wall.

 

I want to know from someone who knows what they are talking about, Quayside or someone. How bad a situation financially are we in? Are we able to pay day to day running costs? Will the sales of Shay and N'Zogbia keep us going for a while? Do you think Mike Ashley will need someone else to come in and help out financially?

 

I don't think anyone can answer that because we don't know what the finances look like as of now, the only information we have is historical. But based on what we do know the club needed £30 million of new cash coming in just to survive during the year to 30 June. There was also a further £10 million put in shortly after 30 June.

 

How bad a situation that is depends on the extent to which Ashley is willing or is able to fund it. It is a question that should be put to him - if he'd answer it. I can't see anything that has happened since 30 June that would make the financial situation significantly better, if anything I would expect club income to be down (lower pie and pint sales, shirts, non season ticket seat sales etc).

 

I take your point about Ashley buying when others might not although at the time the financial world wasn't experiencing the carnage we are seeing now. I would say that in my opinion the club was not as much "damaged goods" as it is now, especially in terms of the perceived stability and competence of its stewardship. Others may disagree with that. But I would have thought with a bit of patience a more appropriate buyer could have been found by SJH.

 

 

 

This club is nowhere near going out of business. If Ashley refuses to put cash in (and won't borrow commercially) and the worst happens then it goes into administration, get docked points and get relegated. The value of Ashley's investment plummets and he gets fuck all.

 

So Ashley pays cash in, in order to protect his investment; he's no benefactor, he's the owner and will do whatever is necessary to protect his investment.

[quayside]

Its fair enough appreciating the Porsches, the 20 bed mansions and the holidays to the Seychelles bought on tick after you have had them. But to continue to want them despite knowing you cannot afford them is stupid. NE5, you can live in your millionaire's lifestyle mode, appreciate it all you want, but when you are broke you need to trim your cloth accordingly. No-one is disputing the good old days of the 1990's and early 2000's being fabulous. But if you do not have the money to carry on buying Moet you have to start buying Lambrusco.

 

We need to ourselves sorted out financially. Freddy and Sir John Hall bought the mansions, the Porsches and the fabulous holidays on tick, and have left Newcastle United in the s***. No-one else would have come in, looked at the books and bought this club, because others did before Ashley and walked away, probably pissing themselves laughing. Ashley was stupid enough not to complete due dilligence, but he has put money into the club to stop it going to the wall.

 

I want to know from someone who knows what they are talking about, Quayside or someone. How bad a situation financially are we in? Are we able to pay day to day running costs? Will the sales of Shay and N'Zogbia keep us going for a while? Do you think Mike Ashley will need someone else to come in and help out financially?

 

I don't think anyone can answer that because we don't know what the finances look like as of now, the only information we have is historical. But based on what we do know the club needed £30 million of new cash coming in just to survive during the year to 30 June. There was also a further £10 million put in shortly after 30 June.

 

How bad a situation that is depends on the extent to which Ashley is willing or is able to fund it. It is a question that should be put to him - if he'd answer it. I can't see anything that has happened since 30 June that would make the financial situation significantly better, if anything I would expect club income to be down (lower pie and pint sales, shirts, non season ticket seat sales etc).

 

I take your point about Ashley buying when others might not although at the time the financial world wasn't experiencing the carnage we are seeing now. I would say that in my opinion the club was not as much "damaged goods" as it is now, especially in terms of the perceived stability and competence of its stewardship. Others may disagree with that. But I would have thought with a bit of patience a more appropriate buyer could have been found by SJH.

 

 

 

This club is nowhere near going out of business. If Ashley refuses to put cash in (and won't borrow commercially) and the worst happens then it goes into administration, get docked points and get relegated. The value of Ashley's investment plummets and he gets f*** all.

 

So Ashley pays cash in, in order to protect his investment; he's no benefactor, he's the owner and will do whatever is necessary to protect his investment.

 

You obviously have a lot of information on Ashley's financial situation. How much of his wealth is tied up in non liquid investments and how much is in easily accessible cash that he can put into Newcastle United? He has demonstrated to Ernst and Young that he can keep us going for a little while yet, but that undertaking does not contain the word "indefinitely". 

[Guest fraser]

Its fair enough appreciating the Porsches, the 20 bed mansions and the holidays to the Seychelles bought on tick after you have had them. But to continue to want them despite knowing you cannot afford them is stupid. NE5, you can live in your millionaire's lifestyle mode, appreciate it all you want, but when you are broke you need to trim your cloth accordingly. No-one is disputing the good old days of the 1990's and early 2000's being fabulous. But if you do not have the money to carry on buying Moet you have to start buying Lambrusco.

 

We need to ourselves sorted out financially. Freddy and Sir John Hall bought the mansions, the Porsches and the fabulous holidays on tick, and have left Newcastle United in the s***. No-one else would have come in, looked at the books and bought this club, because others did before Ashley and walked away, probably pissing themselves laughing. Ashley was stupid enough not to complete due dilligence, but he has put money into the club to stop it going to the wall.

 

I want to know from someone who knows what they are talking about, Quayside or someone. How bad a situation financially are we in? Are we able to pay day to day running costs? Will the sales of Shay and N'Zogbia keep us going for a while? Do you think Mike Ashley will need someone else to come in and help out financially?

 

I don't think anyone can answer that because we don't know what the finances look like as of now, the only information we have is historical. But based on what we do know the club needed £30 million of new cash coming in just to survive during the year to 30 June. There was also a further £10 million put in shortly after 30 June.

 

How bad a situation that is depends on the extent to which Ashley is willing or is able to fund it. It is a question that should be put to him - if he'd answer it. I can't see anything that has happened since 30 June that would make the financial situation significantly better, if anything I would expect club income to be down (lower pie and pint sales, shirts, non season ticket seat sales etc).

 

I take your point about Ashley buying when others might not although at the time the financial world wasn't experiencing the carnage we are seeing now. I would say that in my opinion the club was not as much "damaged goods" as it is now, especially in terms of the perceived stability and competence of its stewardship. Others may disagree with that. But I would have thought with a bit of patience a more appropriate buyer could have been found by SJH.

 

 

 

This club is nowhere near going out of business. If Ashley refuses to put cash in (and won't borrow commercially) and the worst happens then it goes into administration, get docked points and get relegated. The value of Ashley's investment plummets and he gets f*** all.

 

So Ashley pays cash in, in order to protect his investment; he's no benefactor, he's the owner and will do whatever is necessary to protect his investment.

 

You obviously have a lot of information on Ashley's financial situation. How much of his wealth is tied up in non liquid investments and how much is in easily accessible cash that he can put into Newcastle United? He has demonstrated to Ernst and Young that he can keep us going for a little while yet, but that undertaking does not contain the word "indefinitely". 

 

I can understand your misgivings, HBOS demonstrated to KPMG their solvency; perhaps (and hopefully Ernst and Young is a tougher nut to crack) but Ashley is a businessman not an accountant and will not lose all of his investment.

 

And Sky 2010.

 

I did mention commercial borrowing as an alternative to his 'loans'.

[Mick]

 

I can understand your misgivings, HBOS demonstrated to KPMG their solvency; perhaps (and hopefully Ernst and Young is a tougher nut to crack) but Ashley is a businessman not an accountant and will not lose all of his investment.

 

And Sky 2010.

 

I did mention commercial borrowing as an alternative to his 'loans'.

 

Commercial borrowing was costing a fortune only a month ago and that's if you could get it.