Sports Direct

[Taylor Swift]

 

 

You're not paying anything. This isn't rocket science, man. He's paying himself money to advertise his own s***. Money from left pocket moving to right pocket. There is no 'us', no 'we'. He owns the club; 100% of it. Whatever he pays to himself (or doesn't pay) is irrelevant to the sustainability of the club.

 

And there is no 'our'. He owns the stadium as well.

 

This isn't rocket science either, fans pay money into a football club expecting it to be spent on the football club.  Llambias keeps banging on about the money Ashley has invested in the club, he wouldn't have had to invest as much if we'd been paid the going rate for the advertising that we've paid for.

 

And whatever you are paying is being spent on the football club. Well, as much as the tight-fisted bastard is willing to spend, anyway.

 

But this advertising stuff is nonsense. It has nothing to do with the sustainability of the club. It has nothing to do with whether we're able to afford players. If we would normally get £100k from that advertising space then in the long run, the club will benefit because it is revenue and cash flow that haven't been utilised and spent. But since he owns 100% of the club at this moment of time, the club's books - beyond the fundamentals to do with the running of the club, like the wage bill and tv money - are meaningless.

 

If he were to give himself a consulting fee of £100m next year, would that have any effect on what happens with the football side of things? Do you think we would spend less on transfers or wages? Like I said, it's moving money from his left pocket to his right. It has nothing to do with whether we're able to fork out £10m for N'Zogbia.

 

Another example: next year the club gets £100m for the advertising from SD. Do you think we would spend £50m on players? Of course not. It's his money, his club, his company.

 

Say you have two houses with £50k of cash in each. Now you move £50k from house A to house B. Would you suddenly say 'oh shit, house B has so much spare cash now, I might want to get myself a new flat screen tv'. Of course not. The value of your total assets is still the same, only the individual pieces have different values. It's like the club and SD. Move £100m from SD to the club. Does it make Ashley richer, and thus able to fund £50m on transfers for the club? No, because in the end it is he who has to spend the money, not the club.

[BottledDog]

 

What year is this regarding?

 

That was from the 2009 accounts, we've had another set published since but I can't remember seeing any mention of money in or out for the advertising in the latest set of accounts.

 

So, in 2008/9 that won't refer to the naming rights, big fuck off sign then? We just don't know yet what money SD might/might not be paying.

[Taylor Swift]

Why don't we just have 100% free Sports Direct advertising if it makes no difference financially then Pip? What a silly thing to say.

 

If it was worth it for Sports Direct (and thus worth it to Ashley), then he would do it. If it was worth the exposure for Sports Direct to spend £5m to get their name on a football team's shirt, then you would see it happen and you would see that it wouldn't be paid, because it makes business sense to make SD profitable (because it leads to a higher share price). Ashley's a tight git so I don't see him turning down £5m from another company. It's not his MO to spend lavishly on advertising and marketing.

 

It makes no difference to the club's financial viability. It makes a difference financially to Ashley. The key is that the club, which means him since he owns 100% of it, is getting £5m a year from another company. This is no longer moving money from his left pocket to his right. This is money from someone else's pocket into his own, and a lot of money too. If it was something negligible like £100k then I have no doubt that we'd see SD in the advertising space.

[Mick]

 

And whatever you are paying is being spent on the football club. Well, as much as the tight-fisted b****** is willing to spend, anyway.

 

But this advertising stuff is nonsense. It has nothing to do with the sustainability of the club. It has nothing to do with whether we're able to afford players. If we would normally get £100k from that advertising space then in the long run, the club will benefit because it is revenue and cash flow that haven't been utilised and spent. But since he owns 100% of the club at this moment of time, the club's books - beyond the fundamentals to do with the running of the club, like the wage bill and tv money - are meaningless.

 

If he were to give himself a consulting fee of £100m next year, would that have any effect on what happens with the football side of things? Do you think we would spend less on transfers or wages? Like I said, it's moving money from his left pocket to his right. It has nothing to do with whether we're able to fork out £10m for N'Zogbia.

 

Another example: next year the club gets £100m for the advertising from SD. Do you think we would spend £50m on players? Of course not. It's his money, his club, his company.

 

Say you have two houses with £50k of cash in each. Now you move £50k from house A to house B. Would you suddenly say 'oh s***, house B has so much spare cash now, I might want to get myself a new flat screen tv'. Of course not. The value of your total assets is still the same, only the individual pieces have different values. It's like the club and SD. Move £100m from SD to the club. Does it make Ashley richer, and thus able to fund £50m on transfers for the club? No, because in the end it is he who has to spend the money, not the club.

 

The advertising stuff isn't nonsense while we're using incoming transfer fees to pay for upgrades to the training facilities and claiming we've spent 35 million on free transfers.  Also, 100k is way short of what we'd get from a third party as SD get more advertising than anybody else apart from it not being on the shirt and NR and Puma pay millions.

[Dave]

I still wouldn't like the ugly fucking things even if we were pulling in a load of outside investment tbh. The fact that it appears this isn't the case is just rubbing salt into the wounds.

 

Oh, and if any such money would be meaningless anyway, why did the club go to such length to assure us that is was simply a temporary measure intended to attract said investment?

 

It's fucking ugly and spoils our beautiful stadium. Ashley knows this.

[Taylor Swift]

 

That was a horrible example I've edited it so it makes more sense but I'm not sure if it makes perfect sense.

 

It's an example to show that the debt thing is meaningless. Whoever buys the club will actually have to pay £xm. Whether that x is straight cash to Ashley or 50% cash and the rest as debt owed to Ashley that the club (and therefore the new owner) assumes when they buy the club.

 

I understand what you're saying, it just isn't relevant to our day to day running and how we could put potential advertising income to good use now.

 

But there is no distinction between the club and Ashley. There is no 'we' the club. The club is, like it or not, Ashley's. Money into the club, money out of the club is money into Ashley's pocket, money out of Ashley's pocket. When we're sold, the new buyer will consider our future cash flow (included advertising which isn't being paid for), sum it, discount it, and pay. Our day to day running, at this moment of time, isn't affected in the least by any advertising we do for Ashley or Sports Direct.

 

Last example: You own a company, and you own a car (that is in your name). If you start sticking advertising on your car for your company, does it matter whether your company pays you for the advertising? It doesn't, because it's moving money from one pocket to another. Leaving aside tax reasons, there would be no logic in doing it.

 

The curious thing is that he only owns something like 70% of Sports Direct, so it actually makes more sense to shift money from there into the club, since it's shifting 70% of his money + 30% of other people's into something that is 100% of his. But SD's shares increase a lot more when they're profitable, and an increase in the share price is worth hundreds of millions of pounds to Ashley, so it makes business sense to shift money the other way around.

[Ryan_Taylor]

Someone tell me if my understanding of this is correct.

 

Mike Ashley, in the guise of Sports Direct.com's majority shareholder pays Mike Ashley as Owner of St James' Holdings £42K a year to write 'I am a bellend' wherever he pleases on SJP. Instead of selling the advertising space to some Arab airline for a wedge?

[Taylor Swift]

I still wouldn't like the ugly fucking things even if we were pulling in a load of outside investment tbh. The fact that it appears this isn't the case is just rubbing salt into the wounds.

 

Oh, and if any such money would be meaningless anyway, why did the club go to such length to assure us that is was simply a temporary measure intended to attract said investment?

 

It's fucking ugly and spoils our beautiful stadium. Ashley knows this.

 

I agree. I'm just trying to explain his reason for doing things, which has a lot of logic behind it. It makes sense to him, and it's irrelevant to us (the fans).

 

How is it rubbing salt into the wounds? Do you benefit if Ashley is richer or poorer? It would be rubbing salt into the wounds, and it would affect you - and us, the fans - directly if they raised ticket prices based on the fact that we don't have enough revenue. That would make this whole advertising thing matter. At the moment, it's meaningless.

 

And the club went to such lengths because they knew what the reaction would be. Have they mentioned it since? No, because people don't care unless they're asked about it/the topic comes up.

[Interpolic]

 

That was a horrible example I've edited it so it makes more sense but I'm not sure if it makes perfect sense.

 

It's an example to show that the debt thing is meaningless. Whoever buys the club will actually have to pay £xm. Whether that x is straight cash to Ashley or 50% cash and the rest as debt owed to Ashley that the club (and therefore the new owner) assumes when they buy the club.

 

I understand what you're saying, it just isn't relevant to our day to day running and how we could put potential advertising income to good use now.

 

But there is no distinction between the club and Ashley. There is no 'we' the club. The club is, like it or not, Ashley's. Money into the club, money out of the club is money into Ashley's pocket, money out of Ashley's pocket. When we're sold, the new buyer will consider our future cash flow (included advertising which isn't being paid for), sum it, discount it, and pay. Our day to day running, at this moment of time, isn't affected in the least by any advertising we do for Ashley or Sports Direct.

 

Last example: You own a company, and you own a car (that is in your name). If you start sticking advertising on your car for your company, does it matter whether your company pays you for the advertising? It doesn't, because it's moving money from one pocket to another. Leaving aside tax reasons, there would be no logic in doing it.

 

The curious thing is that he only owns something like 70% of Sports Direct, so it actually makes more sense to shift money from there into the club, since it's shifting 70% of his money + 30% of other people's into something that is 100% of his. But SD's shares increase a lot more when they're profitable, and an increase in the share price is worth hundreds of millions of pounds to Ashley, so it makes business sense to shift money the other way around.

 

Our accounts would look a lot healthier if Sports Direct were paying us a few million a year though.  Funny, that.

[JH]

That 'NEWCASTLE UNITED' sign has been there for pretty much my entire life (or as much of it as I can remember). And it's on pretty much every picture of St James Park, as well as all of the television highlights and live games.

 

He's ruining an iconic image of our club and our city. And it'll never be the same again, even after he's eventually sold up and left.

 

I couldn't care less if we were getting £100m out of it. It f***ing sickens me what he's doing.

[Taylor Swift]

 

And whatever you are paying is being spent on the football club. Well, as much as the tight-fisted b****** is willing to spend, anyway.

 

But this advertising stuff is nonsense. It has nothing to do with the sustainability of the club. It has nothing to do with whether we're able to afford players. If we would normally get £100k from that advertising space then in the long run, the club will benefit because it is revenue and cash flow that haven't been utilised and spent. But since he owns 100% of the club at this moment of time, the club's books - beyond the fundamentals to do with the running of the club, like the wage bill and tv money - are meaningless.

 

If he were to give himself a consulting fee of £100m next year, would that have any effect on what happens with the football side of things? Do you think we would spend less on transfers or wages? Like I said, it's moving money from his left pocket to his right. It has nothing to do with whether we're able to fork out £10m for N'Zogbia.

 

Another example: next year the club gets £100m for the advertising from SD. Do you think we would spend £50m on players? Of course not. It's his money, his club, his company.

 

Say you have two houses with £50k of cash in each. Now you move £50k from house A to house B. Would you suddenly say 'oh s***, house B has so much spare cash now, I might want to get myself a new flat screen tv'. Of course not. The value of your total assets is still the same, only the individual pieces have different values. It's like the club and SD. Move £100m from SD to the club. Does it make Ashley richer, and thus able to fund £50m on transfers for the club? No, because in the end it is he who has to spend the money, not the club.

 

The advertising stuff isn't nonsense while we're using incoming transfer fees to pay for upgrades to the training facilities and claiming we've spent 35 million on free transfers.  Also, 100k is way short of what we'd get from a third party as SD get more advertising than anybody else apart from it not being on the shirt and NR and Puma pay millions.

 

It's meaningless, man. He could charge SD £2m a year for that advertising space tomorrow and then the next day start charging 5% interest on the money that he has loaned to the club. Money from one pocket moving to another. It's just accounting stuff that's aimed at maximising the value of his assets.

 

The shit about the incoming transfer fee paying for upgrading training facilities is a bunch of bs. The fundamental issue is how much the club can spend year in year out without him having to put in money, because that is what determines the value of the club. That includes counting all revenue which isn't collected and all expenses which are 'overexpensed'.

[Taylor Swift]

 

That was a horrible example I've edited it so it makes more sense but I'm not sure if it makes perfect sense.

 

It's an example to show that the debt thing is meaningless. Whoever buys the club will actually have to pay £xm. Whether that x is straight cash to Ashley or 50% cash and the rest as debt owed to Ashley that the club (and therefore the new owner) assumes when they buy the club.

 

I understand what you're saying, it just isn't relevant to our day to day running and how we could put potential advertising income to good use now.

 

But there is no distinction between the club and Ashley. There is no 'we' the club. The club is, like it or not, Ashley's. Money into the club, money out of the club is money into Ashley's pocket, money out of Ashley's pocket. When we're sold, the new buyer will consider our future cash flow (included advertising which isn't being paid for), sum it, discount it, and pay. Our day to day running, at this moment of time, isn't affected in the least by any advertising we do for Ashley or Sports Direct.

 

Last example: You own a company, and you own a car (that is in your name). If you start sticking advertising on your car for your company, does it matter whether your company pays you for the advertising? It doesn't, because it's moving money from one pocket to another. Leaving aside tax reasons, there would be no logic in doing it.

 

The curious thing is that he only owns something like 70% of Sports Direct, so it actually makes more sense to shift money from there into the club, since it's shifting 70% of his money + 30% of other people's into something that is 100% of his. But SD's shares increase a lot more when they're profitable, and an increase in the share price is worth hundreds of millions of pounds to Ashley, so it makes business sense to shift money the other way around.

 

Our accounts would look a lot healthier if Sports Direct were paying us a few million a year though.  Funny, that.

 

But it would be meaningless, wouldn't it? Since he owns 100% of the club. It's like leaving your wallet in your car. Yeah, if you're going to sell the car with the wallet inside then the value would be car + wallet. But if you take out your wallet then the value would only be the car.

 

Same thing here.

[BottledDog]

 

That was a horrible example I've edited it so it makes more sense but I'm not sure if it makes perfect sense.

 

It's an example to show that the debt thing is meaningless. Whoever buys the club will actually have to pay £xm. Whether that x is straight cash to Ashley or 50% cash and the rest as debt owed to Ashley that the club (and therefore the new owner) assumes when they buy the club.

 

I understand what you're saying, it just isn't relevant to our day to day running and how we could put potential advertising income to good use now.

 

But there is no distinction between the club and Ashley. There is no 'we' the club. The club is, like it or not, Ashley's. Money into the club, money out of the club is money into Ashley's pocket, money out of Ashley's pocket. When we're sold, the new buyer will consider our future cash flow (included advertising which isn't being paid for), sum it, discount it, and pay. Our day to day running, at this moment of time, isn't affected in the least by any advertising we do for Ashley or Sports Direct.

 

Last example: You own a company, and you own a car (that is in your name). If you start sticking advertising on your car for your company, does it matter whether your company pays you for the advertising? It doesn't, because it's moving money from one pocket to another. Leaving aside tax reasons, there would be no logic in doing it.

 

The curious thing is that he only owns something like 70% of Sports Direct, so it actually makes more sense to shift money from there into the club, since it's shifting 70% of his money + 30% of other people's into something that is 100% of his. But SD's shares increase a lot more when they're profitable, and an increase in the share price is worth hundreds of millions of pounds to Ashley, so it makes business sense to shift money the other way around.

 

Our accounts would look a lot healthier if Sports Direct were paying us a few million a year though.  Funny, that.

 

Let's hope that in the next accounts we see thet they are then (they may well be).

 

I understand what Pip is getting at, but as they are separate companies, I'd prefer to see actual money going into the accounts than just accept the idea we are benefiting on trust.

[Taylor Swift]

You sell your house with furniture, you charge more for it. You sell it without, you charge less for it. In the end, what you get is the same.

 

From Ashley's perspective, it's meaningless whether the club is making a profit or loss if it is doing so because of expenses or revenue that have nothing to do with the fundamentals of the club. If it's making a loss because we're spending too much on wages then it matters. If we're making a £100m profit because Sports Direct paid £100m for advertising, then it would be meaningless to him. And since he owns the club and therefore whenever we spend money, he is spending money, it's meaningless to the club as well.

[mattypnufc]

Aren't we basing this whole debate on Steve Wraith's tweet without proof?

 

We've had these discussions before about naming rights/branding etc.

[Taylor Swift]

If he paid himself £20m in salary next year from the club, would our transfer and wage budget change to accommodate this? Of course not.

[ChrisMcQuillan]

Aren't we basing this whole debate on Steve Wraith's tweet without proof?

 

We've had these discussions before about naming rights/branding etc.

 

Tbf, we're unlikely to have proof until it appears there.

[Mick]

 

So, in 2008/9 that won't refer to the naming rights, big f*** off sign then? We just don't know yet what money SD might/might not be paying.

 

We were paid nothing in the 2009 and 2010 accounts which probably doesn't cover the naming rights which happened in late 2009.  During the period we paid to advertise SD our commercial income dropped by 8 million per season.

[Matt]

Pip- I think the point here is that while in effect, Mike Ashley (Sports Direct) is largely the same as Mike Ashley (NUFC), when we are using the financial state of the club as an excuse for its spending policy, or using the line 'not a penny has left the club'. OK, so no cash has left, but clearly a benefit in kind which would otherwise may have generated external revenue for the club.

 

From a practical view, just like the idea NUFC 'owe' Ashley £150m (or however much it is), any amount involved is irrelevant- but when only the NUFC side of the transaction is being used in the club's messaging, then I can see why people may see this as distortion of the truth. But frankly we should expect nothing else.

[Taylor Swift]

Pip- I think the point here is that while in effect, Mike Ashley (Sports Direct) is largely the same as Mike Ashley (NUFC), when we are using the financial state of the club as an excuse for its spending policy, or using the line 'not a penny has left the club'. OK, so no cash has left, but clearly a benefit in kind which would otherwise may have generated external revenue for the club.

 

From a practical view, just like the idea NUFC 'owe' Ashley £150m (or however much it is), any amount involved is irrelevant- but when only the NUFC side of the transaction is being used in the club's messaging, then I can see why people may see this as distortion of the truth. But frankly we should expect nothing else.

 

Yup.

[Interpolic]

You moved house recently, Pip?

[Taylor Swift]

 

So, in 2008/9 that won't refer to the naming rights, big f*** off sign then? We just don't know yet what money SD might/might not be paying.

 

We were paid nothing in the 2009 and 2010 accounts which probably doesn't cover the naming rights which happened in late 2009.  During the period we paid to advertise SD our commercial income dropped by 8 million per season.

 

I'm sure that's because our £5m a year deal with Northern Rock turned into a £2m a year deal.

 

And let's also note that none of this hideous advertising was there in the first place, so we're not exactly 'losing' any money, or that he's decreased our revenue. We haven't replaced a sponsor with Sports Direct. There wasn't a sponsor for those things in the first place.

[Taylor Swift]

You moved house recently, Pip?

 

No. But I'm obviously spending too much time at work at the moment

[Mick]

 

But there is no distinction between the club and Ashley. There is no 'we' the club. The club is, like it or not, Ashley's. Money into the club, money out of the club is money into Ashley's pocket, money out of Ashley's pocket. When we're sold, the new buyer will consider our future cash flow (included advertising which isn't being paid for), sum it, discount it, and pay. Our day to day running, at this moment of time, isn't affected in the least by any advertising we do for Ashley or Sports Direct.

 

Last example: You own a company, and you own a car (that is in your name). If you start sticking advertising on your car for your company, does it matter whether your company pays you for the advertising? It doesn't, because it's moving money from one pocket to another. Leaving aside tax reasons, there would be no logic in doing it.

 

The curious thing is that he only owns something like 70% of Sports Direct, so it actually makes more sense to shift money from there into the club, since it's shifting 70% of his money + 30% of other people's into something that is 100% of his. But SD's shares increase a lot more when they're profitable, and an increase in the share price is worth hundreds of millions of pounds to Ashley, so it makes business sense to shift money the other way around.

 

The bit in bold is true as far as Ashley is concerned but wrong as far as the fans are concerned.  As for it being better for him to transfer cash from SD to the football club, that would only be true if he was in it for the long term.  If he's only in it for the short term than it's better for him to put his own money into the club in the hope that he can get it back if he sells up.

[Mick]

 

It's meaningless, man. He could charge SD £2m a year for that advertising space tomorrow and then the next day start charging 5% interest on the money that he has loaned to the club. Money from one pocket moving to another. It's just accounting stuff that's aimed at maximising the value of his assets.

 

The s*** about the incoming transfer fee paying for upgrading training facilities is a bunch of bs. The fundamental issue is how much the club can spend year in year out without him having to put in money, because that is what determines the value of the club. That includes counting all revenue which isn't collected and all expenses which are 'overexpensed'.

 

It's not meaningless to the club, it's meaningless to the clubs value to Ashley, not to us.  The extra income would mean that we weren't in a position where 35 million transfer income only brought in 3 free transfers.  You say that the upgrades to our facilities coming out of the transfer fee are bullshit, take that up with those at the club who peddle that shit then.