nufc losing £500,000 a week

[QBG]

SO you didnt read the thread? Fair enough, you are aware that £500k a week is £26m over a season arent you? Do you know what our losses were on the last accounts? If you read it you would know its a matter of cashflow anyway.

 

Why are you talking of 35k crowds? The capacity is 52k and only 3 games have had over 44k(well 4 but that was 28 people over) that means the majority of our games are well down on last season.

 

The club has sold off the catering havent they? You can spend £10m in the ground on pies, the club wont get it.

 

The TV deal is tiny, We will be talking a few million for the 15 or so games we have had live compared to massive amounts last season.

 

I don't know the exact figure of our losses last season but I know it was higher than £26m as we were paying Owen over £100,000 a week nevermind the rest of the squad. I had no idea we had sold off our catering, so fair enough on that one. I still find it hard to believe that with all the lack of re-investment in the squad, the reception of parachute payments, money from transfers etc. That we are losing that much a week, surely that money went to the club and not too Ashley's back pocket. Or maybe I'm overestimating Ashley.

[Exiled in Texas]

Old Board/New Board, Keegan, Ashley, Marmite - you either love it or hate it.  No amount of logic or detail will be sufficient to convince those that don't want to believe it.

 

Yes - Ashley screwed up with the Wise/Keegan/Kinnear fiasco, but I'm not convinced that it did anything other than bring forward relegation that was looking more and more ominous each season based on our tumbling league positions. And I do think that the club is better prepared from a financial position now, than it was last season or would have been had we stayed with Hall/FFS.  I truely wonder what would have happened to the club had we continued to be run by FFS on credit, loans and blind faith and then suffered relegation - what position would the club be in - or would Pompey fans be saying "at least we're not Newcastle".

 

I'm sure that we are coming out of this better positioned for the future, both from a clubs financial perspective, and also from the overall football market where clubs will have some huge adjustments to make. I think we are just ahead of the curve, and are better positioned than most clubs for the new football order that will soon emerge

[Pilko]

If we do get promoted wages will go up as the players probably have a claus in their contracts to that effect.

 

Nah, unlikely. The only ones I would imagine that applies to are the January signings, and maybe Lovenkrands. Most of these players signed their deals (without relegation clauses) with us before we were relegated, so why would there be a promotion clause in there?

[afar]

Just another attempt at some ham fisted PR.

 

I think the situation is and has always been pretty clear, go back up and we've got a good financial base to build from, stay down for another season and we are screwed.

 

I think that was the issue in the summer for potential buyers, I don't think any of them were confident in our ability enough to get straight back up to invest the required amount. Hopefully there will be one or two of them kicking themselves at the end of this season.

 

I don't claim to be any financial expert so I'm going to stay clear of the money debate but I will point out a couple of things. Along with the loss in TV money we lost a lot of money through advertising and corporate income by going down. They would also have had to shell out "loyalty" bonuses for players such as Owen, Martins, Beye, and possibly Viduka, who either served their full contracts or were sold without putting in a formal transfer request. The club of course had to pay KK off too, not as much as had been feared however.

To counter that there's a lot of debate about us not receiving all the money at once for the sales we made in the summer, however we forget about payments still due to us for players we sold prior to that,  Milner, Zog, Given and even still perhaps the likes of Parker and Dyer. There are more matches in the championship, and although match day income has gone down, due to smaller crowds, it was around 48,000 last year, this year it'll be around 40 - 43,000. 926,000 people watched the league games at SJP last season, somewhere between 920,000 and 980,000 will see league games this year, so income form matches remains around the same if not more because there are fewer season ticket holders and more paying per match (season ticket holder pay less per match ticket than those paying on the day of course).

 

Should we be appreciative of Ashley's efforts here ? Well as others have said it was he who put us in the mess in the first place, he has been however prepared to sustain a short term loss but that is more surely with a the long term in mind, if not he would have been happy to let us slide into admin or sell the club to the highest bidder.

 

At the end of the day though it's his business, as much as we have an emotional connection to NUFC, it's he who will be financially liable for the mistakes he's made not us. In order for him to make money from this business venture he has to keep the fans happy, that costs money, but he has to balance that with keeping costs under control. The hope has to be that he's learned that the football business does not operate like other businesses, who knows this relegation may have proved a blessing in disguise, as if we go up next year Ashley has a unique opportunity to push forward with a sustainable business model. I think he gambled by sticking to his valuation of the club in the summer, he could have probably shifted it for less money but he saw that if he held out and we did bounce back up, he would be in a much healthier position. Hopefully, and I don't say this for his sake, his gamble will have paid off.

[UV]

Ashley's a cunt who is, for a large part, responsible for our current predicament. However, I do believe that his financial strategy for the club ie. making it as close to self-sufficient as possible is absolutely spot-on.

 

I don't think any of us will be able to forgive and forget the fucking shambolic way in which Ashley orchestrated our downfall but I don't think anyone can deny that if we return to the Premier League we will be in a much better position than when we left it. Ok, we might spend a couple of season struggling in the bottom half of the table but we'd been doing that for a while anyway.

 

It's far too easy to bury your head in the sand as a fan and ignore the club's spiralling debt but it doesn't take a genius to work out that we were seriously in the shit. Relegation hasn't helped that but it has enabled us all to reign in our expectations and for the club to go someway to sorting itself out.

 

The Premier League has had a reality check in the past couple of seasons and I think the days of gung-ho spending are gone (except for the likes of Man City). We might even see some clubs go out of existence as a direct result of spending beyond their means. Thankfully it looks like we won't be one of them.

 

We were self sufficient before Ashley took over, I don't know where people get the idea from that we weren't (well actually yes I do, it's from Ashley's propaganda machine that people were happy to believe when he took over and for some reason still believe now, and sites like nufc-finances which were only ever interested in being anti-Shepherd). The club had no more of a debt when Ashley took over than it did in 2001 prior to us going through a period of football we can only dream of now, so to blame it all on the debt the club had when he took over is ludicrous. The debt was perfectly manageable - the vast majority of it was a long term fixed rate mortgage which was used to build something which brought in revenue to cover it's own repayments and left plenty over to add to the money we could spend on transfers and wages. Only around £25m of the debt was due to transfers/wages/running costs - you'll struggle to find many Premiership clubs without sugar daddies who have less debt than that (I think it's only Blackburn and the promoted sides). How this is seen as financial mismanagement is beyond me. The debt couldn't carry on growing indefinitely of course, but what on earth makes people think that the old board would have completely recklessly let it get out of hand? There's no evidence for it at all, in fact one of the major criticisms of the old board before it became fashionable to claim we were about to collapse financially was that in the Summer of 02 that we didn't spend extra money beyond the budget on transfers (we spent the budget early on Woodgate) before we had actually qualified for the CL proper. If the board had been as reckless as some seem to believe, then we would have gambled on getting into the CL that year. Maybe it would have made a difference, or maybe Shearer or Dyer or Woodgate or Hughes wouldn't have missed their pens, but the fact they didn't take the gamble shows they at least had some restraint in the risks they took. There's no doubt in my mind that barring another disastrous injury filled season worse even than the one under Roeder we would never have been relegated and that staying in the PL we would never have gone to the wall under the old board.

 

Prior to relegation, the money Ashley put in was specifically to take on any and all debts including paying up front for players (which he could charge interest on should he chose). He did not put money into the team to improve or even maintain the quality of the squad, nor did he put money into improving the club infrastructure to bring in more revenue (on the contrary revenue streams have even been sold off I believe). No extra value or improvement went into the club because of the money he put in it, was just a change of creditor. It's not money that Ashley HAD to pay to keep the club running, it was just a change from owing money to the likes of Deportivo La Coruna to owing it to Ashley which he spins as "putting money in". You can chose to believe that he was going against how most clubs in the world operate (even those like Chelsea or Man City with no money worries) somehow for the long term good of the club, or that he was simply increasing the price he thought he'd be able to get for the club while appearing to be a generous owner. However the net outcome is the same whatever you think his motives were.

 

Post relegation the money has obviously gone to cover some of the loss of revenue due to his mistakes, but doesn't cover anywhere near the full loss of revenue & squad value. So how anyone can say if we get promoted we will be in a much better position than when we left is even further beyond me.

 

Ashley has turned this club from a stable, self-sustaining Premiership club into a potential yo-yo club unless decent amounts of cash are spent in the Summer on players for the here and now, not just punts on cheap players noone else wants who may come good. He has NOT somehow miraculously turned round the finances, by losing the club at least £50m in income, selling off or giving away revenue streams, making over 100 support staff redundant, and selling off/letting the contracts expire of most of the best players at the club.

[Benwell Lad]

Old Board/New Board, Keegan, Ashley, Marmite - you either love it or hate it.  No amount of logic or detail will be sufficient to convince those that don't want to believe it.

 

Yes - Ashley screwed up with the Wise/Keegan/Kinnear fiasco, but I'm not convinced that it did anything other than bring forward relegation that was looking more and more ominous each season based on our tumbling league positions. And I do think that the club is better prepared from a financial position now, than it was last season or would have been had we stayed with Hall/FFS.  I truely wonder what would have happened to the club had we continued to be run by FFS on credit, loans and blind faith and then suffered relegation - what position would the club be in - or would Pompey fans be saying "at least we're not Newcastle".

 

I'm sure that we are coming out of this better positioned for the future, both from a clubs financial perspective, and also from the overall football market where clubs will have some huge adjustments to make. I think we are just ahead of the curve, and are better positioned than most clubs for the new football order that will soon emerge

 

Words of wisdom from the Lone Star state.

[ikri]

We were self sufficient before Ashley took over

 

Stopped reading there.  We were losing money hand over fist before Ashley took over, take a look at the accounts filed under FFS.  Have a look on football-finances.org.uk to see where we were heading at the time.

[Stu]

Ashley's a cunt who is, for a large part, responsible for our current predicament. However, I do believe that his financial strategy for the club ie. making it as close to self-sufficient as possible is absolutely spot-on.

 

I don't think any of us will be able to forgive and forget the fucking shambolic way in which Ashley orchestrated our downfall but I don't think anyone can deny that if we return to the Premier League we will be in a much better position than when we left it. Ok, we might spend a couple of season struggling in the bottom half of the table but we'd been doing that for a while anyway.

 

It's far too easy to bury your head in the sand as a fan and ignore the club's spiralling debt but it doesn't take a genius to work out that we were seriously in the shit. Relegation hasn't helped that but it has enabled us all to reign in our expectations and for the club to go someway to sorting itself out.

 

The Premier League has had a reality check in the past couple of seasons and I think the days of gung-ho spending are gone (except for the likes of Man City). We might even see some clubs go out of existence as a direct result of spending beyond their means. Thankfully it looks like we won't be one of them.

 

We were self sufficient before Ashley took over, I don't know where people get the idea from that we weren't (well actually yes I do, it's from Ashley's propaganda machine that people were happy to believe when he took over and for some reason still believe now, and sites like nufc-finances which were only ever interested in being anti-Shepherd). The club had no more of a debt when Ashley took over than it did in 2001 prior to us going through a period of football we can only dream of now, so to blame it all on the debt the club had when he took over is ludicrous. The debt was perfectly manageable - the vast majority of it was a long term fixed rate mortgage which was used to build something which brought in revenue to cover it's own repayments and left plenty over to add to the money we could spend on transfers and wages. Only around £25m of the debt was due to transfers/wages/running costs - you'll struggle to find many Premiership clubs without sugar daddies who have less debt than that (I think it's only Blackburn and the promoted sides). How this is seen as financial mismanagement is beyond me. The debt couldn't carry on growing indefinitely of course, but what on earth makes people think that the old board would have completely recklessly let it get out of hand? There's no evidence for it at all, in fact one of the major criticisms of the old board before it became fashionable to claim we were about to collapse financially was that in the Summer of 02 that we didn't spend extra money beyond the budget on transfers (we spent the budget early on Woodgate) before we had actually qualified for the CL proper. If the board had been as reckless as some seem to believe, then we would have gambled on getting into the CL that year. Maybe it would have made a difference, or maybe Shearer or Dyer or Woodgate or Hughes wouldn't have missed their pens, but the fact they didn't take the gamble shows they at least had some restraint in the risks they took. There's no doubt in my mind that barring another disastrous injury filled season worse even than the one under Roeder we would never have been relegated and that staying in the PL we would never have gone to the wall under the old board.

 

Prior to relegation, the money Ashley put in was specifically to take on any and all debts including paying up front for players (which he could charge interest on should he chose). He did not put money into the team to improve or even maintain the quality of the squad, nor did he put money into improving the club infrastructure to bring in more revenue (on the contrary revenue streams have even been sold off I believe). No extra value or improvement went into the club because of the money he put in it, was just a change of creditor. It's not money that Ashley HAD to pay to keep the club running, it was just a change from owing money to the likes of Deportivo La Coruna to owing it to Ashley which he spins as "putting money in". You can chose to believe that he was going against how most clubs in the world operate (even those like Chelsea or Man City with no money worries) somehow for the long term good of the club, or that he was simply increasing the price he thought he'd be able to get for the club while appearing to be a generous owner. However the net outcome is the same whatever you think his motives were.

 

Post relegation the money has obviously gone to cover some of the loss of revenue due to his mistakes, but doesn't cover anywhere near the full loss of revenue & squad value. So how anyone can say if we get promoted we will be in a much better position than when we left is even further beyond me.

 

Ashley has turned this club from a stable, self-sustaining Premiership club into a potential yo-yo club unless decent amounts of cash are spent in the Summer on players for the here and now, not just punts on cheap players noone else wants who may come good. He has NOT somehow miraculously turned round the finances, by losing the club at least £50m in income, selling off or giving away revenue streams, making over 100 support staff redundant, and selling off/letting the contracts expire of most of the best players at the club.

 

 

Kenneth, is that you?

 

 

With every thread vaguely related to the club's finances, the same replies come out from people who clearly haven't read any of the previous finance-related threads. It would stop a lot of people banging their heads against a wall if EVERYONE would take the time to click on quayside's name and read his contribution to the thread.

 

It will answer the majority of your questions and explain a lot of the jargon which has been used to make these headline-grabbing figures.

 

If you continue to persist with this idea that Ashley is to blame for the club's finances, etc, etc, then by all means post it in the anti-Ashley thread.

 

 

[afar]

Good Post UV, there's a lot of truth in there. I will however question you on the statement that we won't be better off, if we go back up.

 

The fact is we had a lot of dead wood in our squad, the likes of Martins for example would still be sucking money out of the club and contributing very little, had we not been relegated. Going down has also put value onto previously unsaleable assets, like Nolan, Smith and Colocinni.

 

I agree investment is still needed, even to just ensure that we don't become the yo-yo club you talk about. It'll be a crucial summer and may need some tough decisions to be made. If Ashley is brave enough to make them and gets enough of them right then he will have the "opportunity" and that word is the key, to build a sustainable, even profitable football club that can again challenge at the top of the league.

 

Obviously with Ashley, you really never know what he'll do, logic has not really been his thing.

[Guest Roger Kint]

 

I don't know the exact figure of our losses last season but I know it was higher than £26m as we were paying Owen over £100,000 a week nevermind the rest of the squad. I had no idea we had sold off our catering, so fair enough on that one. I still find it hard to believe that with all the lack of re-investment in the squad, the reception of parachute payments, money from transfers etc. That we are losing that much a week, surely that money went to the club and not too Ashley's back pocket. Or maybe I'm overestimating Ashley.

 

Erm those accounts havent been released yet, i was referring to 2008 ones where there is a chance the 2009 ones are worse again. This is why i have said too many times, read the thread man, its not rocket science

[EthiGeordie]

    Once for all we have to say past is past and Thanks Mike Ashely..

[Guest Wally_McFool]

    Once for all we have to say past is past and Thanks Mike Ashely..

 

Should we thank Derek for his sterling work as well! 

[Guest neesy111]

Self Sufficient under shepherd our debt had risen from 50M to 120M in 4 years

[Big Geordie]

Poor timing from the club this and I'm not falling for the 'hard luck' story. The club has admitted that it will lie to fans (a PR exercise) so why should this be any different? Our situation is a mess of Ashley's making and no amount of BS and the re-writing of history will change that. He should keep his (and the source) trap shut until he has something worthwhile saying.

 

First we had that in the NotW last weekend and now thing. What's with the timing, Mike?

[UV]

Self Sufficient under shepherd our debt had risen from 50M to 120M in 4 years

 

Link?

 

http://www.football-finances.org.uk/newcastle/2008/assets15.gif

[OzzieMandias]

[quayside]

Been here before with UV  my post 99 on the attached was on this same topic.

 

http://www.newcastle-online.org/nufcforum/index.php/topic,62694.90.html

 

an intelligent poster but has a major blind spot on the legacy of the previous board. Or he knows he's talking shyte and is in denial. I don't want to go into what he says about Ashley because firstly some of what Ashley has done is truly indefensible and secondly Ashley will ultimately be judged on what he leaves behind, like any owner.

 

As far as the crap about the previous board is concerned - at the end of their ownership like f*ck we were self sufficient, in June 2007:

 

- We had racked up trading losses of £90 million

- We were technically insolvent

- We had borrowed against every asset (and twice against the training ground)

- All our debt was owed externally and the owners were not in the habit of putting money in 

- Ashley had to personally guarantee that he would financially support the club to convince the auditors it was a going concern

 

And of course SJH only baled out because he felt it was time for some fresh blood to take over  

 

 

 

[Liam Liam Liam O]

And spent all of the sponsorship money.

[Stu]

And spent all of the sponsorship money.

 

..on Mickey O.

[Guest toonlass]

And spent all of the sponsorship money.

 

..on Mickey O.

 

...on unashamedly paying himself a huge amount of money for a warehouse.

[Mick]

We can all have a go at Ashley for where we are today, anybody having a go at his financial backing of the club is a joker.

[jdckelly]

We can all have a go at Ashley for where we are today, anybody having a go at his financial backing of the club is a joker.

as is anyone who claims the club was in any way shape or form stable notably in the financial area where the club was very unstable under Freddie. 

[Happy Face]

The high wage bill is partly due to having a number of players who we couldn't shift, and a lot of players without relegation wage reduction clauses in their contracts. Neither of these is really Ashley's fault, all the fact of relegation probably was.

 

Mike Ashley signed the contracts of EVERY player at the club so it's totally his fault.

[S.S.R.]

I'd have sympathy for Ashley and the story he's running through third parties, but he's been proved in the tribunal with KK to be a liar.

[Happy Face]

Newcastle United couldnt survive at the moment without Mikes money, its as simple as that."

 

This is remarkably similar to a statement made in December when 'a source' said Without Mike's input, the club would be broke. Simple as that." which I wrote about here and commented was like saying Josef Fritzl deserved credit for supporting Elizabeth Fritzl all her life.

 

"If Mike and the banks weren't willing to cover the cost of relegation Newcastle may well be in a Portsmouth situation"

 

He's given no impression whatsoever that he's "willing" to do any such thing. Like a rat on a sinking ship (the rat that gnawed through the hull) he's had the club on the market during almost every transfer window he's been at the club (or has claimed to have it on the market). He's often referred to his desire to cut his losses and sell up. He's been forced to cover the cost of his own mistake and nothing more. This is no act of altruism we're seeing. It's pure business. He knows this club is worth more than the current value he's dragged us down to....and a great deal more than Portsmouth who are a far smaller club with an average gate less than half the size of ours even in the league above.