Llambias on SSN

[Dave]

http://www.guardian.co.uk/football/2008/aug/13/newcastleunited.premierleague

We first heard about the potential sale on a Saturday and had the deal done by the Wednesday, so if you are asking if we did due diligence before buying, then the answer has to be no.

[Happy Face]

http://www.guardian.co.uk/football/2008/aug/13/newcastleunited.premierleague

We first heard about the potential sale on a Saturday and had the deal done by the Wednesday, so if you are asking if we did due diligence before buying, then the answer has to be no.

 

We did the typical due diligence one would do on a public takeover. There is no sense that anyone has tried to mislead us.

http://www.independent.co.uk/sport/football/premier-league/mort-brings-sea-change-to-tone-of-business-on-the-tyne-460911.html

 

 

 

 

 

[Dave]

They don't know their arseholes from their earholes.

[Mick]

http://www.guardian.co.uk/football/2008/aug/13/newcastleunited.premierleague

We first heard about the potential sale on a Saturday and had the deal done by the Wednesday, so if you are asking if we did due diligence before buying, then the answer has to be no.

 

We did the typical due diligence one would do on a public takeover. There is no sense that anyone has tried to mislead us.

http://www.independent.co.uk/sport/football/premier-league/mort-brings-sea-change-to-tone-of-business-on-the-tyne-460911.html

 

 

 

 

 

 

They had the same accounts that we're discussing in here and did no more than that until they carried out the strategic review of the whole club.  It doesn't matter if one calls it due diligence while another calls it something else. 

 

Due diligence is an action, not a measure of an action.

[UV]

I've just had another look at the accounts which were showing a £33 million loss, it included a one off payment of £6.7 million for the Michael Owen injury while playing for England.    Take out that and we would have lost almost £40 million during the season before the takeover.

 

When you throw around figures of a £33m loss, I think a lot of people reading that will assume that the club actually spent £33m more than it took in in that year. It isn't that simple of course and I'm surprised the accountants haven't jumped in to clear that up for everyone. The vast majority of that loss was actually down to the accounting devaluation of the squad not an actual monetary outlay in that year.

 

The club actually spent around £10m more than it took in that year, which while not great is not as bad as people might be being led to believe. It certainly pales into insignificance when compared to the actual monetary losses (measured by the increasing size of the debt to Ashley) while Ashley has been in control of the club.

[UV]

http://www.guardian.co.uk/football/2008/aug/13/newcastleunited.premierleague

We first heard about the potential sale on a Saturday and had the deal done by the Wednesday, so if you are asking if we did due diligence before buying, then the answer has to be no.

 

 

I take back what I said, I didn't remember that one, he obviously has used that excuse albeit a year after Mort denied it.

[Heron]

As much as I hate these cunts, they're merely doing what 3,000 people or so do every week and slating the other half. I guess sections of our support just have to accept that if we give them stick, they're allowed to make comments like the ones Lamb-Arse has made here.

 

They need us as much as we need them, but one difference is we respect our enemy. We know they clearly have some form of wit and intelligence. They appear to think we're just a bunch of thick, narrow-minded, fickle-fucks.

[Guest secteur2010]

They appear to think we're just a bunch of thick, narrow-minded, fickle-f***s.

 

And quite a few of our fans do very little to dispel that myth.

[Guest bobthemag]

We signed Nolan and Ryan Taylor January 09, didn't we?.

 

Not saying it was the answer and/or enough (it clearly wasn't), but he did give JFK the money to spend.

 

I'm not pro-Ashley, but I can understand (to a degree) why he isn't spending all of his own money on players each transfer window, while also (allegedly) putting money into keeping the club running. Shepherd never put any of his own money in beyond his intial investment in '92, but because Ashley is a Multi-Millionaire (was a billionaire), he is seemingly expected to continuously.

 

There is clearly some kind of plan to get the club running off it own back again (reducing wages, etc), which is taking time, and hopefully promotion can/will help that as well, with the additional monies that will come with it.

 

Nolan and taylor weren't really the answer to our troubles, having sold Given and Nzogbia to turn a profit we really could have done with a bit of pace to secure the 1 point extra needed to survive.

 

It's funny because he arrived and spent massively when we should have been cutting back, then in the window before relegation he changed his policy to spend nothing when a little investment would have been massively cost effective long term.  I get the impression that his refusal to spend now only coincidentally matches up with being the right thing to do at this time.  When we reach a window where real investment is needed again, I'm certain he'll get it wrong again.

 

Also, I don't think Shepherd actually invested in '92 did he?,  I thought it was all bank loans that he and the Halls were liable for if it went tits up.

 

Not sure about that. We didn't really spend massively in the transfer market in summer 2007, although there was a hike in wages. We may have had a net transfer spend of between £5 million and £10 million (after selling Parker, Dyer) but at that stage, having done no due diligence, I don't think Ashley had the first idea of the economics of the business he'd just bought and he simply went where Fat Sam led him.

Fair comment. It might also be noted that when Ashley bought the club, he was something like the 25th richest person in the country. The GEC saw him lose half his fortune in one fell swoop and that was bound to have some sort of flow on effect against the club. I dont think anyone envisaged relegation last season, hence the reason why reduced salaries were not factored into players contracts in case of relegation. It has been a huge learning curve for him but there appears to be indications that he is certainly understanding the business of a football club a lot more.

 

hopefully the next time he appoints a good manager he will support him ie KK

[quayside]

I've just had another look at the accounts which were showing a £33 million loss, it included a one off payment of £6.7 million for the Michael Owen injury while playing for England.    Take out that and we would have lost almost £40 million during the season before the takeover.

 

When you throw around figures of a £33m loss, I think a lot of people reading that will assume that the club actually spent £33m more than it took in in that year. It isn't that simple of course and I'm surprised the accountants haven't jumped in to clear that up for everyone. The vast majority of that loss was actually down to the accounting devaluation of the squad not an actual monetary outlay in that year.

 

The club actually spent around £10m more than it took in that year, which while not great is not as bad as people might be being led to believe. It certainly pales into insignificance when compared to the actual monetary losses (measured by the increasing size of the debt to Ashley) while Ashley has been in control of the club.

 

 

Here we go again 

 

The £10 million you have quoted is a figure from the wrong cash flow. You need to look at the consolidated cash flow because that is the one where all the club transactions are reflected.

 

If you look at the right cash flow in the 2007 accounts you will find that the club shipped £7.5 million in cash in the year and it funded this by increasing its external debt and increasing its overdraft. So you are correct that the there was a mismatch of cash expended against the reported accounting result. However, if you look at the comparative in 2006 you will see that the club shipped £20 million (funded in the same way). Yet the reported accounting loss for the 2006 period was only £12 million.

 

The moral of this is that whilst there will always be differences between cash flows and reported accounting results they are only timing differences. And if you keep incurring trading losses they will need funding at some point. There were approx £90 million of trading losses in the balance sheet at 30th June 2007. These were not fictional losses and at some point in time they would need to be funded. At the same time there was external debt of only £68 million in place so there was a funding shortfall that was going to hit at some point, and Ashley ended up funding it.

 

To many people the world of accounting is a dark art but it is an art created with a set of rules designed with the express intention of presenting a true and fair view. The club was insolvent at 30th June 2007 and whilst no one can say what the outcome of that would have been if we’d stayed under the same ownership, it is a fact that Ashley had to personally guarantee to fund it. However you dress it up sh1t stinks unfortunately.

 

If you look at what happened post Ashley we recorded a reduced loss of £20 million in the year to 30 June 2008. So if you take the approx £90 million Ashley funded from the previous regime plus the £20 million we lost in 2008 you arrive at the £110 million that is shown as owing to Ashley when the accounts were signed in October 2008.

 

We don’t know what happened in 2009 yet and clearly there is a funding issue arising out of the relegation which is the subject of this thread. The case regarding Ashley’s role in the relegation has been discussed elsewhere (at length) as has his responsibility for any funding required as a result of it.   

 

[OzzieMandias]

 

The £10 million you have quoted is a figure from the wrong cash flow.

 

 

[Guest bobthemag]

wouldn't the accounts have been better if we had not been relegated through him selling players

[Mick]

 

When you throw around figures of a £33m loss, I think a lot of people reading that will assume that the club actually spent £33m more than it took in in that year. It isn't that simple of course and I'm surprised the accountants haven't jumped in to clear that up for everyone. The vast majority of that loss was actually down to the accounting devaluation of the squad not an actual monetary outlay in that year.

 

The club actually spent around £10m more than it took in that year, which while not great is not as bad as people might be being led to believe. It certainly pales into insignificance when compared to the actual monetary losses (measured by the increasing size of the debt to Ashley) while Ashley has been in control of the club.

 

I would love to see your face when you go to sell that £15,000 car you bought a few years ago and expect to get that back for it.

[Liam Liam Liam O]

 

When you throw around figures of a £33m loss, I think a lot of people reading that will assume that the club actually spent £33m more than it took in in that year. It isn't that simple of course and I'm surprised the accountants haven't jumped in to clear that up for everyone. The vast majority of that loss was actually down to the accounting devaluation of the squad not an actual monetary outlay in that year.

 

The club actually spent around £10m more than it took in that year, which while not great is not as bad as people might be being led to believe. It certainly pales into insignificance when compared to the actual monetary losses (measured by the increasing size of the debt to Ashley) while Ashley has been in control of the club.

 

I would love to see your face when you go to sell that £15,000 car you bought a few years ago and expect to get that back for it.

 

Sell it to Ashley and he would probably give him it.  Wouldn't even ask to take it for a spin either.

[Mick]

 

Sell it to Ashley and he would probably give him it.  Wouldn't even ask to take it for a spin either.

 

 

You fat cockney ba****d, get out of my car.

[UV]

The £10 million you have quoted is a figure from the wrong cash flow. You need to look at the consolidated cash flow because that is the one where all the club transactions are reflected.

 

If you look at the right cash flow in the 2007 accounts you will find that the club shipped £7.5 million in cash in the year and it funded this by increasing its external debt and increasing its overdraft. So you are correct that the there was a mismatch of cash expended against the reported accounting result. However, if you look at the comparative in 2006 you will see that the club shipped £20 million (funded in the same way). Yet the reported accounting loss for the 2006 period was only £12 million.

 

I stand corrected on that, I used the higher £10m figure as that correlated more to the increase in the net debt as calculated on nufc-finances. The point remains that from the point of view of a lay person it is somewhat misleading to say we lost £33m in that year when we actually overspent in cash terms by £7.5m.

 

Does the difference between the £90 million of trading losses (I assume you mean since the club was turned into a plc) and the £68 million of debt correspond to the net payments due on player transfers? Does the upfront payment of the sponsorship money come into it?

 

 

The moral of this is that whilst there will always be differences between cash flows and reported accounting results they are only timing differences. And if you keep incurring trading losses they will need funding at some point. There were approx £90 million of trading losses in the balance sheet at 30th June 2007. These were not fictional losses and at some point in time they would need to be funded. At the same time there was external debt of only £68 million in place so there was a funding shortfall that was going to hit at some point, and Ashley ended up funding it.

 

Am I right in thinking the £22m funding shortfall in the accounts would have been addressed by the sales of Milner, Given and N'Zogbia who would have only shown up as a couple of million worth of assets on the accounts in 06-07?

 

If you look at what happened post Ashley we recorded a reduced loss of £20 million in the year to 30 June 2008. So if you take the approx £90 million Ashley funded from the previous regime plus the £20 million we lost in 2008 you arrive at the £110 million that is shown as owing to Ashley when the accounts were signed in October 2008.

 

It's all about the timing as you say, but the 06-07 accounts took the full hit for Luque (£7.5m) even though he was actually sold in the following accounting period. Without that adjustment there'd have been £5m less of a loss in 06-07 and £5m more in 07-08 levelling it out in spite of the £18m increased TV money.

 

 

 

[UV]

 

When you throw around figures of a £33m loss, I think a lot of people reading that will assume that the club actually spent £33m more than it took in in that year. It isn't that simple of course and I'm surprised the accountants haven't jumped in to clear that up for everyone. The vast majority of that loss was actually down to the accounting devaluation of the squad not an actual monetary outlay in that year.

 

The club actually spent around £10m more than it took in that year, which while not great is not as bad as people might be being led to believe. It certainly pales into insignificance when compared to the actual monetary losses (measured by the increasing size of the debt to Ashley) while Ashley has been in control of the club.

 

I would love to see your face when you go to sell that £15,000 car you bought a few years ago and expect to get that back for it.

 

Players are not cars. Some of them appreciate, they don't just depreciate which is all that is accounted for in accounts.

[Colos Short and Curlies]

 

When you throw around figures of a £33m loss, I think a lot of people reading that will assume that the club actually spent £33m more than it took in in that year. It isn't that simple of course and I'm surprised the accountants haven't jumped in to clear that up for everyone. The vast majority of that loss was actually down to the accounting devaluation of the squad not an actual monetary outlay in that year.

 

The club actually spent around £10m more than it took in that year, which while not great is not as bad as people might be being led to believe. It certainly pales into insignificance when compared to the actual monetary losses (measured by the increasing size of the debt to Ashley) while Ashley has been in control of the club.

 

I would love to see your face when you go to sell that £15,000 car you bought a few years ago and expect to get that back for it.

 

Players are not cars. Some of them appreciate, they don't just depreciate which is all that is accounted for in accounts.

 

Not at Newcastle they dont

[Heron]

They appear to think we're just a bunch of thick, narrow-minded, fickle-f***s.

 

And quite a few of our fans do very little to dispel that myth.

 

Question is - who are the fickle ones amongst us?

[UV]

 

When you throw around figures of a £33m loss, I think a lot of people reading that will assume that the club actually spent £33m more than it took in in that year. It isn't that simple of course and I'm surprised the accountants haven't jumped in to clear that up for everyone. The vast majority of that loss was actually down to the accounting devaluation of the squad not an actual monetary outlay in that year.

 

The club actually spent around £10m more than it took in that year, which while not great is not as bad as people might be being led to believe. It certainly pales into insignificance when compared to the actual monetary losses (measured by the increasing size of the debt to Ashley) while Ashley has been in control of the club.

 

I would love to see your face when you go to sell that £15,000 car you bought a few years ago and expect to get that back for it.

 

Players are not cars. Some of them appreciate, they don't just depreciate which is all that is accounted for in accounts.

 

Not at Newcastle they dont

 

I realise you're being glib, but...

 

Milner - accounting value <£1m, actual value £12m£9/10m

N'Zogbia - accounting value <£100k, actual value £6m

Given - accounting value £0, actual value £5m

Bassong - accounting value £2m, actual value £8m?

Taylor - accounting value £0, actual value £?

[Happy Face]

Amazing how we all agree Ashley has been a fuck up but take all this effort disussing exactly how much of a fuck up.

[Colos Short and Curlies]

Amazing how we all agree Ashley has been a fuck up but take all this effort disussing exactly how much of a fuck up.

 

I suppose though its important in rationalising whether indivudally you are willing to accept the mistakes whihc have been made were made in an effort to do something right or are all part of a plan to screw us over.

 

It is fairly obvious that I feel that he has made decisions he felt were right at the time and has started to make some better decisions since relegation, and hence if he stays or goes I'm not particularly arsed - I'm more interested in what a new owner would bring to the table than desperate to see the back of Ashley (and I would be happy with a strategy of bringing in young players with hunger rather than plodders past their best).

 

Others want him out come what may, and I do actually understand their pov, just don't agree with it! 

[UV]

Amazing how we all agree Ashley has been a fuck up but take all this effort disussing exactly how much of a fuck up.

 

I suppose though its important in rationalising whether indivudally you are willing to accept the mistakes whihc have been made were made in an effort to do something right or are all part of a plan to screw us over.

 

It is fairly obvious that I feel that he has made decisions he felt were right at the time and has started to make some better decisions since relegation, and hence if he stays or goes I'm not particularly arsed - I'm more interested in what a new owner would bring to the table than desperate to see the back of Ashley (and I would be happy with a strategy of bringing in young players with hunger rather than plodders past their best).

 

Others want him out come what may, and I do actually understand their pov, just don't agree with it! 

 

I certainly don't believe it was a "plan to screw us over", but I think it's just as simplistically naive to believe he wanted to buy and run a club because he's such a big footy fan and he wants to altruistically give the club £20m a year. I lean toward believing he thought he could make a quick buck by buying what he thought was a bargain (and in the climate he bought it in it may have been), get supporters onside by claiming to be a saviour and spending money on buying up debt, then in the short to medium term sell it on to a rich arab or a poor yank with access to a gullible bank. I think he wanted to make the books look like they were improving year on year since he came in and turned things around, but I don't think he cared too much about the team (hence why the money he put in went into paying for players up front instead of simply giving us a bigger transfer budget).

[Happy Face]

I think he came with the best intentions and thought he could be in it for the long haul.  He planned to make a success of it from the start. 

 

When it went belly up he hoped to get out with as little loss as possible.

 

I think he's naive and incompetent rather than malicious or machiavellian.

[OzzieMandias]

I think he came with the best intentions and thought he could be in it for the long haul.  He planned to make a success of it from the start. 

 

When it went belly up he hoped to get out with as little loss as possible.

 

I think he's naive and incompetent rather than malicious or machiavellian.

 

For once I more or less agree with you.