Club statement

[Guest Brummiemag]

We can debate what is meant by no capital outlay, but what is clear is that there will little or no money available for new signings (apart from sell to buy) this season and for several seasons to come, in fact as long as Ashley remains in charge of the club.

 

If we ever want to compete for the major honours in the game again (which a club as well supported as Newcastle should always be aiming to do) then we have to spend money. All the other clubs that compete for major honours on a regular basis (and I include the FA and League Cup in that) spend the money. Its all very well talking about year on year improvement and youth policy but all the other clubs are already doing that.   

 

I have said many times that we will never win or achieve anything under Ashley and this just confirms it. Based on that statement, the very best we can hope for now is years and years of scraping around in the bottom half of the premier league, aspiring to be a Bolton or a Stoke in 3 years time.

 

If we survive next season then it wont be any better the season after  - years of mediocrity and declining crowds await 

 

For a club with our level of support that lack of ambition is criminal 

[thewellander]

- There will be transfers, but only those that can be paid up front.

 

That's your own interpretation, and a very optimistic one at that. Funny how virtually nobody else, including people on other websites and all of the media has understood it that way.

 

Hope you're right of course but I highly doubt it.

 

It's clearly what's written there. Capital outlay means paying over time. Later on in the statement they say that they will make agents sign confidentiality agreements when negotiating. So there will be transfers. Just not those we can't pay for with money at hand. It might be having to sell or it might mean that he provides a transfer kitty, but it doesn't mean that he has ruled out new players.

[PCW1983]

- There will be transfers, but only those that can be paid up front.

 

That's your own interpretation, and a very optimistic one at that. Funny how virtually nobody else, including people on other websites and all of the media has understood it that way.

 

Hope you're right of course but I highly doubt it.

 

I must admit its hard to try and understand what they actually mean by this but surly MA cant be silly enough to think we can survive without any new players........

[SteveMc]

- There will be transfers, but only those that can be paid up front.

 

That's your own interpretation, and a very optimistic one at that. Funny how virtually nobody else, including people on other websites and all of the media has understood it that way.

 

I don't think that is what they are meaning at all.  For one thing it is odds with all the talk of recruitment from within, youth players being drafted into the first team squad etc.  You could tie yourself in knots trying to sus the semantics of this statement.  I've had enough of it and will assume we'll be buying nowt and be pleasantly surprised if we spend anything at all

[FrenchWilliam]

- There will be transfers, but only those that can be paid up front.

 

That's your own interpretation, and a very optimistic one at that. Funny how virtually nobody else, including people on other websites and all of the media has understood it that way.

 

Hope you're right of course but I highly doubt it.

 

yeah but thats techincally what "new capital outlay"  means

 

It's not: http://www.google.co.uk/search?hl=en&safe=off&rls=com.microsoft:en-gb:IE-SearchBox&rlz=1I7SVEA_enGB351&defl=en&q=define:capital+outlay&ei=ADzoS_vlOILK-Qbt1-jZDw&sa=X&oi=glossary_definition&ct=title&ved=0CBUQkAE

 

I think the more generally accepted definition is the purchase of a long-term or fixed asset (ie player). My understanding of it is there's no plan to buy players. It doesn't say we don't have the money, or won't get extra coming in from the PL/TV this year, it just says we don't plan to spend any on players.

[FrenchWilliam]

I've had enough of it and will assume we'll be buying nowt and be pleasantly surprised if we spend anything at all

 

Same 

[Dave]

- There will be transfers, but only those that can be paid up front.

 

That's your own interpretation, and a very optimistic one at that. Funny how virtually nobody else, including people on other websites and all of the media has understood it that way.

 

Hope you're right of course but I highly doubt it.

 

It's clearly what's written there. Capital outlay means paying over time. Later on in the statement they say that they will make agents sign confidentiality agreements when negotiating. So there will be transfers. Just not those we can't pay for with money at hand. It might be having to sell or it might mean that he provides a transfer kitty, but it doesn't mean that he has ruled out new players.

 

I believe we will sign players and never said differently. What fucks me off (and plenty of others in this thread and elsewhere) is that there is no money available until we sell first. A clear statement that there is no ambition whatsoever other than to try and scrape survival on the minimum of spending year on year. I guess I hoped for some reason that they'd learnt a harsh lesson about how running a football club is different to other businesses but it appears they've not learnt a thing.

 

In fact considering the announcement today on parachute payments they probably don't really care if we go down next year.

[Mick]

 

It's clearly what's written there. Capital outlay means paying over time. Later on in the statement they say that they will make agents sign confidentiality agreements when negotiating. So there will be transfers. Just not those we can't pay for with money at hand. It might be having to sell or it might mean that he provides a transfer kitty, but it doesn't mean that he has ruled out new players.

 

Capital outlay can mean paying over time but it can also mean paying for something immediately and I know that having been in the position of purchasing from a capital budget.

[Parky]

They won't be spending much, but we knew that. What I don't understand is releasing a statement like this at the start of summer as if expecting trouble. They should have just gone quietly about their business. What wil happen now is that there will be a feeding frenzy in the press as soon as we start to lose games. Also practically admitting before a ball is kicked that you're not going to be competitive beggars belief.

[Matt]

That definition is wayward.

 

Capital expenditure (outlay if you will) is not about cash timing- it doesn't matter when you actually pay- it's when you acquire the asset (when we get the economic benefit ie can he train / play for us). So it doesn't matter if we pay in one go- you still capitalise all of the costs. Equally, a free transfer or loan would have such costs attached.

 

It's not cash paid over time- it is expensed over time (as amortisation). Nor is it a liability- the player is the asset and the liability would be the amount in fees we are yet to pay.

 

In fact the only way we can avoid capitalising anything is to buy players on 9-month contracts and letting them leave on a free, meaning all costs incurred would be expensed by the time the accounts were compiled.

 

In a nutshell, the statement in this regard is nonsensical and clearly written by someone who hasn't so much as passed a basic bookkeeping course. One good suggestion earlier is that Ashley himself won't stump up which is one reasonable view if you bear in mind how badly the rest of it was written.

[Parky]

- There will be transfers, but only those that can be paid up front.

 

That's your own interpretation, and a very optimistic one at that. Funny how virtually nobody else, including people on other websites and all of the media has understood it that way.

 

Hope you're right of course but I highly doubt it.

 

It's clearly what's written there. Capital outlay means paying over time. Later on in the statement they say that they will make agents sign confidentiality agreements when negotiating. So there will be transfers. Just not those we can't pay for with money at hand. It might be having to sell or it might mean that he provides a transfer kitty, but it doesn't mean that he has ruled out new players.

 

I believe we will sign players and never said differently. What fucks me off (and plenty of others in this thread and elsewhere) is that there is no money available until we sell first. A clear statement that there is no ambition whatsoever other than to try and scrape survival on the minimum of spending year on year. I guess I hoped for some reason that they'd learnt a harsh lesson about how running a football club is different to other businesses but it appears they've not learnt a thing.

 

In fact considering the announcement today on parachute payments they probably don't really care if we go down next year.

 

I was thinking about that last bit as well. They are really only intersted in balancing the books and the rest will be left to chance.

[Guest elbee909]

There was a bit in the accounts where it said company policy was to pay for players all in one shot rather than carry debt forward.

[Parky]

There was a bit in the accounts where it said company policy was to pay for players all in one shot rather than carry debt forward.

 

Which means ruling out anybody who is going to cost more than a couple of million.

[S.S.R.]

Why would it be an advantage to fork out full whack for a player rather than spread it out over the course of a few years?

 

How has this bloke become a billionaire?

[Ronaldo]

Why would it be an advantage to fork out full whack for a player rather than spread it out over the course of a few years?

 

How has this bloke become a billionaire?

 

Are you kidding me?

[Parky]

Why would it be an advantage to fork out full whack for a player rather than spread it out over the course of a few years?

 

How has this bloke become a billionaire?

 

I can only imgine he's obsessed with how the books look ie to a buyer.

[thewellander]

I seem to remember them being vocal about paying for players in installments prior to this announcement. It was one of the things that Ashley attacked the previous regime for. I don't think this is as sinister as it seems. It could even be argued that the sentence prior to the 'capital outlay' bit suggested that they wouldn't sell players.

 

Actually, let's all just agree that Ashley is a f***** idiot and even when he's trying to clarify the situation he manages to make it more complicated. What we should get out of this is that he has absolutely no intention of letting anyone in on his plans, so we really won't know until it happens or until it's too late for it to happen.

[Matt]

There was a bit in the accounts where it said company policy was to pay for players all in one shot rather than carry debt forward.

 

While the idea of paying up front but receiving in instalments flies in the face of everyday 'cash is king' business logic, we may have done it for the reason that Ashley was in a strong personal cash position.

 

Therefore he was more than happy to receive a higher fee in return for providing a bit of "interest-free credit" (which of course is never interest-free). The flipside is that when buying players we negotiate a discount for paying up front. As long as that discount/premium is a better return than what he could otherwise have been doing with his cash, then it makes sense.

 

Now Ashley is seemingly in clawback mode, that policy would not seem to make any sense at all.

[Cronky]

It boils down to why they've used the term 'capital outlay' rather than just 'outlay'. 'Capital' is a long-term asset, and so it can be acquired on the assumption that it can later be sold (at least in part) and the initial investment recouped. A bit like using a mortgage to buy a house. The previous board was buying players over and above its income, with the assumption that the debt could be paid off by selling the player or through money gained by success on the field. The Leeds option, although not so extreme.

 

So what they might be saying is that the expenditure will only come from income, and not by borrowing against an asset, in the form of a player or players.

 

Maybe that's an optimistic spin on it. They really need to clarify it though.

[gdm]

I seem to remember them being vocal about paying for players in installments prior to this announcement. It was one of the things that Ashley attacked the previous regime for. I don't think this is as sinister as it seems. It could even be argued that the sentence prior to the 'capital outlay' bit suggested that they wouldn't sell players.

 

Actually, let's all just agree that Ashley is a f***** idiot and even when he's trying to clarify the situation he manages to make it more complicated. What we should get out of this is that he has absolutely no intention of letting anyone in on his plans, so we really won't know until it happens or until it's too late for it to happen.

 

i posted comments from Llambias on the subject earlier.

 

Llambias said: “We are trying to get away from dating so that we don’t have huge amounts of money going out.

 

“We are trying to pay up front.

 

“People like Coloccini, Xisco and Gutierrez, which is just getting sorted out now – we own those players.

 

“It’s like buying a car on HP but then it gets written off, but you still have to pay it.

 

“That’s how the business was being run, they ran it on a credit.”

[B-more Mag]

That definition is wayward.

 

Capital expenditure (outlay if you will) is not about cash timing- it doesn't matter when you actually pay- it's when you acquire the asset (when we get the economic benefit ie can he train / play for us). So it doesn't matter if we pay in one go- you still capitalise all of the costs. Equally, a free transfer or loan would have such costs attached.

 

It's not cash paid over time- it is expensed over time (as amortisation). Nor is it a liability- the player is the asset and the liability would be the amount in fees we are yet to pay.

 

In fact the only way we can avoid capitalising anything is to buy players on 9-month contracts and letting them leave on a free, meaning all costs incurred would be expensed by the time the accounts were compiled.

 

In a nutshell, the statement in this regard is nonsensical and clearly written by someone who hasn't so much as passed a basic bookkeeping course. One good suggestion earlier is that Ashley himself won't stump up which is one reasonable view if you bear in mind how badly the rest of it was written.

 

This strikes me as probably closest to why it reads that way and what was meant.

[S.S.R.]

Llambias said:

“It’s like buying a car on HP but then it gets written off, but you still have to pay it.

 

Tremendous logic.

 

..."but if you buy a car with cash but then it gets written off... ....oh fuck, I haven't thought this one through, have I..."

[quayside]

Well - who would have thought we could end up debating the meaning of "capital outlay" on here?

 

I wouldn't read anything very complex into the use of the words at all. As Matt said there was no great intellect involved in cobbling together that statement. It's just trying to say that the club will not invest in the squad imho. So to me it means nothing more sophisticated than "sell to buy". I still wouldn't rule out some modest investment this summer, but the club is trying to keep expectations low so that no one gets pissed off when we fail to sign Torres. Christ that statement is a shocking effort,  the more I read it the worse it gets 

[cp40]

Llambias said:

“It’s like buying a car on HP but then it gets written off, but you still have to pay it.

 

Tremendous logic.

 

..."but if you buy a car with cash but then it gets written off... ....oh fuck, I haven't thought this one through, have I..."

 

 

 

does lambias not insure his cars? or am i getting the wrong message?

[cubaricho]

Some of the assumptions in this thread are  -tastic.