Club statement

[Happy Face]

The first team squad that won the Championship this year will form the basis of the team for next season in the Premier League.

 

 

The basis isn't the whole team/squad,and it suggests to me that there will be 2 or 3 signings to join the squad,bearing in mind that certain players,be it reserves or loanees or Nicky Butt that have already left the club.

 

Yep, it's as if that line's been completely ignored. I think everybody knew this would be the case anyway. When Birmingham came up they spent £8.5m on Johnson & Dann (an area we don't have to spend imo), and the only other cash signing was Barry Ferguson for £1m. Hasn't done them any harm has it?

 

Soccerbase says they spent £18m. Christian Benitez costing £8.5m.

[Optimistic Nut]

Yeah that's the source I used but they haven't signed him yet have they? Was just a loan deal.

 

http://www.bcfc.com/page/ProfilesDetail/0,,10412~47565,00.html

 

So I assume that £8.5m is the fee agreed if they choose to sign him this summer, which is looking doubtful.

[UV]

The first team squad that won the Championship this year will form the basis of the team for next season in the Premier League.

 

 

The basis isn't the whole team/squad,and it suggests to me that there will be 2 or 3 signings to join the squad,bearing in mind that certain players,be it reserves or loanees or Nicky Butt that have already left the club.

 

Yep, it's as if that line's been completely ignored. I think everybody knew this would be the case anyway. When Birmingham came up they spent £8.5m on Johnson & Dann (an area we don't have to spend imo), and the only other cash signing was Barry Ferguson for £1m. Hasn't done them any harm has it?

 

Will the 2 or 3 not simply be promoted from within from the footballing academy brimming with talent, skill and dedication?

 

 

 

All you pseudo-accountants are well wide of the mark with your interpretations of "capital outlay" btw. It quite obviously means that there will be no money spent on players from London or London based teams because Mike and Des know how much all the Geordie nation hate cockneys. Additionally all shirt lettering will be done in lower case to save money on transfers.

[Taylor Swift]

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?

 

SSR is totally right. Ronaldo, you may think you know a lot about the world, but it's obvious you know fuck all about accounting.

 

No business pays for things up front and sells things in installments. That goes against basic economic logic (inflation, discounting etc.). It's the opposite of what any sane business would do.

 

The only reason any club would do that is to prepare for a decrease in revenue, but why go to this extreme to protect the club's cashflow when other, more reasonable and common measures which leaves the club with more money to invest can be taken?

[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?

 

SSR is totally right. Ronaldo, you may think you know a lot about the world, but it's obvious you know f*** all about accounting.

 

No business pays for things up front and sells things in installments. That goes against basic economic logic (inflation, discounting etc.). It's the opposite of what any sane business would do.

 

The only reason any club would do that is to prepare for a decrease in revenue, but why go to this extreme to protect the club's cashflow when other, more reasonable and common measures which leaves the club with more money to invest can be taken?

 

It clear you don't know much yourself if you can't see the logic in buying players in one installment.

[Colos Short and Curlies]

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?

 

SSR is totally right. Ronaldo, you may think you know a lot about the world, but it's obvious you know f*** all about accounting.

 

No business pays for things up front and sells things in installments. That goes against basic economic logic (inflation, discounting etc.). It's the opposite of what any sane business would do.

 

The only reason any club would do that is to prepare for a decrease in revenue, but why go to this extreme to protect the club's cashflow when other, more reasonable and common measures which leaves the club with more money to invest can be taken?

 

It clear you don't know much yourself if you can't see the logic in buying players in one installment.

 

There's only one advantage to buying in one go, you will in some situations get a lower price.

 

Its like buying a car on finance, it costs more than if you pay cash. Even 0% finance is typically more expensive as the cost of the finace gets built into the 'price' of the car via lower discounts or such like.

 

Thats how he became a millionaire - buying cheap by using cash rather than accepting higher prices for a payment period.

 

If you think how a lot of football clubs are being run at the moment with debt - an immediate cash injection of £5m may well be more appealling than £7m over 4 years

 

(answering both of you here, not just ronaldo)

[Taylor Swift]

Basic accounting: Spend £1m today = £1m gone.

 

Spend £1m over 10 years, you pay £100k each year, but of course, because there is inflation (let's assume 2%), you actually only pay £98k in the second year, £96k in the third year, £94k in the fourth year etc. etc.

 

Put an extra 0 on that number and the amount of money that you're technically 'saving' is a lot, especially if the discount rate is higher than 2%.

 

That is just basic accounting. The value of money today is greater than the value of money in the future, so naturally people want more money today than they want it in the future, so it's basic economic logic that you should want to spend money in the future rather than today because that money will be worth less in the future.

 

Of course, clubs usually adjust for this when they negotiate transfer fees, which is why you'd pay more for a player if you're paying in installments, but imo not enough. Or, if they're run by idiots like we are, they don't adjust at all and will realise that the money they eventually pocket 2-5 years from now is actually worth shit all because the inflation rate in football is a lot higher than 2%.

 

I'll give you an example: We spent £15m on Shearer in 1996. If we had bought him, paid his wages but agreed to pay Blackburn £20m in 2006, that deal would have been an amazing deal because transfers had become so inflated by that time that £20m in 2006 terms for the return that Shearer delivered made the transfer an extremely valuable one.

 

There is also the fact that you can spread out your investment. Say we have £10m to spend this summer. If we bought an amazing CM for £10m, we wouldn't be able to buy anyone else. However, if we decide to spread out the investment over 5 years, we'd only be paying £2m now, which leaves £8m in the transfer kitty. Say we did the same thing with 4 other players, we'd be getting £50m worth of players but only actually paid out £10m. If things turn to shit and these players don't deliver value for money, we're hamstrung in the transfer market until we pay the deals off, but it doesn't fuck us up because we could choose not to spend any money in the future windows. If we decided to buy these 5 players but pay it all in one go (i.e. one player each year), the potential negatives are still the same. If these players don't live up to the hype, we've wasted 5 years. If we had spread out our investment, we would only be hamstrung for 5 years as well.

 

However, the positives are obviously different. If we buy these 5 players in one season, our team would obviously be much improved, generating immediate and future revenues which would not be possible unless we spent money in installments. If we had bought one player each year, the improvement would not be as dramatic, hence lower immediate and future revenues, which would hamstring our ability to spend in the future.

[Taylor Swift]

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?

 

SSR is totally right. Ronaldo, you may think you know a lot about the world, but it's obvious you know f*** all about accounting.

 

No business pays for things up front and sells things in installments. That goes against basic economic logic (inflation, discounting etc.). It's the opposite of what any sane business would do.

 

The only reason any club would do that is to prepare for a decrease in revenue, but why go to this extreme to protect the club's cashflow when other, more reasonable and common measures which leaves the club with more money to invest can be taken?

 

It clear you don't know much yourself if you can't see the logic in buying players in one installment.

 

There's only one advantage to buying in one go, you will in some situations get a lower price.

 

Its like buying a car on finance, it costs more than if you pay cash. Even 0% finance is typically more expensive as the cost of the finace gets built into the 'price' of the car via lower discounts or such like.

 

Thats how he became a millionaire - buying cheap by using cash rather than accepting higher prices for a payment period.

 

If you think how a lot of football clubs are being run at the moment with debt - an immediate cash injection of £5m may well be more appealling than £7m over 4 years

 

(answering both of you here, not just ronaldo)

 

Agreed. Clubs with cashflow problems will want cash because they could repay their debts/overdraft (which probably have an interest charge of around 6%) and hence get the savings that way, however, it makes no sense for us wanting to pay in cash. We should only take advantage of the situation if the club we're buying the player from is willing to give us a significant cash discount. It should not be our modus operandi because it's incredibly stupid. It's moronic, it's inefficient, it's not diversifying risk, it's really just idiotic. I don't know what else to say.

[Ronaldo]

Agreed? 

[Taylor Swift]

Unless we're loaded with cash or the club we're buying the from is struggling with solvency/liquidity problems, paying in cash is stupid.

 

I'm sure Ashley got rich because he bought in cash and got something like 3-5% discount, whereas if he paid in credit he'd have to pay in 3-6 months. In football, the credit is years, not months, which means the % discount that Ashley must be getting has to be around 15% or 20% for it to be worth it.

[ToonTastic]

Just to add to this, Im sure there is also a rule that you have to pay the first 50% of the transfer straight off only the rest can be in instalments.

[clintdempsey]

I'm sure UEFA has stated that they will implement a rule that will only allow transfer fees to be paid over two years at most.

[Fenham Mag]

New Development :

 

NUFC Statement

 

In relation to recent media speculation following the statement made by the Club on May 9, Newcastle United would like to make it clear that owner Mike Ashley is not looking for his interest free loan to be repaid, or to take any money out of the Club.

 

May 11, 2010

 

http://www.nufc.co.uk/articles/20100511/nufc-statement_2240137_2049785

[Guest johnson293]

New Development :

 

NUFC Statement

 

In relation to recent media speculation following the statement made by the Club on May 9, Newcastle United would like to make it clear that owner Mike Ashley is not looking for his interest free loan to be repaid, or to take any money out of the Club.

 

May 11, 2010

 

http://www.nufc.co.uk/articles/20100511/nufc-statement_2240137_2049785

 

Damn, thought they were gonna clear up the whole 'New Capital Outlay' bit!!   

[QBG]

New Development :

 

NUFC Statement

 

In relation to recent media speculation following the statement made by the Club on May 9, Newcastle United would like to make it clear that owner Mike Ashley is not looking for his interest free loan to be repaid, or to take any money out of the Club.

 

May 11, 2010

 

http://www.nufc.co.uk/articles/20100511/nufc-statement_2240137_2049785

 

Good news, I guess.

[Fenham Mag]

New Development :

 

NUFC Statement

 

In relation to recent media speculation following the statement made by the Club on May 9, Newcastle United would like to make it clear that owner Mike Ashley is not looking for his interest free loan to be repaid, or to take any money out of the Club.

 

May 11, 2010

 

http://www.nufc.co.uk/articles/20100511/nufc-statement_2240137_2049785

 

Damn, thought they were gonna clear up the whole 'New Capital Outlay' bit!! 

 

Same here, got my hopes up.

[ToonTastic]

http://financial-dictionary.thefreedictionary.com/Capital+Outlay

 

So doesn't mean no cash as I thought, means we'll pay for players in full as has since been mentioned on here.

[Colos Short and Curlies]

I'm just thinking that the term 'Capital Outlay' is unlikely to be one that Mike or Deggers would use and it just feels a bit too much like something that has been agreed with the auditors or some financial advisor.

 

Based on that, it can be taken to mean any one of 100 things, but imo the whole sentance alludes to no set budget in place (therefore limited money available and players judged on a case by case basis) and players will be paid for upfront.

[Liam Liam Liam O]

Well that update makes about 18 of the last 22 pages irrelevant.

 

Looking forward to seeing what malandro makes of it.

[jdckelly]

I'm just thinking that the term 'Capital Outlay' is unlikely to be one that Mike or Deggers would use and it just feels a bit too much like something that has been agreed with the auditors or some financial advisor.

 

Based on that, it can be taken to mean any one of 100 things, but imo the whole sentance alludes to no set budget in place (therefore limited money available and players judged on a case by case basis) and players will be paid for upfront.

could be on to something there or being hopelessly optimistic

[Dave]

Well that update makes about 18 of the last 22 pages irrelevant.

 

Looking forward to seeing what malandro makes of it.

 

There's still no money for transfers.

[Liam Liam Liam O]

Well that update makes about 18 of the last 22 pages irrelevant.

 

Looking forward to seeing what malandro makes of it.

 

There's still no money for transfers.

 

If he's confirmed he's taking none out then presumably any additional money generated increases the chances of that not being the case.

 

Something for those talking of boycotting again to think about?

[Ronaldo]

Certainly should be.

[Guest neesy111]

hmmm, i believe this mean's that ashley won't be putting money in or taking it out!

 

so what the club has in the bank will be what it use's for transfers, wages etc! i'm guessing that it'll depend on whether we have a surplus after wages etc to have transfers

[80]

Well that update makes about 18 of the last 22 pages irrelevant.

 

Looking forward to seeing what malandro makes of it.

 

There's still no money for transfers.

 

If he's confirmed he's taking none out then presumably any additional money generated increases the chances of that not being the case.

 

Something for those talking of boycotting again to think about?

 

They have of course 'confirmed' a lot of things in their time, such as when they confirmed they had a policy of deliberately lying to interested parties.

 

It's interesting that they've made this new statement, but still... 'confirmed'.