Finances 09/10 - 'Our vision for the club is to finish 10th or above every year'

[Mick]

If he's taken money out, and he probably has, then they should have told us.

 

I wouldn't have been bothered about that apart from Llambias keep reminding us, wrongly, that Ashley has never taken a penny out of the club. 

[AyeDubbleYoo]

I'd got the cash profit at about £40 million for 10/11 but I realise that's not your main point .

 

There are only 3 possibilities - investment in the squad, expenditure on club facilities or reducing Ashley's loan.

 

 

Don't we also have to consider the fact that in the next few seasons we'll probably go back to making a loss and budget for that? Because we won't sell another player for £30m I mean.

 

I don't know much about business accounting, so humour me please!

[quayside]

I'd got the cash profit at about £40 million for 10/11 but I realise that's not your main point .

 

There are only 3 possibilities - investment in the squad, expenditure on club facilities or reducing Ashley's loan.

 

 

Don't we also have to consider the fact that in the next few seasons we'll probably go back to making a loss and budget for that? Because we won't sell another player for £30m I mean.

 

I don't know much about business accounting, so humour me please!

 

We should be able to avoid losses if we stay in the Premiership and run on our current model.

[Dr Venkman]

I'd got the cash profit at about £40 million for 10/11 but I realise that's not your main point .

 

There are only 3 possibilities - investment in the squad, expenditure on club facilities or reducing Ashley's loan.

 

 

Don't we also have to consider the fact that in the next few seasons we'll probably go back to making a loss and budget for that? Because we won't sell another player for £30m I mean.

 

I don't know much about business accounting, so humour me please!

 

we'll sell tiote for 20m, and that's being conservative

[Mick]

 

 

We should be able to avoid losses if we stay in the Premiership and run on our current model.

 

How is Corporation Tax calculated?  Is it over the tax year or do they take past losses into account?

[Guest Antec]

I'd got the cash profit at about £40 million for 10/11 but I realise that's not your main point .

 

There are only 3 possibilities - investment in the squad, expenditure on club facilities or reducing Ashley's loan.

 

 

Don't we also have to consider the fact that in the next few seasons we'll probably go back to making a loss and budget for that? Because we won't sell another player for £30m I mean.

 

I don't know much about business accounting, so humour me please!

 

I've got a sneaky suspicion that the likes of Tiote and Ben Arfa won't  still be here in 3 seasons time, maybe it's just me

[quayside]

 

 

We should be able to avoid losses if we stay in the Premiership and run on our current model.

 

How is Corporation Tax calculated?  Is it over the tax year or do they take past losses into account?

 

Past losses can be used to offset current and future profits.

[UV]

plus additional income from the installment payments of transfers for Bassong, Martins, Duff, Beye, Zog, Given, Milner (much of which we should still be receiving - let's say the total of those sales were £45m, spread over 5 years, we should be getting £9m for the season).

 

You can forget about seeing any of that.

 

In addition to the loan creditors disclosed in note 12 to the accounts, Mr M J W Ashley advanced £13.25 million to the Group during the year in respect of future amounts receivable from the disposal of players’ registrations. At the same time the Group assigned the corresponding debts due from the purchasing clubs to Mr Ashley.

[Mick]

 

 

Past losses can be used to offset current and future profits.

 

Thought so and that will make is less likely that he's taken it as the club can claim as much interest as he personally could.

[Colos Short and Curlies]

If he's taken money out, and he probably has, then they should have told us.

 

I wouldn't have been bothered about that apart from Llambias keep reminding us, wrongly, that Ashley has never taken a penny out of the club. 

 

which strictly speaking he hasn't as long as the club owe him money (discounting the original purchase of course)

[quayside]

 

 

Past losses can be used to offset current and future profits.

 

Thought so and that will make is less likely that he's taken it as the club can claim as much interest as he personally could.

 

Not sure I know what you mean there Mick.

 

Ashley taking a repayment of his loan doesn't affect our corporation tax because it doesn't affect the profit or loss for the year. He wouldn't pay tax on receiving it either. It is simply a cash transaction.

[UV]

If he's taken money out, and he probably has, then they should have told us.

 

I wouldn't have been bothered about that apart from Llambias keep reminding us, wrongly, that Ashley has never taken a penny out of the club.   

 

which strictly speaking he hasn't as long as the club owe him money (discounting the original purchase of course)

 

However he will not be "paying for his own mistakes" as some are eager to claim.

 

This extract from the 2010 accounts suggest he intended to repay some of his loan last year and this:

 

£28.8 million (30 June 2009 £nil) is secured on future broadcasting income, of which £12.3 million is repayable in August 2010 and the remainder, £16.5 million is repayable after more than one year (see note 13).

[Colos Short and Curlies]

If he's taken money out, and he probably has, then they should have told us.

 

I wouldn't have been bothered about that apart from Llambias keep reminding us, wrongly, that Ashley has never taken a penny out of the club. 

 

which strictly speaking he hasn't as long as the club owe him money (discounting the original purchase of course)

 

However he will not be "paying for his own mistakes" as some are eager to claim.

 

This extract from the 2010 accounts suggest he intended to repay some of his loan last year and this:

 

£28.8 million (30 June 2009 £nil) is secured on future broadcasting income, of which £12.3 million is repayable in August 2010 and the remainder, £16.5 million is repayable after more than one year (see note 13).

 

Tehnically 'after more than one year' doesn't mean in year 2 - it could mean year 3/5/10 or indefinitely.

 

Also, with not being privy to the underlying records I can't say for sure, but the structure of this debt (i.e. payable in 1 year etc) could be linked to something else in the accounts and it may be 'hot air' - i.e. it will be restructured this year and the acounts will show that the amount repayble was not taken up by MA. We'll know by the next accounts

[quayside]

If he's taken money out, and he probably has, then they should have told us.

 

I wouldn't have been bothered about that apart from Llambias keep reminding us, wrongly, that Ashley has never taken a penny out of the club.  

 

which strictly speaking he hasn't as long as the club owe him money (discounting the original purchase of course)

 

Agree.

 

This is the very debate I predicted on another thread  

 

Taking cash out can only be done by dividends, salary, interest on a loan or renting an asset (eg a warehouse) to the club. As at June 2010 Ashley had done none of that. Although Del Llambias is pulling a salary of about £158k, which isn't much in the overall scheme of things.

[AyeDubbleYoo]

I'd got the cash profit at about £40 million for 10/11 but I realise that's not your main point .

 

There are only 3 possibilities - investment in the squad, expenditure on club facilities or reducing Ashley's loan.

 

 

Don't we also have to consider the fact that in the next few seasons we'll probably go back to making a loss and budget for that? Because we won't sell another player for £30m I mean.

 

I don't know much about business accounting, so humour me please!

 

We should be able to avoid losses if we stay in the Premiership and run on our current model.

 

Right, interesting. Is that even without a big player sale like Carroll?

[quayside]

I'd got the cash profit at about £40 million for 10/11 but I realise that's not your main point .

 

There are only 3 possibilities - investment in the squad, expenditure on club facilities or reducing Ashley's loan.

 

 

Don't we also have to consider the fact that in the next few seasons we'll probably go back to making a loss and budget for that? Because we won't sell another player for £30m I mean.

 

I don't know much about business accounting, so humour me please!

 

We should be able to avoid losses if we stay in the Premiership and run on our current model.

 

Right, interesting. Is that even without a big player sale like Carroll?

 

Yes I reckon.

[UV]

If he's taken money out, and he probably has, then they should have told us.

 

I wouldn't have been bothered about that apart from Llambias keep reminding us, wrongly, that Ashley has never taken a penny out of the club.   

 

which strictly speaking he hasn't as long as the club owe him money (discounting the original purchase of course)

 

However he will not be "paying for his own mistakes" as some are eager to claim.

 

This extract from the 2010 accounts suggest he intended to repay some of his loan last year and this:

 

£28.8 million (30 June 2009 £nil) is secured on future broadcasting income, of which £12.3 million is repayable in August 2010 and the remainder, £16.5 million is repayable after more than one year (see note 13).

 

Tehnically 'after more than one year' doesn't mean in year 2 - it could mean year 3/5/10 or indefinitely.

 

Also, with not being privy to the underlying records I can't say for sure, but the structure of this debt (i.e. payable in 1 year etc) could be linked to something else in the accounts and it may be 'hot air' - i.e. it will be restructured this year and the acounts will show that the amount repayble was not taken up by MA. We'll know by the next accounts

1) In another section, the amount due between one and two years is £16.5m, so I put 2 & 2 together.

 

2) Of course, which is why I didn't say he HAS repaid some of his loan, only that it looks like he intended to. Personally I doubt the £35m for Carroll did anything to change his mind.

[AyeDubbleYoo]

I'd got the cash profit at about £40 million for 10/11 but I realise that's not your main point .

 

There are only 3 possibilities - investment in the squad, expenditure on club facilities or reducing Ashley's loan.

 

 

Don't we also have to consider the fact that in the next few seasons we'll probably go back to making a loss and budget for that? Because we won't sell another player for £30m I mean.

 

I don't know much about business accounting, so humour me please!

 

We should be able to avoid losses if we stay in the Premiership and run on our current model.

 

Right, interesting. Is that even without a big player sale like Carroll?

 

Yes I reckon.

 

Cheers.

 

[Colos Short and Curlies]

If he's taken money out, and he probably has, then they should have told us.

 

I wouldn't have been bothered about that apart from Llambias keep reminding us, wrongly, that Ashley has never taken a penny out of the club. 

 

which strictly speaking he hasn't as long as the club owe him money (discounting the original purchase of course)

 

However he will not be "paying for his own mistakes" as some are eager to claim.

 

This extract from the 2010 accounts suggest he intended to repay some of his loan last year and this:

 

£28.8 million (30 June 2009 £nil) is secured on future broadcasting income, of which £12.3 million is repayable in August 2010 and the remainder, £16.5 million is repayable after more than one year (see note 13).

 

Tehnically 'after more than one year' doesn't mean in year 2 - it could mean year 3/5/10 or indefinitely.

 

Also, with not being privy to the underlying records I can't say for sure, but the structure of this debt (i.e. payable in 1 year etc) could be linked to something else in the accounts and it may be 'hot air' - i.e. it will be restructured this year and the acounts will show that the amount repayble was not taken up by MA. We'll know by the next accounts

1) In another section, the amount due between one and two years is £16.5m, so I put 2 & 2 together.

 

2) Of course, which is why I didn't say he HAS repaid some of his loan, only that it looks like he intended to. Personally I doubt the £35m for Carroll did anything to change his mind.

 

Yeah, the only thing the Carroll money sill do from an accountants mind is to use up some tax losses that are approaching their end date. Shouldn't have an impact that anyone here would be intereste in

[leffe186]

I realise this is a highly inaccurate guesstimate, but looking at the 2008 income and just thinking about our 10/11 income and expenditure, I'd have it at:

 

£47 million in TV money as per the Premier League's PDF above. Let's add another £60m in gate receipts, season tickets, merchandising/match day revenue and sponsorship (this is what we had in 2008), £35m from the Carroll sale, plus additional income from the installment payments of transfers for Bassong, Martins, Duff, Beye, Zog, Given, Milner (much of which we should still be receiving - let's say the total of those sales were £45m, spread over 5 years, we should be getting £9m for the season).

 

All of which comes to:

 

TV money £47m

Other income £60m

Player sales £44m

Total = £151m

 

Less the wages for the season (£60m), signings of Tiote (£3m) and Ben Arfa (£5m), new contracts/loan/signing on fees (£10m), running costs and other expenditure (£10m), and we have costs of nearly £88m. That leaves a rough estimate of profit for 10/11 before this summer's transfer activities as being £151m - £88m = £63m.

 

So, where's all this money going?

 

You've missed out a couple of costs:

 

http://img43.imageshack.us/img43/5264/newcastlepl.jpg

 

Matchday and Commercial was not 60M but 58.3M, this went down to 48.4M in 2009 so let's split the difference at 53M.

Amortisation was 18M in 2008 - I'd expect this to be less - let's say 10M.

"Other expenses" in 2008 amounted to 28M.

Plus depreciation/net interest.

 

Still, that is a fair profit. I'd guess that Ashley was trying to put you in a position where you don't have to sell people for 35M to break even. I'd have thought you were there already. Won't be much use if you get relegated again. I simply cannot believe that you won't be buying at least two or three more players (presuming Enrique and Barton go).

 

FWIW I'd keep Enrique to the end of his contract - with your squad so thin in certain places and so "unknown quantity" in others you need the stability. It's not as if there are plenty of left-backs out there, we've got Danny Rose as our back-up FFS.

[quayside]

I realise this is a highly inaccurate guesstimate, but looking at the 2008 income and just thinking about our 10/11 income and expenditure, I'd have it at:

 

£47 million in TV money as per the Premier League's PDF above. Let's add another £60m in gate receipts, season tickets, merchandising/match day revenue and sponsorship (this is what we had in 2008), £35m from the Carroll sale, plus additional income from the installment payments of transfers for Bassong, Martins, Duff, Beye, Zog, Given, Milner (much of which we should still be receiving - let's say the total of those sales were £45m, spread over 5 years, we should be getting £9m for the season).

 

All of which comes to:

 

TV money £47m

Other income £60m

Player sales £44m

Total = £151m

 

Less the wages for the season (£60m), signings of Tiote (£3m) and Ben Arfa (£5m), new contracts/loan/signing on fees (£10m), running costs and other expenditure (£10m), and we have costs of nearly £88m. That leaves a rough estimate of profit for 10/11 before this summer's transfer activities as being £151m - £88m = £63m.

 

So, where's all this money going?

 

You've missed out a couple of costs:

 

http://img43.imageshack.us/img43/5264/newcastlepl.jpg

 

Matchday and Commercial was not 60M but 58.3M, this went down to 48.4M in 2009 so let's split the difference at 53M.

Amortisation was 18M in 2008 - I'd expect this to be less - let's say 10M.

"Other expenses" in 2008 amounted to 28M.

Plus depreciation/net interest.

 

Still, that is a fair profit. I'd guess that Ashley was trying to put you in a position where you don't have to sell people for 35M to break even. I'd have thought you were there already. Won't be much use if you get relegated again. I simply cannot believe that you won't be buying at least two or three more players (presuming Enrique and Barton go).

 

FWIW I'd keep Enrique to the end of his contract - with your squad so thin in certain places and so "unknown quantity" in others you need the stability. It's not as if there are plenty of left-backs out there, we've got Danny Rose as our back-up FFS.

 

I made it a bit less as well but tbf I think he was talking about cash profit rather than accounting profit so amortisation wouldn't count but spend/receipts on players would.

 

I think we would all like you to be right about there being some good players still to arrive, but rampant optimism is in short supply at present. I really can't form a judgement on what Ashley is doing until the full plot unravels. I'm not bothered what he does with excess cash as long as, somehow, our squad keeps on improving (and thats a much debated issue unsurprisingly).

[Dave]

I'd got the cash profit at about £40 million for 10/11 but I realise that's not your main point .

 

There are only 3 possibilities - investment in the squad, expenditure on club facilities or reducing Ashley's loan.

 

What could we possibly spend £40m on?

 

Edit: the Leazes/Milburn expansion cost £42m by the way, albeit 10-12 years ago.

[leffe186]

We went through some pain in 2004-2005 doing this corrective stuff on our squad. Got rid of Postiga, Rebrov, Carr, Anderton, Sullivan, Zamora, Redknapp, Keller. Got in Paul Robinson, Naybet, Edman, Atouba, Mendes, Sean Davis, Carrick, Davenport, Michael Brown, Defoe, El Hamdaoui, Mido, Michael Dawson, Andy Reid. Didn't really make a lot of money on the sales, didn't really spend a lot of money.

 

At the time it was great, because we had been mediocre for ages and shed some big contracts and some old crocks. The problem was as expected, a completely different squad with no idea how they would knit together. Seven players made their debut for us in the first game that year, and we were bricking it. Never looked back, got 9th that year then 5th in the next two seasons.

 

There is still time for you guys to bring players in, but there clearly isn't the goodwill from the fans that there was with us. I just wouldn't abandon all hope yet.

[Guest michaelfoster]

ive got the accounts in front of me but don't properly understand

 

'the company's outstanding loan from M J W Ashley, of £132,144,000 (2009 - £131, 944,000) is unsecured, non interest bearing and repayable on demand'

 

So is that how much he will include in any future sale price of the club?

[Colos Short and Curlies]

ive got the accounts in front of me but don't properly understand

 

'the company's outstanding loan from M J W Ashley, of £132,144,000 (2009 - £131, 944,000) is unsecured, non interest bearing and repayable on demand'

 

So is that how much he will include in any future sale price of the club?

 

Its how much he could include as a balance owed to himself.

 

He disn't have to of course, it's his personal money he has put in, so if he wanted to sell for 50p and personally lose that money forever he could do.

 

He could also of course sell the club but not the debt, and have a balance owed to him over a period of time.

 

Whatever he does will have a bearing on the total value (sales price) of the club when he sells it though