NUFC summer spend quite well explained...

[buzza]

Don't normally think much of the Mirror's Simon Bird but his article on our summer spen is quite well explained:

http://www.mirrorfootball.co.uk/opinion/columnists/simon-bird/How-Newcastle-chiefs-Derek-Llambias-and-Mike-Ashley-can-already-claim-they-ve-reinvested-the-Andy-Carroll-cash-in-the-squad-Simon-Bird-column-article789260.html

 

There will be one big question Alan Pardew will have to answer at the end of the month following his first summer in charge.

Is Newcastle’s squad stronger than in May?

There are other questions looming in the background that managing director Derek Llambias will also be judged on, by his boss Mike Ashley.

Is Newcastle’s balance sheet looking healthier than it was last May? Is the wage bill still under control? Are United breaking even, or even making a small profit yet?

Will Ashley have to put in a few more million to keep the club running? (these sums have amounted to tens of millions in recent seasons and not surprisingly he doesn’t want to add to his £160 million of interest free loans)

The conflicting questions do not sit happily together and are at the heart of most clubs’ transfer dealing, not just Newcastle.

Pardew and his players will want investment, competition for places and fresh talent brought in.

Llambias, while obviously wanting the team to improve, will try to keep a lid on spending.

Pardew wants a left back (Erik Pieters is favourite, but Aly Cissokho the other option being scouted) and a striker (Modibo Maiga is the man and wants to join).

If he gets those targets, and no other crucial first teamers leave – and that means Fabricio Coloccini and Joey Barton – Pardew may be able to answer “yes” to questions about whether the squad has been strengthened.

With time running out now is the time for Newcastle to push through both deals and get their buying out of the way.

Llambias and Ashley have proved tough operators screwing the maximum price out of rivals for the likes of Andy Carroll – £35 million, with £30 million immediately put in United’s bank.

But with that kind of cash in the bank they may have to pay slightly over the odds for Pieters and Maiga to get the deals over the line.

Winning the North East derby has raised the mood on Tyneside and created a positive momentum, and new arrivals would fuel that feel good factor, so it is in United’s interests to act quickly.

What we don’t want to see is Newcastle scrambling on transfer deadline day for new bodies.

The old trick of bidding big, but not quite big enough, for a star player (I’m thinking Charles N’Zogbia last January), losing out, then saying “oh, well, you see the money was there, we were ambitious, but we just couldn’t get the deals done,” simply won’t wash.

The other big question United have to answer is whether they have spent the Andy Carroll money.

Newcastle do not accept the old notion of “spent” when doing their sums.

Spent for most clubs and fans means headline fees.

Newcastle take a more accountancy led version, representing the sort of money that has been committed over the first year of a signing.

They believe it gives a more rounded picture of the actual cost of a deal. Naturally it adds up, conveniently you might say, to a great deal more than “headline fees” which fans usually use as their benchmark.

United’s sums include transfer fees (Newcastle pay it all up front unlike most clubs who pay in instalments), agent fees (which can be millions ie 10-14 per cent of the entire worth of a contract), signing on fees, and the first year pay of a new recruits.

For instance Yohan Cabaye cost £5million. But add agent fees of, say £1million, and first year wages of say around £3million, Newcastle will have it down as a £9million deal for this season.

Demba Ba may appear to be a “free” transfer. But agents fees, a signing on fee and first year of wages could, using Newcastle’s calculation method, make it a deal costing £6 million this season.

When the cost of this summer’s deals are added up this way, assuming they spend on the new left back and striker (headline fees for £6 million and £7 million) mentioned, those sums, on my calculations, add up around £47 million.

Take away the money banked from selling Kevin Nolan and Jose Enrique (around £11 million) and the season wages saved for the pair (£4 million) and that total is around £15 million.

Which leaves a commitment in wages and fees on this summer’s deals of slightly more than £30 million.

These educated guesses will be fleshed out when club’s accounts are published in the coming months, but United might just, being charitable with the figures, be able to say they spent the Andy Carroll cash like they said “in wages and fees.”

Of course the wheeling and dealing is far from over, and surprise deals may materialise.

In the eyes of many fans, even with two more new signings in, the club could have spent more.

But the only proof of whether United are stronger will ultimately come on the pitch, not through arguments over the minutae of accounting.

 

[David28]

Haven't even read the article, but to say Cabaye cost us 9 mio is a bit stupid, really.

 

We could also say that Carroll has brought us 38 mio or something like that considering that his wages were off the table.

[TRon]

I read the article and it's nothing I didn't know already. We should still have cash to spend with the tv money which hasn't been accounted for in that piece. There's money there, we are just fucking about getting it spent in a piss poor attempt to save a million here, a million there.

[BottledDog]

Haven't even read the article, but to say Cabaye cost us 9 mio is a bit stupid, really.

 

We could also say that Carroll has brought us 38 mio or something like that considering that his wages were off the table.

 

Except it wouldn't be, it would be £30m (the fee we get this year) plus the year of wages (2 to 2.5m) so £32.5m.

 

Strangely for an article looking at it from Ashleys point of view, while it includes Carroll, it doesn't include HBA (which is £5.75m plus the £1-2m loan fee, plus agent fee, plus 1 year of wages) totaling at a guess £11m, leaving our commitment for the year at over £40m if we bring in those players.

[Stu]

Haven't even read the article, but to say Cabaye cost us 9 mio is a bit stupid, really.

We could also say that Carroll has brought us 38 mio or something like that considering that his wages were off the table.

 

He does

[Stu]

I read the article and it's nothing I didn't know already. We should still have cash to spend with the tv money which hasn't been accounted for in that piece. There's money there, we are just fucking about getting it spent in a piss poor attempt to save a million here, a million there.

 

Does the TV money not cover our existing wage bill?

[TRon]

I read the article and it's nothing I didn't know already. We should still have cash to spend with the tv money which hasn't been accounted for in that piece. There's money there, we are just fucking about getting it spent in a piss poor attempt to save a million here, a million there.

 

Does the TV money not cover our existing wage bill?

 

I thought gate money and sponsorship would be used to cover that.

[Guest Pedro_de_geordieo]

Ticket money must just cover the electric bills

[Stu]

I read the article and it's nothing I didn't know already. We should still have cash to spend with the tv money which hasn't been accounted for in that piece. There's money there, we are just fucking about getting it spent in a piss poor attempt to save a million here, a million there.

 

Does the TV money not cover our existing wage bill?

 

I thought gate money and sponsorship would be used to cover that.

 

Combination of the two? What are our gate incomes these days anyways?

[Colocho]

He's forgetting Tiote's new contract. Imagine a few of the years of that are coming out of the Carroll money?

[NewJerseyMag]

Ticket money must just cover the electric bills

 

Exactly. You cant just count next years (new) salaries against the 30 million Carroll money. Once you do that, all of the other income and expenditures for the year should be counted.

 

This would then be a Profit and Loss Account Statement.

 

What they are trying to do is assume everyone is a thick as mince.

 

If anything, given the player sales, I would suggest the 30 Million hasn't been touched.

[Stu]

Ticket money must just cover the electric bills

 

Exactly. You cant just count next years (new) salaries against the 30 million Carroll money. Once you do that, all of the other income and expenditures for the year should be counted.

 

This would then be a Profit and Loss Account Statement.

 

What they are trying to do is assume everyone is a thick as mince.

 

[TRon]

I read the article and it's nothing I didn't know already. We should still have cash to spend with the tv money which hasn't been accounted for in that piece. There's money there, we are just fucking about getting it spent in a piss poor attempt to save a million here, a million there.

 

Does the TV money not cover our existing wage bill?

 

I thought gate money and sponsorship would be used to cover that.

 

Combination of the two? What are our gate incomes these days anyways?

 

No idea, I just know we have a big stadium which is more full than most others and we've reduced our wage bill quite drastically over recent years.

[Stu]

I read the article and it's nothing I didn't know already. We should still have cash to spend with the tv money which hasn't been accounted for in that piece. There's money there, we are just fucking about getting it spent in a piss poor attempt to save a million here, a million there.

 

Does the TV money not cover our existing wage bill?

 

I thought gate money and sponsorship would be used to cover that.

 

Combination of the two? What are our gate incomes these days anyways?

 

No idea, I just know we have a big stadium which is more full than most others and we've reduced our wage bill quite drastically over recent years.

 

Weren't we in a situation where wages >80% turnover a year or two ago?

In fact, didn't this go higher (wages exceed turnover) in our Championship year?

 

May not be exact with the figures.

[cp40]

I read the article and it's nothing I didn't know already. We should still have cash to spend with the tv money which hasn't been accounted for in that piece. There's money there, we are just fucking about getting it spent in a piss poor attempt to save a million here, a million there.

 

Does the TV money not cover our existing wage bill?

 

I thought gate money and sponsorship would be used to cover that.

 

Combination of the two? What are our gate incomes these days anyways?

 

No idea, I just know we have a big stadium which is more full than most others and we've reduced our wage bill quite drastically over recent years.

 

Weren't we in a situation where wages >80% turnover a year or two ago?

In fact, didn't this go higher (wages exceed turnover) in our Championship year?

 

May not be exact with the figures.

 

 

my turn to get the popcorn

[Guest H09]

Wait a second, Simon Bird gets paid to just guess this shit?

 

Man I need to get his job.

[TRon]

I read the article and it's nothing I didn't know already. We should still have cash to spend with the tv money which hasn't been accounted for in that piece. There's money there, we are just fucking about getting it spent in a piss poor attempt to save a million here, a million there.

 

Does the TV money not cover our existing wage bill?

 

I thought gate money and sponsorship would be used to cover that.

 

Combination of the two? What are our gate incomes these days anyways?

 

No idea, I just know we have a big stadium which is more full than most others and we've reduced our wage bill quite drastically over recent years.

 

Weren't we in a situation where wages >80% turnover a year or two ago?

In fact, didn't this go higher (wages exceed turnover) in our Championship year?

 

May not be exact with the figures.

 

Things can't have been that bad, we were slapping in £10m offers for N'Zogbia the day after selling Andy Carroll.

[HawK]

I read the article and it's nothing I didn't know already. We should still have cash to spend with the tv money which hasn't been accounted for in that piece. There's money there, we are just f***ing about getting it spent in a p*ss poor attempt to save a million here, a million there.

 

Does the TV money not cover our existing wage bill?

 

For any of the doubters, cast an eye of the previous available NUFC finances in black and white, you will see there is rather more money to spend than we are being lead to believe. That said, what is happening is the loan(s) put into the club from Ashley are simply being repaid, but rather than being transparent, we are being fed lies and being taken for fools by being told the money will be spent on players. Had the club been honest, I think we would all have been a lot happier about what is happening now with our eyes open. I've posted this previously with links to proofs of finances on another thread a month ago.

 

Ashley is simply reducing the debt of the club to make it a more attractive asset to sell.

[AyeDubbleYoo]

The accounts will show what profit or loss the club has made and how much we spend on wages and anything else.

 

All this attempting to allocate specific income to specific outgoings is pointless IMO, and nobody knows how the club are budgeting for wages.

 

Until NUFC runs in sustainable way over an extended period of time, and Ashley is satisfied that he isn't having to subsidise us, he will reduce costs at the rate he sees fit. Don't see the point in worrying about it, the accounts will speak for themselves. 

[HawK]

The accounts will show what profit or loss the club has made and how much we spend on wages and anything else.

 

All this attempting to allocate specific income to specific outgoings is pointless IMO, and nobody knows how the club are budgeting for wages.

 

Until NUFC runs in sustainable way over an extended period of time, and Ashley is satisfied that he isn't having to subsidise us, he will reduce costs at the rate he sees fit. Don't see the point in worrying about it, the accounts will speak for themselves. 

 

Yes - but with no interest bearing debts, as a premier league club, our turnover through TV money, gate receipts and merchandising is more than enough to cover wages and several million in transfers each year. This is evidenced by the massive wage bill reductions over the past 2 financial years results that we have available to us. Since then it is in plain sight that the wage bill decreased sharply in the summer of last season - granted the turnover will have decreased, but the wages now would not be too dissimilar to that of when we played in the Championship.

 

Can you understand how some people are frustrated if we are told money will be spent on players, then it is not?

[AyeDubbleYoo]

The accounts will show what profit or loss the club has made and how much we spend on wages and anything else.

 

All this attempting to allocate specific income to specific outgoings is pointless IMO, and nobody knows how the club are budgeting for wages.

 

Until NUFC runs in sustainable way over an extended period of time, and Ashley is satisfied that he isn't having to subsidise us, he will reduce costs at the rate he sees fit. Don't see the point in worrying about it, the accounts will speak for themselves.  

 

Yes - but with no interest bearing debts, as a premier league club, our turnover through TV money, gate receipts and merchandising is more than enough to cover wages and several million in transfers each year. This is evidenced by the massive wage bill reductions over the past 2 financial years results that we have available to us. Since then it is in plain sight that the wage bill decreased sharply in the summer of last season - granted the turnover will have decreased, but the wages now would not be too dissimilar to that of when we played in the Championship.

 

Can you understand how some people are frustrated if we are told money will be spent on players, then it is not?

 

In answer to that question, of course I can, I want more spending too. And I've always said it was a big mistake for Pardew to promise the Carroll money would all go on the team.

 

As to the first bit of your post, what I'm arguing is that the accounts will speak for themselves, so I'm not going to second guess it. I don't have our recent seasons accounts to hand, but I'm guessing the last 5-10 years don't show regular profits. Until they do then we need to reduce costs or find someone who is prepared to keep lending us money.

 

If we are making regular losses then our turnover clearly isn't enough to cover wages and transfers without borrowing more money. That's a fact. You could argue that borrowing more money is fine, but Ashley doesn't see it that way.

[HawK]

I think, despite our differing points of view, the biggest problem isn't money, it's the lies fed to the supporters from the owner all the way down to the manager. I peddle this line a lot, but proven in a court to deliberately mislead supporters. There is so much they COULD say; i.e. we have the money to spend, but we will not be held to ransom for players because of this and the financial future of the club depends on this. Or like I said there is not money to spend it's paying off loans. Or, the money has been spent on the players you miserable lot, here is the breakdown., etc.

[TherealnorthernTOON]

Thats the way I see things aswell Ian W. Hope there will be positive signs when the accounts come out.

[Stu]

The accounts will show what profit or loss the club has made and how much we spend on wages and anything else.

 

All this attempting to allocate specific income to specific outgoings is pointless IMO, and nobody knows how the club are budgeting for wages.

 

Until NUFC runs in sustainable way over an extended period of time, and Ashley is satisfied that he isn't having to subsidise us, he will reduce costs at the rate he sees fit. Don't see the point in worrying about it, the accounts will speak for themselves. 

 

Yes - but with no interest bearing debts, as a premier league club, our turnover through TV money, gate receipts and merchandising is more than enough to cover wages and several million in transfers each year. This is evidenced by the massive wage bill reductions over the past 2 financial years results that we have available to us. Since then it is in plain sight that the wage bill decreased sharply in the summer of last season - granted the turnover will have decreased, but the wages now would not be too dissimilar to that of when we played in the Championship.

 

 

No overdraft?

 

Can you understand how some people are frustrated if we are told money will be spent on players, then it is not?

 

Yohann Cabaye

Demba Ba

Gabriel Obertan

Sylvain Marveaux

Mehedi Abeid

 

 

Looks like 5 new players to me

[Stu]

I peddle this line a lot, but proven in a court to deliberately mislead supporters.

 

I think if you peddle this line a lot, then you're no worse than the owner and managing exec that you detest so much.