NUFC summer spend quite well explained...

[UV]

Out of curiosity, what do you assume would have happened had Ashley not came in blind and covered that? That money would have been owed to somebody and given we were losing £40m a year at the time, feck knows how that would have been paid off.

 

The stadium loan was only triggered by change of control, which is a pretty standard clause. With regards to the cash crunch, the club would still have found a buyer, but for significantly less than Ashley paid for it.

 

Going back to the question earlier, that UV kindly skirted, what possible scenario do you suggest Shepherd could have had for paying off the stadium debt (and the extra £16m loan) when it became due in 2016?

 

The change of control clause only brought the repayment date forward by 9 years. I'd be really impressed if someone could explain how Shepherd was planning to generate £50m of surplus revenue during that period (bear in mind that he constantly took out of the club during his tenure).

 

I wasn't aware I skirted anything. Are you seriously trying to suggest that it would have been necessary to be debt free by 2016? That no-one would have been willing to lend any money at all to a club which had never defaulted on any loans in the past and was consistently in the top 20 revenue generating clubs in the world? Not being able to significantly increase the debt is one debatable point, not being able to loan any money at all is beyond even your usual level of ridiculous doom-mongering for the inevitable destruction of the club under the previous owners.

[Stu]

Either way you phrase it, I'm failing to see this fire sale/giveaway.

 

Record British Transfer Fee for Carroll.

 

Money back for a player who was unwilling to sign a deal when the club thought they were close to outgrowing him.

 

Money back for star defender with only one year left on contract and wanted out.

 

Free transfer given to a player who had fallen out with the owner/MD.

 

Nae smoke.

[UV]

We were told he was gambling last January too.

 

Looks like won 1, lost 1.

 

If the game is to stay in the Premier League while making profits on transfers, then yes it's played 2, won 1, lost 1.

 

If the game is to finish as high in the Premier League as you can with the resources available, then it's played 2, lost 2.

[David28]

Either way you phrase it, I'm failing to see this fire sale/giveaway.

 

Record British Transfer Fee for Carroll.

 

Money back for a player who was unwilling to sign a deal when the club thought they were close to outgrowing him.

 

Money back for star defender with only one year left on contract and wanted out.

 

Free transfer given to a player who had fallen out with the owner/MD.

 

Nae smoke.

 

Yet all those players would have stayed if Ashley had shown any sign of ambition.

[Stu]

We were told he was gambling last January too.

 

Looks like won 1, lost 1.

 

If the game is to stay in the Premier League while making profits on transfers, then yes it's played 2, won 1, lost 1.

 

If the game is to finish as high in the Premier League as you can with the resources available, then it's played 2, lost 2.

 

A few million aside, what's the difference between finishing midtable and finishing midtable? If you're not in Europe (and not likely to compete with those that are challenging for it), so long as you're comfortably clear of relegation...it's not worth shouting about if you're 8th or 14th. However, if you use these years to reshape the squad, reshape the club (adopt a new mentality, allow a manager to fully bed in) then it can pay dividends after a couple of seasons. See "Robson, R 2000/01" as an example.

[Guest]

Either way you phrase it, I'm failing to see this fire sale/giveaway.

 

Record British Transfer Fee for Carroll.

 

Money back for a player who was unwilling to sign a deal when the club thought they were close to outgrowing him.

 

Money back for star defender with only one year left on contract and wanted out.

 

Free transfer given to a player who had fallen out with the owner/MD.

 

Nae smoke.

 

Yet all those players would have stayed if Ashley had shown any sign of ambition.

 

Just out of interest, do you think our incomings this summer would have been any different had those 4 stayed? I think those 4 added to Cabaye, Ba, Marveaux & Obertan could have been looking top 6. They've all left for much much higher paid jobs, no one put a gun to their heads and told forced them to go to Liverpool, not accept new contracts, etc.

 

 

[Matt]

Out of curiosity, what do you assume would have happened had Ashley not came in blind and covered that? That money would have been owed to somebody and given we were losing £40m a year at the time, feck knows how that would have been paid off.

 

The stadium loan was only triggered by change of control, which is a pretty standard clause. With regards to the cash crunch, the club would still have found a buyer, but for significantly less than Ashley paid for it.

 

Going back to the question earlier, that UV kindly skirted, what possible scenario do you suggest Shepherd could have had for paying off the stadium debt (and the extra £16m loan) when it became due in 2016?

 

The change of control clause only brought the repayment date forward by 9 years. I'd be really impressed if someone could explain how Shepherd was planning to generate £50m of surplus revenue during that period (bear in mind that he constantly took out of the club during his tenure).

 

The loan was amortising, therefore would have been fully repaid by maturity- I'm happy to be corrected here as I'm working purely from beer-addled memory- but I recall the balance reducing over the years. What should be noted is that the overall debt position worsened 2004-07 due to increasing overdraft.

 

As for the 'what happens' question- I do not think we'd have survived the banking crunch and Barclays would have put sufficient pressure on the club to accept new investment or to sell the club to a new owner who would ensure they got their cash back. Banks were pulling overdrafts for fun in 08/09, we only kept ours because Ashley pledged personal security.

[Guest Heneage]

Either way you phrase it, I'm failing to see this fire sale/giveaway.

 

Record British Transfer Fee for Carroll.

 

Money back for a player who was unwilling to sign a deal when the club thought they were close to outgrowing him.

 

Money back for star defender with only one year left on contract and wanted out.

 

Free transfer given to a player who had fallen out with the owner/MD.

 

Nae smoke.

 

Yet all those players would have stayed if Ashley had shown any sign of ambition.

Seriously, Yohan Cabaye is a French international midfielder. How many times has Jose Enrique played for Spain? Even Marveaux played for France U21's more times than Jose did for Spain's U21's.

 

I'm all for ambition, but Jose has a bloody cheek to say we've shown no ambition by replacing Nolan with Cabaye. They are opposite ends of the spectrum, and that's before you consider Jose has made little to no dent internationally, having only really had one top quality season with us.

[Dave]

When did he say that like? Oh aye, he didn't.

[Guest Heneage]

When did he say that like? Oh aye, he didn't.

Sorry he said;

 

"they don't want spend in the club and bring quality players that's why everybody go."

 

So he's saying the aforementioned aren't quality.

[quayside]

As I said above it was 2016. How could the debt be affordable if the club was leaking cash at an alarming rate? Affordable means sustainable out of the clubs existing and future cash flows. Up until that point the club had simply plugged cash flow leaks with more loans at ever increasing interest rates.

 

It was affordable because it was taken out to finance the expansion of the stadium to 52,000 seats and a significant increase in our corporate hospitality capabilities- this was drawing in considerably more than the cash required to service the debt. If net-net the expansion makes money, it doesn't matter what the position is for the overall business. You need to look at that in isolation as a sensible move for the business.

 

We had not (as far as I am aware) plugged cash flow gaps with additional loans, although the club was in a very worrying position with regards to its overdraft (and only a banker's sneeze away from being in a very uncomfortable position)- which is why I still find it odd that Ashley paid so much for the club when it was headed for a very rocky 12 months cash-flow wise.

 

 

I don't think anyone would dispute the financial merits of the decision to expand the stadium, it was a truly excellent move in every respect. But in order to be able to afford to service a loan you have to be generating positive cash flows from your day to day business. And at the time Ashley took over we were not doing that.

 

Contrary to what you say we did plug cash flow leaks with other loans and this was not purely done through an overdraft it was done through a variety of loans. As I said earlier these were at increasing rates of interest. The proof is in the 2007 accounts and we had collected loans as follows:

 

 

- £42.5 million at 7.65% interest secured on future season ticket and hospitality income

- £13.1 million at 8.55% interest secured on future sponsorship income

- E4.5 million at interest of LIBOR +2.25% secured on the first team training ground

- £8 million at11.72% interest secured on future broadcasting income

- £1.5 million secured as a second charge on the training ground

 

plus an overdraft of £11 million.

 

Whatever method Ashley used to value the club it didn't have anything whatsoever to do with his perception of it's ability to generate positive cash flows. His lack of due diligence would have left him unaware of the true state of the finances.

[UV]

We were told he was gambling last January too.

 

Looks like won 1, lost 1.

 

If the game is to stay in the Premier League while making profits on transfers, then yes it's played 2, won 1, lost 1.

 

If the game is to finish as high in the Premier League as you can with the resources available, then it's played 2, lost 2.

 

A few million aside, what's the difference between finishing midtable and finishing midtable? If you're not in Europe (and not likely to compete with those that are challenging for it), so long as you're comfortably clear of relegation...it's not worth shouting about if you're 8th or 14th. However, if you use these years to reshape the squad, reshape the club (adopt a new mentality, allow a manager to fully bed in) then it can pay dividends after a couple of seasons. See "Robson, R 2000/01" as an example.

 

I think that says a lot about you as a supporter that you don't see the difference in finishing 8th or 14th tbh. Ignoring insignificant amounts of additional revenue which are larger than our normal transfer spend, one not insignificant difference for the club would be the perception of the players in the squad or of potential signings of the likelihood of the team progressing and getting into Europe in the following season. Others are the increased ability to attract more and better paid advertising, sell corporate boxes, fill the ground, sell shirts, etc, etc.

 

I'm looking at the list of sales & players released by Robson in those years, and with the possible exception of Domi & Goma I'm failing to see the quality of players like Milner, N'Zogbia, Given, Bassong, Martins, Carroll, Nolan, Barton & Enrique being sold for massive profits, leaving for more ambitious clubs, or being released for being "trouble makers". There is not a shadow of doubt in my mind that if Ashley had owned the club in 2000/01 that we would have sold Shearer, and Robson would have been out the door for being awkward and too demanding if he didn't walk first.

[AyeDubbleYoo]

As I said above it was 2016. How could the debt be affordable if the club was leaking cash at an alarming rate? Affordable means sustainable out of the clubs existing and future cash flows. Up until that point the club had simply plugged cash flow leaks with more loans at ever increasing interest rates.

 

It was affordable because it was taken out to finance the expansion of the stadium to 52,000 seats and a significant increase in our corporate hospitality capabilities- this was drawing in considerably more than the cash required to service the debt. If net-net the expansion makes money, it doesn't matter what the position is for the overall business. You need to look at that in isolation as a sensible move for the business.

 

We had not (as far as I am aware) plugged cash flow gaps with additional loans, although the club was in a very worrying position with regards to its overdraft (and only a banker's sneeze away from being in a very uncomfortable position)- which is why I still find it odd that Ashley paid so much for the club when it was headed for a very rocky 12 months cash-flow wise.

 

 

I don't think anyone would dispute the financial merits of the decision to expand the stadium, it was a truly excellent move in every respect. But in order to be able to afford to service a loan you have to be generating positive cash flows from your day to day business. And at the time Ashley took over we were not doing that.

 

Contrary to what you say we did plug cash flow leaks with other loans and this was not purely done through an overdraft it was done through a variety of loans. As I said earlier these were at increasing rates of interest. The proof is in the 2007 accounts and we had collected loans as follows:

 

 

- £42.5 million at 7.65% interest secured on future season ticket and hospitality income

- £13.1 million at 8.55% interest secured on future sponsorship income

- E4.5 million at interest of LIBOR +2.25% secured on the first team training ground

- £8 million at11.72% interest secured on future broadcasting income

- £1.5 million secured as a second charge on the training ground

 

plus an overdraft of £11 million.

 

Whatever method Ashley used to value the club it didn't have anything whatsoever to do with his perception of it's ability to generate positive cash flows. His lack of due diligence would have left him unaware of the true state of the finances.

 

Quayside in very sensible post non-shocker.

[AyeDubbleYoo]

Either way you phrase it, I'm failing to see this fire sale/giveaway.

 

Record British Transfer Fee for Carroll.

 

Money back for a player who was unwilling to sign a deal when the club thought they were close to outgrowing him.

 

Money back for star defender with only one year left on contract and wanted out.

 

Free transfer given to a player who had fallen out with the owner/MD.

 

Nae smoke.

 

I think this too basically, I think most of our outgoings are explicable, and not done purely for profit. Yes we could have held onto Carroll, but the money was too good for most clubs to turn down. Yes we might have kept Nolan, but we were right to to match his West Ham deal. Enrique basically got too good to stay at his current club at the same time his contract was coming up.

[BottledDog]

...I'm looking at the list of sales & players released by Robson in those years, and with the possible exception of Domi & Goma I'm failing to see the quality of players like Milner, N'Zogbia, Given, Bassong, Martins, Carroll, Nolan, Barton & Enrique being sold for massive profits, leaving for more ambitious clubs, or being released for being "trouble makers". There is not a shadow of doubt in my mind that if Ashley had owned the club in 2000/01 that we would have sold Shearer, and Robson would have been out the door for being awkward and too demanding if he didn't walk first.

 

Woodgate? Should Robson have walked then, losing our best defender? As for Shearer, it was Robson who was more than willing to see him off to Liverpool for £2m so doubt he'd have walked for that one either.

 

As I said above it was 2016. How could the debt be affordable if the club was leaking cash at an alarming rate? Affordable means sustainable out of the clubs existing and future cash flows. Up until that point the club had simply plugged cash flow leaks with more loans at ever increasing interest rates.

 

It was affordable because it was taken out to finance the expansion of the stadium to 52,000 seats and a significant increase in our corporate hospitality capabilities- this was drawing in considerably more than the cash required to service the debt. If net-net the expansion makes money, it doesn't matter what the position is for the overall business. You need to look at that in isolation as a sensible move for the business.

 

We had not (as far as I am aware) plugged cash flow gaps with additional loans, although the club was in a very worrying position with regards to its overdraft (and only a banker's sneeze away from being in a very uncomfortable position)- which is why I still find it odd that Ashley paid so much for the club when it was headed for a very rocky 12 months cash-flow wise.

 

 

I don't think anyone would dispute the financial merits of the decision to expand the stadium, it was a truly excellent move in every respect. But in order to be able to afford to service a loan you have to be generating positive cash flows from your day to day business. And at the time Ashley took over we were not doing that.

 

Contrary to what you say we did plug cash flow leaks with other loans and this was not purely done through an overdraft it was done through a variety of loans. As I said earlier these were at increasing rates of interest. The proof is in the 2007 accounts and we had collected loans as follows:

 

 

- £42.5 million at 7.65% interest secured on future season ticket and hospitality income

- £13.1 million at 8.55% interest secured on future sponsorship income

- E4.5 million at interest of LIBOR +2.25% secured on the first team training ground

- £8 million at11.72% interest secured on future broadcasting income

- £1.5 million secured as a second charge on the training ground

 

plus an overdraft of £11 million.

 

Whatever method Ashley used to value the club it didn't have anything whatsoever to do with his perception of it's ability to generate positive cash flows. His lack of due diligence would have left him unaware of the true state of the finances.

 

 

Interesting stuff. Had no idea on the actual rates of the loans.

[HawK]

Either way you phrase it, I'm failing to see this fire sale/giveaway.

 

Record British Transfer Fee for Carroll.

 

Money back for a player who was unwilling to sign a deal when the club thought they were close to outgrowing him.

 

Money back for star defender with only one year left on contract and wanted out.

 

Free transfer given to a player who had fallen out with the owner/MD.

 

Nae smoke.

 

I think this too basically, I think most of our outgoings are explicable, and not done purely for profit. Yes we could have held onto Carroll, but the money was too good for most clubs to turn down. Yes we might have kept Nolan, but we were right to to match his West Ham deal. Enrique basically got too good to stay at his current club at the same time his contract was coming up.

 

Every player that has left recently from our first team should have started this season, however I do agree only with the Nolan sale in terms of the fee and player's ability. As has been pointed out, if the chairmen had the ambition of other chairmen we wouldn't be a million miles away from what Liverpool have done.

[AyeDubbleYoo]

Either way you phrase it, I'm failing to see this fire sale/giveaway.

 

Record British Transfer Fee for Carroll.

 

Money back for a player who was unwilling to sign a deal when the club thought they were close to outgrowing him.

 

Money back for star defender with only one year left on contract and wanted out.

 

Free transfer given to a player who had fallen out with the owner/MD.

 

Nae smoke.

 

I think this too basically, I think most of our outgoings are explicable, and not done purely for profit. Yes we could have held onto Carroll, but the money was too good for most clubs to turn down. Yes we might have kept Nolan, but we were right to to match his West Ham deal. Enrique basically got too good to stay at his current club at the same time his contract was coming up.

 

Every player that has left recently from our first team should have started this season, however I do agree only with the Nolan sale in terms of the fee and player's ability. As has been pointed out, if the chairmen had the ambition of other chairmen we wouldn't be a million miles away from what Liverpool have done.

 

Liverpool's signings have been massive and overprices though, there's no way we have the spending power to match that. Unless Ashley used his own money of course, which he obviously won't do.

[Stu]

...I'm looking at the list of sales & players released by Robson in those years, and with the possible exception of Domi & Goma I'm failing to see the quality of players like Milner, N'Zogbia, Given, Bassong, Martins, Carroll, Nolan, Barton & Enrique being sold for massive profits, leaving for more ambitious clubs, or being released for being "trouble makers". There is not a shadow of doubt in my mind that if Ashley had owned the club in 2000/01 that we would have sold Shearer, and Robson would have been out the door for being awkward and too demanding if he didn't walk first.

 

Woodgate? Should Robson have walked then, losing our best defender? As for Shearer, it was Robson who was more than willing to see him off to Liverpool for £2m so doubt he'd have walked for that one either.

 

 

To be fair to UV, he was talking about the early Robson years pre-2001/02 and the Champs League qualification.

 

I think that says a lot about you as a supporter that you don't see the difference in finishing 8th or 14th tbh. Ignoring insignificant amounts of additional revenue which are larger than our normal transfer spend, one not insignificant difference for the club would be the perception of the players in the squad or of potential signings of the likelihood of the team progressing and getting into Europe in the following season. Others are the increased ability to attract more and better paid advertising, sell corporate boxes, fill the ground, sell shirts, etc, etc.

 

I suppose it does. If truth be told, I much preferred the rollercoaster of the relegation season (including it's heart-breaking last-day relegation) to the dross of midtable-apathy that was served up in the years prior. Perhaps the relegation was eased slightly by the hope that we could get rid of the 'deadwood' and come back up in a stronger position, but I'll never know as we came back up comfortably in an entertaining first attempt (thankfully).

 

Alternatively, it shows that I'm the type of supporter who doesn't demand success and improvement immediately so long as I feel as though there's something tangible happening long-term.

 

Now, I might be being fed a pack of lies and I'm dreaming a dream that will never see the light of day, that's what a lot of the posters on here keep ramming down my throat; however, it makes going to the match more enjoyable and I can put each result into context

 

I'm looking at the list of sales & players released by Robson in those years, and with the possible exception of Domi & Goma I'm failing to see the quality of players like Milner, N'Zogbia, Given, Bassong, Martins, Carroll, Nolan, Barton & Enrique being sold for massive profits, leaving for more ambitious clubs, or being released for being "trouble makers". There is not a shadow of doubt in my mind that if Ashley had owned the club in 2000/01 that we would have sold Shearer, and Robson would have been out the door for being awkward and too demanding if he didn't walk first.

 

Of the players that have left, what have they done? Milner, Bassong and (belatedly) N'Zogbia are the only three who look to have improved their standing in the game.

 

Martins? Given? Nolan? Hardly setting the world alight in their reduced premiership roles.

 

Regardless, Pardew (hopefully) has the opportunity to shape the squad to his own way (granted, he's facing some financial restrictions) which would make a nice change: NUFC in stability shocker.

[Dr Venkman]

Wasn't it simply that this money was the overdraft Ashley had to cover and so made it that it had to be repaid after one year.

 

Maybe true, fact still stands that Ashley is paying the debt down.

 

 

 

 

Yep. At least we know the reason why Ashley hasn't invested more money into the squad after selling Carroll. He's taking his money back basically.

 

and the sooner the better

 

I assume that you mean the sooner the better because then we could be sold?

 

absolutely - or perhaps we can start, you know, trying to do well on the pitch.

[Matt]

I don't think anyone would dispute the financial merits of the decision to expand the stadium, it was a truly excellent move in every respect. But in order to be able to afford to service a loan you have to be generating positive cash flows from your day to day business. And at the time Ashley took over we were not doing that.

 

I'm not sure if you're saying funding the stadium with debt a good move or not. I think we were better off with a bigger stadium and £40m or so of debt on the balance sheet. As long as we were continuing to more or less fill the ground, that element of the business would be net cash positive.

 

Interesting stuff on the other loans, would be interesting to know which forays into the transfer market they financed.

[quayside]

I don't think anyone would dispute the financial merits of the decision to expand the stadium, it was a truly excellent move in every respect. But in order to be able to afford to service a loan you have to be generating positive cash flows from your day to day business. And at the time Ashley took over we were not doing that.

 

I'm not sure if you're saying funding the stadium with debt a good move or not. I think we were better off with a bigger stadium and £40m or so of debt on the balance sheet. As long as we were continuing to more or less fill the ground, that element of the business would be net cash positive.

 

Interesting stuff on the other loans, would be interesting to know which forays into the transfer market they financed.

 

I am saying the business case for the stadium expansion was excellent, and using debt to fund it was the only solution at the time. However as we reached the 2005-2007 era the club, as an entity, was suffering from financial mismanagement and wasn't generating positive cash flows, so servicing the debt was an issue. 

[Spider Jerusalem]

Either way you phrase it, I'm failing to see this fire sale/giveaway.

 

Record British Transfer Fee for Carroll.

 

Money back for a player who was unwilling to sign a deal when the club thought they were close to outgrowing him.

 

Money back for star defender with only one year left on contract and wanted out.

 

Free transfer given to a player who had fallen out with the owner/MD.

 

Nae smoke.

 

I was quite clerly having a laugh / trolling (hence the trollface in the initial post).  However, the profit that has been made in transfers (even before the sale of Andy Caroll) since Ashley took over would have taken care of the stadium loan.  If the same transfers had been made under the previous regime the only place the fees would have ended up is in annual 'premiums' for the shareholders, which is the same place any 'profit' went from previous years when the club was being loaded with debt.

 

Can anyone explain where cash goes from annual amortisation (in thick person speak preferably) as this is a major drain on our accounts year on year?

[Matt]

Fair enough, you can look at it both ways.

 

I still cannot fathom how a man who built a business worth over a billion could be so negligent to barely even look at the public accounts, never mind undertake due diligence.

 

We've all been pissed one night and bought a load of shite online. Maybe this is the equivalent for a billionaire.

[quayside]

Fair enough, you can look at it both ways.

 

I still cannot fathom how a man who built a business worth over a billion could be so negligent to barely even look at the public accounts, never mind undertake due diligence.

 

We've all been p*ssed one night and bought a load of s**** online. Maybe this is the equivalent for a billionaire.

 

Sounds about right! I think he found himself with a shed load of cash after the SD float and fancied the idea of owning a football club so he could show off to his mates (such as Paul Kemsley). He found a willing seller in SJH and just wanted to get it done.

[Spider Jerusalem]

We've all been pissed one night and bought a load of shite online.

 

Loved to have seen the reaction to the hypothetical e-mail he would have received confirming his purchase.  'FUCK!!! CANCEL.  CANCEL.  CANCEL.  CAN'T CANCEL.  CAN'T FUCKING CANCEL.  FUCK, FUCK, FUUUUUCCCCKKKKK!  Wor lass is going to have me scrotum for a purse for this one.'