TRon Posted August 27, 2013 Share Posted August 27, 2013 Going over old ground here, but can anybody explain to me why there appears to be this mass assumption that whatever debt gets paid off will be taken off the asking price? It doesn't make any sens to me at all in the real world, where a company's value is based on its assets and profitability mainly. The assets remain the same, and the company would be more profitable for the debt repayments to take place, no? The club's not worth 300m. Huh? My point is this: why would a company with 100 million in debt and posting yearly losses be MORE valuable to a prospective buyer than one (same assets) with no debts and posting a 20 million or so yearly profit? Can see your point but I think the key to this is that it has always been assumed that Ashley would aim at least to get back what he had spent on the club. So say he spent £140 million buying it and then put another £110 in as loan, he's out of pocket by £250 million. So if he's selling the club then the assumption is he's want that sum (at least) for the club to cover his costs. On the other hand if he ever manages to recover all of the debt out of the clubs cash flows then he would only be out of pocket by £140 million. So if he sold the club at that point for say £200 million he's made a £60 million profit overall. And potentially therefore the asking price for the club could be less without the debt. I don't know if that helps... He could, say in 5 years have the debt cleared by running us on the bare minimum...Once its all paid off, why sell? Could be a nice little earner and free sponsorship for his flagship company. The club (business) has paid for itself and is now passing profit his way without having to do much. The next TV deal will only get bigger imho...BT are going to push sky and with the economy slowly picking up it could be a good earner for Ashley. He could be here 20 years or more. I've been saying that for a while. If you have a business earning you twenty mil a year, why would you get rid? When you're a billionaire I would think there are faster ways to make money than put your money in a football club. Link to post Share on other sites More sharing options...
henke Posted August 27, 2013 Share Posted August 27, 2013 Going over old ground here, but can anybody explain to me why there appears to be this mass assumption that whatever debt gets paid off will be taken off the asking price? It doesn't make any sens to me at all in the real world, where a company's value is based on its assets and profitability mainly. The assets remain the same, and the company would be more profitable for the debt repayments to take place, no? The club's not worth 300m. Huh? My point is this: why would a company with 100 million in debt and posting yearly losses be MORE valuable to a prospective buyer than one (same assets) with no debts and posting a 20 million or so yearly profit? Can see your point but I think the key to this is that it has always been assumed that Ashley would aim at least to get back what he had spent on the club. So say he spent £140 million buying it and then put another £110 in as loan, he's out of pocket by £250 million. So if he's selling the club then the assumption is he's want that sum (at least) for the club to cover his costs. On the other hand if he ever manages to recover all of the debt out of the clubs cash flows then he would only be out of pocket by £140 million. So if he sold the club at that point for say £200 million he's made a £60 million profit overall. And potentially therefore the asking price for the club could be less without the debt. I don't know if that helps... He could, say in 5 years have the debt cleared by running us on the bare minimum...Once its all paid off, why sell? Could be a nice little earner and free sponsorship for his flagship company. The club (business) has paid for itself and is now passing profit his way without having to do much. The next TV deal will only get bigger imho...BT are going to push sky and with the economy slowly picking up it could be a good earner for Ashley. He could be here 20 years or more. I've been saying that for a while. If you have a business earning you twenty mil a year, why would you get rid? When you're a billionaire I would think there are faster ways to make money than put your money in a football club. Undoubtedly. But at the minute, and for the foreseeable, we're making him £20mil a year. Link to post Share on other sites More sharing options...
cp40 Posted August 27, 2013 Share Posted August 27, 2013 Going over old ground here, but can anybody explain to me why there appears to be this mass assumption that whatever debt gets paid off will be taken off the asking price? It doesn't make any sens to me at all in the real world, where a company's value is based on its assets and profitability mainly. The assets remain the same, and the company would be more profitable for the debt repayments to take place, no? The club's not worth 300m. Huh? My point is this: why would a company with 100 million in debt and posting yearly losses be MORE valuable to a prospective buyer than one (same assets) with no debts and posting a 20 million or so yearly profit? Can see your point but I think the key to this is that it has always been assumed that Ashley would aim at least to get back what he had spent on the club. So say he spent £140 million buying it and then put another £110 in as loan, he's out of pocket by £250 million. So if he's selling the club then the assumption is he's want that sum (at least) for the club to cover his costs. On the other hand if he ever manages to recover all of the debt out of the clubs cash flows then he would only be out of pocket by £140 million. So if he sold the club at that point for say £200 million he's made a £60 million profit overall. And potentially therefore the asking price for the club could be less without the debt. I don't know if that helps... He could, say in 5 years have the debt cleared by running us on the bare minimum...Once its all paid off, why sell? Could be a nice little earner and free sponsorship for his flagship company. The club (business) has paid for itself and is now passing profit his way without having to do much. The next TV deal will only get bigger imho...BT are going to push sky and with the economy slowly picking up it could be a good earner for Ashley. He could be here 20 years or more. I've been saying that for a while. If you have a business earning you twenty mil a year, why would you get rid? When you're a billionaire I would think there are faster ways to make money than put your money in a football club. Undoubtedly. But at the minute, and for the foreseeable, we're making him £20mil a year. My worse fear is hes gonna hang around until hes had every £ hes put in back out- then sell for profit. Link to post Share on other sites More sharing options...
TRon Posted August 27, 2013 Share Posted August 27, 2013 Going over old ground here, but can anybody explain to me why there appears to be this mass assumption that whatever debt gets paid off will be taken off the asking price? It doesn't make any sens to me at all in the real world, where a company's value is based on its assets and profitability mainly. The assets remain the same, and the company would be more profitable for the debt repayments to take place, no? The club's not worth 300m. Huh? My point is this: why would a company with 100 million in debt and posting yearly losses be MORE valuable to a prospective buyer than one (same assets) with no debts and posting a 20 million or so yearly profit? Can see your point but I think the key to this is that it has always been assumed that Ashley would aim at least to get back what he had spent on the club. So say he spent £140 million buying it and then put another £110 in as loan, he's out of pocket by £250 million. So if he's selling the club then the assumption is he's want that sum (at least) for the club to cover his costs. On the other hand if he ever manages to recover all of the debt out of the clubs cash flows then he would only be out of pocket by £140 million. So if he sold the club at that point for say £200 million he's made a £60 million profit overall. And potentially therefore the asking price for the club could be less without the debt. I don't know if that helps... He could, say in 5 years have the debt cleared by running us on the bare minimum...Once its all paid off, why sell? Could be a nice little earner and free sponsorship for his flagship company. The club (business) has paid for itself and is now passing profit his way without having to do much. The next TV deal will only get bigger imho...BT are going to push sky and with the economy slowly picking up it could be a good earner for Ashley. He could be here 20 years or more. I've been saying that for a while. If you have a business earning you twenty mil a year, why would you get rid? When you're a billionaire I would think there are faster ways to make money than put your money in a football club. Undoubtedly. But at the minute, and for the foreseeable, we're making him £20mil a year. But if he gets a chance to get his money back and perhaps make a little profit as well I think he'd take it. Link to post Share on other sites More sharing options...
henke Posted August 27, 2013 Share Posted August 27, 2013 I hope you're right. Link to post Share on other sites More sharing options...
Unbelievable Posted August 27, 2013 Share Posted August 27, 2013 Going over old ground here, but can anybody explain to me why there appears to be this mass assumption that whatever debt gets paid off will be taken off the asking price? It doesn't make any sens to me at all in the real world, where a company's value is based on its assets and profitability mainly. The assets remain the same, and the company would be more profitable for the debt repayments to take place, no? The club's not worth 300m. Huh? My point is this: why would a company with 100 million in debt and posting yearly losses be MORE valuable to a prospective buyer than one (same assets) with no debts and posting a 20 million or so yearly profit? Can see your point but I think the key to this is that it has always been assumed that Ashley would aim at least to get back what he had spent on the club. So say he spent £140 million buying it and then put another £110 in as loan, he's out of pocket by £250 million. So if he's selling the club then the assumption is he's want that sum (at least) for the club to cover his costs. On the other hand if he ever manages to recover all of the debt out of the clubs cash flows then he would only be out of pocket by £140 million. So if he sold the club at that point for say £200 million he's made a £60 million profit overall. And potentially therefore the asking price for the club could be less without the debt. I don't know if that helps... He could, say in 5 years have the debt cleared by running us on the bare minimum...Once its all paid off, why sell? Could be a nice little earner and free sponsorship for his flagship company. The club (business) has paid for itself and is now passing profit his way without having to do much. The next TV deal will only get bigger imho...BT are going to push sky and with the economy slowly picking up it could be a good earner for Ashley. He could be here 20 years or more. I've been saying that for a while. If you have a business earning you twenty mil a year, why would you get rid? The sale value would massively go up. My point exactly. A profit making advertisement vehicle for his primary concern, and as if that's not enough, he gets to take the piss out of us, who dare(d) call him names. With more money coming into the game, the asking price will only go up as lins as we're in the Premiership, hence our obvious "ambition".. Link to post Share on other sites More sharing options...
TRon Posted August 27, 2013 Share Posted August 27, 2013 Going over old ground here, but can anybody explain to me why there appears to be this mass assumption that whatever debt gets paid off will be taken off the asking price? It doesn't make any sens to me at all in the real world, where a company's value is based on its assets and profitability mainly. The assets remain the same, and the company would be more profitable for the debt repayments to take place, no? The club's not worth 300m. Huh? My point is this: why would a company with 100 million in debt and posting yearly losses be MORE valuable to a prospective buyer than one (same assets) with no debts and posting a 20 million or so yearly profit? Can see your point but I think the key to this is that it has always been assumed that Ashley would aim at least to get back what he had spent on the club. So say he spent £140 million buying it and then put another £110 in as loan, he's out of pocket by £250 million. So if he's selling the club then the assumption is he's want that sum (at least) for the club to cover his costs. On the other hand if he ever manages to recover all of the debt out of the clubs cash flows then he would only be out of pocket by £140 million. So if he sold the club at that point for say £200 million he's made a £60 million profit overall. And potentially therefore the asking price for the club could be less without the debt. I don't know if that helps... He could, say in 5 years have the debt cleared by running us on the bare minimum...Once its all paid off, why sell? Could be a nice little earner and free sponsorship for his flagship company. The club (business) has paid for itself and is now passing profit his way without having to do much. The next TV deal will only get bigger imho...BT are going to push sky and with the economy slowly picking up it could be a good earner for Ashley. He could be here 20 years or more. I've been saying that for a while. If you have a business earning you twenty mil a year, why would you get rid? The sale value would massively go up. My point exactly. A profit making advertisement vehicle for his primary concern, and as if that's not enough, he gets to take the piss out of us, who dare(d) call him names. With more money coming into the game, the asking price will only go up as lins as we're in the Premiership, hence our obvious "ambition".. Again, if he really wanted to use the football club to advertise his brand, wouldn't a successful football club be a much better advert? That's the reason the bigger brands tend to pay big money to the more successful clubs. Link to post Share on other sites More sharing options...
Unbelievable Posted August 27, 2013 Share Posted August 27, 2013 Going over old ground here, but can anybody explain to me why there appears to be this mass assumption that whatever debt gets paid off will be taken off the asking price? It doesn't make any sens to me at all in the real world, where a company's value is based on its assets and profitability mainly. The assets remain the same, and the company would be more profitable for the debt repayments to take place, no? The club's not worth 300m. Huh? My point is this: why would a company with 100 million in debt and posting yearly losses be MORE valuable to a prospective buyer than one (same assets) with no debts and posting a 20 million or so yearly profit? Can see your point but I think the key to this is that it has always been assumed that Ashley would aim at least to get back what he had spent on the club. So say he spent £140 million buying it and then put another £110 in as loan, he's out of pocket by £250 million. So if he's selling the club then the assumption is he's want that sum (at least) for the club to cover his costs. On the other hand if he ever manages to recover all of the debt out of the clubs cash flows then he would only be out of pocket by £140 million. So if he sold the club at that point for say £200 million he's made a £60 million profit overall. And potentially therefore the asking price for the club could be less without the debt. I don't know if that helps... He could, say in 5 years have the debt cleared by running us on the bare minimum...Once its all paid off, why sell? Could be a nice little earner and free sponsorship for his flagship company. The club (business) has paid for itself and is now passing profit his way without having to do much. The next TV deal will only get bigger imho...BT are going to push sky and with the economy slowly picking up it could be a good earner for Ashley. He could be here 20 years or more. I've been saying that for a while. If you have a business earning you twenty mil a year, why would you get rid? When you're a billionaire I would think there are faster ways to make money than put your money in a football club. Whilst that's true, how many of those investments would provide the added benefit of giving you a free advertising vehicle in one of the biggest sports leagues in the world? Plus, at let's say 20 million profit a year, that still represents a ROI of about 10% per year, and that's before getting into the considerable asset appreciation. Link to post Share on other sites More sharing options...
Unbelievable Posted August 27, 2013 Share Posted August 27, 2013 Going over old ground here, but can anybody explain to me why there appears to be this mass assumption that whatever debt gets paid off will be taken off the asking price? It doesn't make any sens to me at all in the real world, where a company's value is based on its assets and profitability mainly. The assets remain the same, and the company would be more profitable for the debt repayments to take place, no? The club's not worth 300m. Huh? My point is this: why would a company with 100 million in debt and posting yearly losses be MORE valuable to a prospective buyer than one (same assets) with no debts and posting a 20 million or so yearly profit? Can see your point but I think the key to this is that it has always been assumed that Ashley would aim at least to get back what he had spent on the club. So say he spent £140 million buying it and then put another £110 in as loan, he's out of pocket by £250 million. So if he's selling the club then the assumption is he's want that sum (at least) for the club to cover his costs. On the other hand if he ever manages to recover all of the debt out of the clubs cash flows then he would only be out of pocket by £140 million. So if he sold the club at that point for say £200 million he's made a £60 million profit overall. And potentially therefore the asking price for the club could be less without the debt. I don't know if that helps... He could, say in 5 years have the debt cleared by running us on the bare minimum...Once its all paid off, why sell? Could be a nice little earner and free sponsorship for his flagship company. The club (business) has paid for itself and is now passing profit his way without having to do much. The next TV deal will only get bigger imho...BT are going to push sky and with the economy slowly picking up it could be a good earner for Ashley. He could be here 20 years or more. I've been saying that for a while. If you have a business earning you twenty mil a year, why would you get rid? The sale value would massively go up. My point exactly. A profit making advertisement vehicle for his primary concern, and as if that's not enough, he gets to take the p*ss out of us, who dare(d) call him names. With more money coming into the game, the asking price will only go up as lins as we're in the Premiership, hence our obvious "ambition".. Again, if he really wanted to use the football club to advertise his brand, wouldn't a successful football club be a much better advert? That's the reason the bigger brands tend to pay big money to the more successful clubs. He bought arguably one of the five biggest clubs in England at that time at a fraction of the cost of the others. Link to post Share on other sites More sharing options...
Wullie Posted August 27, 2013 Share Posted August 27, 2013 Going over old ground here, but can anybody explain to me why there appears to be this mass assumption that whatever debt gets paid off will be taken off the asking price? It doesn't make any sens to me at all in the real world, where a company's value is based on its assets and profitability mainly. The assets remain the same, and the company would be more profitable for the debt repayments to take place, no? The club's not worth 300m. Huh? My point is this: why would a company with 100 million in debt and posting yearly losses be MORE valuable to a prospective buyer than one (same assets) with no debts and posting a 20 million or so yearly profit? Can see your point but I think the key to this is that it has always been assumed that Ashley would aim at least to get back what he had spent on the club. So say he spent £140 million buying it and then put another £110 in as loan, he's out of pocket by £250 million. So if he's selling the club then the assumption is he's want that sum (at least) for the club to cover his costs. On the other hand if he ever manages to recover all of the debt out of the clubs cash flows then he would only be out of pocket by £140 million. So if he sold the club at that point for say £200 million he's made a £60 million profit overall. And potentially therefore the asking price for the club could be less without the debt. I don't know if that helps... He could, say in 5 years have the debt cleared by running us on the bare minimum...Once its all paid off, why sell? Could be a nice little earner and free sponsorship for his flagship company. The club (business) has paid for itself and is now passing profit his way without having to do much. The next TV deal will only get bigger imho...BT are going to push sky and with the economy slowly picking up it could be a good earner for Ashley. He could be here 20 years or more. I've been saying that for a while. If you have a business earning you twenty mil a year, why would you get rid? The sale value would massively go up. My point exactly. A profit making advertisement vehicle for his primary concern, and as if that's not enough, he gets to take the piss out of us, who dare(d) call him names. With more money coming into the game, the asking price will only go up as lins as we're in the Premiership, hence our obvious "ambition".. Again, if he really wanted to use the football club to advertise his brand, wouldn't a successful football club be a much better advert? That's the reason the bigger brands tend to pay big money to the more successful clubs. In proportion to the amount of money he thinks he'd need and the lack of guarantee of success? Nah. Link to post Share on other sites More sharing options...
Darth Crooks Posted August 27, 2013 Share Posted August 27, 2013 It's not like they are an external sponsor either. He is getting free publicity for his wideboy brand; and even had the fucking cheek to try the same in renaming the stadium and telling us that it will make us money. Which unbelievably some people swallowed along with accepting any other liberty they've taken. Link to post Share on other sites More sharing options...
huss9 Posted August 27, 2013 Share Posted August 27, 2013 people give him credit for his interest-free loans, when the fact is the money he would have to pay for his advertising would exceed any interest he would be owed. Link to post Share on other sites More sharing options...
maze Posted August 27, 2013 Share Posted August 27, 2013 Some of you guys talks as if Newcastle is guaranteed to stay in the EPL, or even guaranteed to get promoted the next year post relegation... So those £20 million figures or something you talk about are only valid under certain circumstances - circumstances which are well on their way to disappear as they are in the hands of a clueless Kinnear, leading an even more clueless Pardew' who's trying his hardest to convince 11 players to stand up for a regime that's at best decribed as <insert fitting words> … Link to post Share on other sites More sharing options...
TRon Posted August 27, 2013 Share Posted August 27, 2013 Going over old ground here, but can anybody explain to me why there appears to be this mass assumption that whatever debt gets paid off will be taken off the asking price? It doesn't make any sens to me at all in the real world, where a company's value is based on its assets and profitability mainly. The assets remain the same, and the company would be more profitable for the debt repayments to take place, no? The club's not worth 300m. Huh? My point is this: why would a company with 100 million in debt and posting yearly losses be MORE valuable to a prospective buyer than one (same assets) with no debts and posting a 20 million or so yearly profit? Can see your point but I think the key to this is that it has always been assumed that Ashley would aim at least to get back what he had spent on the club. So say he spent £140 million buying it and then put another £110 in as loan, he's out of pocket by £250 million. So if he's selling the club then the assumption is he's want that sum (at least) for the club to cover his costs. On the other hand if he ever manages to recover all of the debt out of the clubs cash flows then he would only be out of pocket by £140 million. So if he sold the club at that point for say £200 million he's made a £60 million profit overall. And potentially therefore the asking price for the club could be less without the debt. I don't know if that helps... He could, say in 5 years have the debt cleared by running us on the bare minimum...Once its all paid off, why sell? Could be a nice little earner and free sponsorship for his flagship company. The club (business) has paid for itself and is now passing profit his way without having to do much. The next TV deal will only get bigger imho...BT are going to push sky and with the economy slowly picking up it could be a good earner for Ashley. He could be here 20 years or more. I've been saying that for a while. If you have a business earning you twenty mil a year, why would you get rid? The sale value would massively go up. My point exactly. A profit making advertisement vehicle for his primary concern, and as if that's not enough, he gets to take the p*ss out of us, who dare(d) call him names. With more money coming into the game, the asking price will only go up as lins as we're in the Premiership, hence our obvious "ambition".. Again, if he really wanted to use the football club to advertise his brand, wouldn't a successful football club be a much better advert? That's the reason the bigger brands tend to pay big money to the more successful clubs. He bought arguably one of the five biggest clubs in England at that time at a fraction of the cost of the others. You can't really compare to the others as there was never really any hard interest in anyone buying Newcastle. Plenty looked at the books and decided despite being a fraction of the cost it was still too expensive. Link to post Share on other sites More sharing options...
timeEd32 Posted August 27, 2013 Share Posted August 27, 2013 Some of you guys talks as if Newcastle is guaranteed to stay in the EPL, or even guaranteed to get promoted the next year post relegation... So those £20 million figures or something you talk about are only valid under certain circumstances - circumstances which are well on their way to disappear as they are in the hands of a clueless Kinnear, leading an even more clueless Pardew' who's trying his hardest to convince 11 players to stand up for a regime that's at best decribed as <insert fitting words> … This is why he won't stay forever. It's too risky and he knows it. If relegation didn't exist we'd be fucked. We may also be fucked because of it. Basically we're just going to take it from all sides as long as he's here. Link to post Share on other sites More sharing options...
Unbelievable Posted August 27, 2013 Share Posted August 27, 2013 Going over old ground here, but can anybody explain to me why there appears to be this mass assumption that whatever debt gets paid off will be taken off the asking price? It doesn't make any sens to me at all in the real world, where a company's value is based on its assets and profitability mainly. The assets remain the same, and the company would be more profitable for the debt repayments to take place, no? The club's not worth 300m. Huh? My point is this: why would a company with 100 million in debt and posting yearly losses be MORE valuable to a prospective buyer than one (same assets) with no debts and posting a 20 million or so yearly profit? Can see your point but I think the key to this is that it has always been assumed that Ashley would aim at least to get back what he had spent on the club. So say he spent £140 million buying it and then put another £110 in as loan, he's out of pocket by £250 million. So if he's selling the club then the assumption is he's want that sum (at least) for the club to cover his costs. On the other hand if he ever manages to recover all of the debt out of the clubs cash flows then he would only be out of pocket by £140 million. So if he sold the club at that point for say £200 million he's made a £60 million profit overall. And potentially therefore the asking price for the club could be less without the debt. I don't know if that helps... He could, say in 5 years have the debt cleared by running us on the bare minimum...Once its all paid off, why sell? Could be a nice little earner and free sponsorship for his flagship company. The club (business) has paid for itself and is now passing profit his way without having to do much. The next TV deal will only get bigger imho...BT are going to push sky and with the economy slowly picking up it could be a good earner for Ashley. He could be here 20 years or more. I've been saying that for a while. If you have a business earning you twenty mil a year, why would you get rid? The sale value would massively go up. My point exactly. A profit making advertisement vehicle for his primary concern, and as if that's not enough, he gets to take the p*ss out of us, who dare(d) call him names. With more money coming into the game, the asking price will only go up as lins as we're in the Premiership, hence our obvious "ambition".. Again, if he really wanted to use the football club to advertise his brand, wouldn't a successful football club be a much better advert? That's the reason the bigger brands tend to pay big money to the more successful clubs. He bought arguably one of the five biggest clubs in England at that time at a fraction of the cost of the others. You can't really compare to the others as there was never really any hard interest in anyone buying Newcastle. Plenty looked at the books and decided despite being a fraction of the cost it was still too expensive. How does that work? My original point was he bought one of the biggest clubs in the league at a fraction of the cost of the other top clubs, which made it attractive to him as a advertising vehicle that paid for himself, and where the fans wouldn't demand the investment required to compete at the highest level, as we weren't exactly successful before he came in. It was a perfect acquisition from his perspective. If he was interested in winning things and willing to spend big money, he probably would have looked elsewhere, like the others you refer to did. Link to post Share on other sites More sharing options...
Unbelievable Posted August 27, 2013 Share Posted August 27, 2013 Some of you guys talks as if Newcastle is guaranteed to stay in the EPL, or even guaranteed to get promoted the next year post relegation... So those £20 million figures or something you talk about are only valid under certain circumstances - circumstances which are well on their way to disappear as they are in the hands of a clueless Kinnear, leading an even more clueless Pardew' who's trying his hardest to convince 11 players to stand up for a regime that's at best decribed as <insert fitting words> … This is why he won't stay forever. It's too risky and he knows it. If relegation didn't exist we'd be f***ed. We may also be f***ed because of it. Basically we're just going to take it from all sides as long as he's here. If anything, the relative ease of coming back up last time may have made him more reckless, not less. Besides, why spend or sack your manager in the summer in preparation of the new season, when you have January to get some business done if you really have to. Link to post Share on other sites More sharing options...
merlin Posted August 28, 2013 Share Posted August 28, 2013 Some of you guys talks as if Newcastle is guaranteed to stay in the EPL, or even guaranteed to get promoted the next year post relegation... So those £20 million figures or something you talk about are only valid under certain circumstances - circumstances which are well on their way to disappear as they are in the hands of a clueless Kinnear, leading an even more clueless Pardew' who's trying his hardest to convince 11 players to stand up for a regime that's at best decribed as <insert fitting words> … This - if people do continue to drop their Season tickets and support falls, Pardew or JFK stay and the club goes down, he only has one season to protect the TV income....all highly possible right now. Link to post Share on other sites More sharing options...
Guest Roger Kint Posted August 28, 2013 Share Posted August 28, 2013 Going over old ground here, but can anybody explain to me why there appears to be this mass assumption that whatever debt gets paid off will be taken off the asking price? It doesn't make any sens to me at all in the real world, where a company's value is based on its assets and profitability mainly. The assets remain the same, and the company would be more profitable for the debt repayments to take place, no? The club's not worth 300m. Huh? My point is this: why would a company with 100 million in debt and posting yearly losses be MORE valuable to a prospective buyer than one (same assets) with no debts and posting a 20 million or so yearly profit? Can see your point but I think the key to this is that it has always been assumed that Ashley would aim at least to get back what he had spent on the club. So say he spent £140 million buying it and then put another £110 in as loan, he's out of pocket by £250 million. So if he's selling the club then the assumption is he's want that sum (at least) for the club to cover his costs. On the other hand if he ever manages to recover all of the debt out of the clubs cash flows then he would only be out of pocket by £140 million. So if he sold the club at that point for say £200 million he's made a £60 million profit overall. And potentially therefore the asking price for the club could be less without the debt. I don't know if that helps... He could, say in 5 years have the debt cleared by running us on the bare minimum...Once its all paid off, why sell? Could be a nice little earner and free sponsorship for his flagship company. The club (business) has paid for itself and is now passing profit his way without having to do much. The next TV deal will only get bigger imho...BT are going to push sky and with the economy slowly picking up it could be a good earner for Ashley. He could be here 20 years or more. I've been saying that for a while. If you have a business earning you twenty mil a year, why would you get rid? When you're a billionaire I would think there are faster ways to make money than put your money in a football club. Undoubtedly. But at the minute, and for the foreseeable, we're making him £20mil a year. We arent making him £20m a year though at the minute. He may be repaying himself ££ but thats like saying you going to the cashpoint is making you money Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted August 28, 2013 Share Posted August 28, 2013 Mike Ashley seems fairly unlikely to 'make' any money from owning us TBH, unless a money-crazed buyer pops up. He's already many millions down. Obviously he has benefited in other ways, the promotion of SD etc. As Roger says, you would be silly to invest a football club if your main objective was to make money. It's incredibly expensive, the return on investment is hard to predict, there are much better ways to invest the amount of money Mike Ashley had. Link to post Share on other sites More sharing options...
loki679 Posted August 28, 2013 Share Posted August 28, 2013 Mike Ashley seems fairly unlikely to 'make' any money from owning us TBH, unless a money-crazed buyer pops up. He's already many millions down. Obviously he has benefited in other ways, the promotion of SD etc. As Roger says, you would be silly to invest a football club if your main objective was to make money. It's incredibly expensive, the return on investment is hard to predict, there are much better ways to invest the amount of money Mike Ashley had. From what we've heard the main objective was to promote SD and in that it's been very successful. Link to post Share on other sites More sharing options...
Beren Posted August 28, 2013 Share Posted August 28, 2013 Intrinsically very difficult to quantify the benefit derived from his advertising/marketing at the club, tbh. I was always taught that if you pay 50p to two different marketing companies, you don't know to which company the sale is attributable. Maybe he didn't go here purely for the money, but it seems pretty damn likely that money is his only real concern now as far as the club is concerned. Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted August 28, 2013 Share Posted August 28, 2013 Mike Ashley seems fairly unlikely to 'make' any money from owning us TBH, unless a money-crazed buyer pops up. He's already many millions down. Obviously he has benefited in other ways, the promotion of SD etc. As Roger says, you would be silly to invest a football club if your main objective was to make money. It's incredibly expensive, the return on investment is hard to predict, there are much better ways to invest the amount of money Mike Ashley had. From what we've heard the main objective was to promote SD and in that it's been very successful. I guess so, but then again, what does £200m+ in marketing buy you? Sponsorship of the Premier League? Set up your own TV channel? Billboard advertising at every ground in the country? I still think Mike Ashley's original motivation was just to fulfill an ambition of owning a club, have some fun on the side, and then also to promote his goods overseas. Problem is that everything went to shit so quickly. Link to post Share on other sites More sharing options...
Toonpack Posted August 28, 2013 Share Posted August 28, 2013 Mike Ashley seems fairly unlikely to 'make' any money from owning us TBH, unless a money-crazed buyer pops up. He's already many millions down. Obviously he has benefited in other ways, the promotion of SD etc. As Roger says, you would be silly to invest a football club if your main objective was to make money. It's incredibly expensive, the return on investment is hard to predict, there are much better ways to invest the amount of money Mike Ashley had. From what we've heard the main objective was to promote SD and in that it's been very successful. I guess so, but then again, what does £200m+ in marketing buy you? Sponsorship of the Premier League? Set up your own TV channel? Billboard advertising at every ground in the country? I still think Mike Ashley's original motivation was just to fulfill an ambition of owning a club, have some fun on the side, and then also to promote his goods overseas. Problem is that everything went to s*** so quickly. I think that's the truth of it, he's now in a place where it's absolutely no "fun", in fact he probably hates it, the stick he gets, the agents and all the shit that goes around (who's fault that is, is irrelevant) and continuing, with any ambition, is likely to be nothing but very expensive. I reckon he's got to the stage of "fuck it" to the point that he wants his wedge back asap at which point he'll get shot if he can, but until then it won't cost him a penny if he can possibly avoid it. We're screwed in the meantime. Bit like buying your dream house but then finding out it's a total money-pit and the neighbours hate you. Link to post Share on other sites More sharing options...
merlin Posted August 28, 2013 Share Posted August 28, 2013 Mike Ashley seems fairly unlikely to 'make' any money from owning us TBH, unless a money-crazed buyer pops up. He's already many millions down. Obviously he has benefited in other ways, the promotion of SD etc. As Roger says, you would be silly to invest a football club if your main objective was to make money. It's incredibly expensive, the return on investment is hard to predict, there are much better ways to invest the amount of money Mike Ashley had. From what we've heard the main objective was to promote SD and in that it's been very successful. I guess so, but then again, what does £200m+ in marketing buy you? Sponsorship of the Premier League? Set up your own TV channel? Billboard advertising at every ground in the country? I still think Mike Ashley's original motivation was just to fulfill an ambition of owning a club, have some fun on the side, and then also to promote his goods overseas. Problem is that everything went to s*** so quickly. .....and whose fault was that.. Link to post Share on other sites More sharing options...
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