TRon Posted January 15, 2014 Share Posted January 15, 2014 If he had not tried to buy the club on the sly I am sure, even from his sick bed, Shepherd would have been only too happy to tell him about any problems with the club to try and put him off buying it. Wasn't the club up for sale unofficially regardless? I'm pretty sure there were a few others who had a look at the books and decided against buying. If Hall and Shepherd didn't want to sell the club, Ashley could never have bought it. Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted January 15, 2014 Share Posted January 15, 2014 Have always wondered about the wisdom of using player amortisation to indicate the financial health of a club when what people really want to see is the actual profit/loss. I don't really have any knowledge or a view on this, but why is player amortisation such a bad thing to include? If you spend loads of money on an asset that quickly becomes worthless, that's bad right? If Mike Ashley could have easily refinanced the debt at favourable terms, why didn't he? Link to post Share on other sites More sharing options...
Interpolic Posted January 15, 2014 Share Posted January 15, 2014 Have always wondered about the wisdom of using player amortisation to indicate the financial health of a club when what people really want to see is the actual profit/loss. I don't really have any knowledge or a view on this, but why is player amortisation such a bad thing to include? If you spend loads of money on an asset that quickly becomes worthless, that's bad right? If Mike Ashley could have easily refinanced the debt at favourable terms, why didn't he? It just seems really arbitrary to me, forgotten how it works exactly but you'll have a player in the squad who was brought through the youth system who is worth millions but not in the eyes of the books or a £10m purchase that loses £2m value every year over the course of their 5-year contract. Someone remind me exactly how it works and I'll remember why I disagree with it. Link to post Share on other sites More sharing options...
Toonpack Posted January 15, 2014 Share Posted January 15, 2014 If he had not tried to buy the club on the sly I am sure, even from his sick bed, Shepherd would have been only too happy to tell him about any problems with the club to try and put him off buying it. Wasn't the club up for sale unofficially regardless? I'm pretty sure there were a few others who had a look at the books and decided against buying. If Hall and Shepherd didn't want to sell the club, Ashley could never have bought it. The club spent £6 Million (I believe it was iirc) in the financial year previous to Ashley buying it in activities related to trying to sell it. Dividends were drying up/had dried up, they wanted out. Link to post Share on other sites More sharing options...
Interpolic Posted January 15, 2014 Share Posted January 15, 2014 If you spend loads of money on an asset that quickly becomes worthless, that's bad right? FWIW it doesn't seem like anything as subjective as this (i.e. related to football performance/reality) is considered, it's just a figure based on cost that decreases through the course of the contract, whether relevant or not, as if the player's a piece of equipment that cannot actually increase in value (IIRC). Link to post Share on other sites More sharing options...
Unbelievable Posted January 15, 2014 Share Posted January 15, 2014 We've been here many a time before and yet quayside in particular keeps banging this technically insolvent/would have done a Leeds/Portsmouth drum. Good post UV, as per. Link to post Share on other sites More sharing options...
Unbelievable Posted January 15, 2014 Share Posted January 15, 2014 If he had not tried to buy the club on the sly I am sure, even from his sick bed, Shepherd would have been only too happy to tell him about any problems with the club to try and put him off buying it. Wasn't the club up for sale unofficially regardless? I'm pretty sure there were a few others who had a look at the books and decided against buying. If Hall and Shepherd didn't want to sell the club, Ashley could never have bought it. The club spent £6 Million (I believe it was iirc) in the financial year previous to Ashley buying it in activities related to trying to sell it. Dividends were drying up/had dried up, they wanted out. Hall did, Shepherd didn't IIRC Link to post Share on other sites More sharing options...
Unbelievable Posted January 15, 2014 Share Posted January 15, 2014 Have always wondered about the wisdom of using player amortisation to indicate the financial health of a club when what people really want to see is the actual profit/loss. I don't really have any knowledge or a view on this, but why is player amortisation such a bad thing to include? If you spend loads of money on an asset that quickly becomes worthless, that's bad right? If Mike Ashley could have easily refinanced the debt at favourable terms, why didn't he? It just seems really arbitrary to me, forgotten how it works exactly but you'll have a player in the squad who was brought through the youth system who is worth millions but not in the eyes of the books or a £10m purchase that loses £2m value every 2 years over the course of their 5-year contract. Someone remind me exactly how it works and I'll remember why I disagree with it. I think that's exactly it. The accountancy valuation has not bearing in real (football) life terms, other than to write off a percentage of the original purchase price year on year until the asset has no value left. Messi would be worth 0 on Barcelona's accounts. Link to post Share on other sites More sharing options...
madras Posted January 15, 2014 Share Posted January 15, 2014 the swiss ramble gives a decent breakdown so if you want to take out the amortisation you can. http://swissramble.blogspot.co.uk/2012/03/newcastle-united-life-in-northern-town.html. only goes upto 2011 though. Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted January 15, 2014 Share Posted January 15, 2014 If you spend loads of money on an asset that quickly becomes worthless, that's bad right? FWIW it doesn't seem like anything as subjective as this (i.e. related to football performance/reality) is considered, it's just a figure based on cost that decreases through the course of the contract, whether relevant or not, as if the player's a piece of equipment that cannot actually increase in value (IIRC). Yeah I see, in a way I guess it's a sensible way to account for player value, as it's a conservative/worst case scenario. It would be incredibly difficult and subjective to try to assess the actual current value of a player for each tax year, and a serious injury etc could reduce the value instantly. At least this way the paper value of the player is accounted for, even if it's rough. Link to post Share on other sites More sharing options...
Interpolic Posted January 15, 2014 Share Posted January 15, 2014 If you spend loads of money on an asset that quickly becomes worthless, that's bad right? FWIW it doesn't seem like anything as subjective as this (i.e. related to football performance/reality) is considered, it's just a figure based on cost that decreases through the course of the contract, whether relevant or not, as if the player's a piece of equipment that cannot actually increase in value (IIRC). Yeah I see, in a way I guess it's a sensible way to account for player value, as it's a conservative/worst case scenario. It would be incredibly difficult and subjective to try to assess the actual current value of a player for each tax year, and a serious injury etc could reduce the value instantly. At least this way the paper value of the player is accounted for, even if it's rough. It doesn't really do that though, someone like Giggs or Messi will be valued at nowt when they could have fetched millions. Link to post Share on other sites More sharing options...
madras Posted January 15, 2014 Share Posted January 15, 2014 however, the loans he put in, some 140million worth were based on real debt at the bank, not accounting practises. Link to post Share on other sites More sharing options...
Kanj Posted January 15, 2014 Share Posted January 15, 2014 Player amortization is f***ing idiotic imo. "Market value" should dictate that for players - just like in real estate the usage of cap-rates or multiples assist in valuing properties. Link to post Share on other sites More sharing options...
TRon Posted January 15, 2014 Share Posted January 15, 2014 If he had not tried to buy the club on the sly I am sure, even from his sick bed, Shepherd would have been only too happy to tell him about any problems with the club to try and put him off buying it. Wasn't the club up for sale unofficially regardless? I'm pretty sure there were a few others who had a look at the books and decided against buying. If Hall and Shepherd didn't want to sell the club, Ashley could never have bought it. The club spent £6 Million (I believe it was iirc) in the financial year previous to Ashley buying it in activities related to trying to sell it. Dividends were drying up/had dried up, they wanted out. Hall did, Shepherd didn't IIRC What difference does it make? He still sold at the end of the day. Link to post Share on other sites More sharing options...
r0cafella Posted January 15, 2014 Share Posted January 15, 2014 however, the loans he put in, some 140million worth were based on real debt at the bank, not accounting practises. To save himself paying interest to a bank to be fair. had he done due diligence he would have discovered this. Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted January 15, 2014 Share Posted January 15, 2014 If you spend loads of money on an asset that quickly becomes worthless, that's bad right? FWIW it doesn't seem like anything as subjective as this (i.e. related to football performance/reality) is considered, it's just a figure based on cost that decreases through the course of the contract, whether relevant or not, as if the player's a piece of equipment that cannot actually increase in value (IIRC). Yeah I see, in a way I guess it's a sensible way to account for player value, as it's a conservative/worst case scenario. It would be incredibly difficult and subjective to try to assess the actual current value of a player for each tax year, and a serious injury etc could reduce the value instantly. At least this way the paper value of the player is accounted for, even if it's rough. It doesn't really do that though, someone like Giggs or Messi will be valued at nowt when they could have fetched millions. True, but what I mean is, the worst case scenario (i.e. Giggs getting killed in a car crash tomorrow) is catered for. Any fee raised for him is a bonus. Link to post Share on other sites More sharing options...
HawK Posted January 15, 2014 Share Posted January 15, 2014 however, the loans he put in, some 140million worth were based on real debt at the bank, not accounting practises. To save himself paying interest to a bank to be fair. had he done due diligence he would have discovered this. The majority of the debt is caused by Ashley's acquisition in the first place - Stadium loan. Link to post Share on other sites More sharing options...
Unbelievable Posted January 15, 2014 Share Posted January 15, 2014 If he had not tried to buy the club on the sly I am sure, even from his sick bed, Shepherd would have been only too happy to tell him about any problems with the club to try and put him off buying it. Wasn't the club up for sale unofficially regardless? I'm pretty sure there were a few others who had a look at the books and decided against buying. If Hall and Shepherd didn't want to sell the club, Ashley could never have bought it. The club spent £6 Million (I believe it was iirc) in the financial year previous to Ashley buying it in activities related to trying to sell it. Dividends were drying up/had dried up, they wanted out. Hall did, Shepherd didn't IIRC What difference does it make? He still sold at the end of the day. As a minority shareholder he had no choice once Ashley acquired a certain percentage if memory serves. He certainly didn't want to sell to Ashley. Link to post Share on other sites More sharing options...
jdckelly Posted January 15, 2014 Share Posted January 15, 2014 Player amortization is f***ing idiotic imo. "Market value" should dictate that for players - just like in real estate the usage of cap-rates or multiples assist in valuing properties. I'm no accountant but isn't amortization basically a way to put the cost of buying a player over a period of time on the accounts, ie have £4m loss per season on a player over 5 years compared to £20m all at once? So basically it is based on market value but the market value you bought him for Link to post Share on other sites More sharing options...
AyeDubbleYoo Posted January 15, 2014 Share Posted January 15, 2014 Player amortization is f***ing idiotic imo. "Market value" should dictate that for players - just like in real estate the usage of cap-rates or multiples assist in valuing properties. I'm no accountant but isn't amortization basically a way to put the cost of buying a player over a period of time on the accounts, ie have £4m loss per season on a player over 5 years compared to £20m all at once? So basically it is based on market value but the market value you bought him for I think so, yep. Obviously it's slightly less accurate in the case of players as they don't always depreciate and can actually be 'worth' more than their book value. The opposite is also true of course, which is why a purchase price based system is probably the best option available. Link to post Share on other sites More sharing options...
Mattoon Posted January 15, 2014 Share Posted January 15, 2014 Player amortization is f***ing idiotic imo. "Market value" should dictate that for players - just like in real estate the usage of cap-rates or multiples assist in valuing properties. I'm no accountant but isn't amortization basically a way to put the cost of buying a player over a period of time on the accounts, ie have £4m loss per season on a player over 5 years compared to £20m all at once? So basically it is based on market value but the market value you bought him for I think so, yep. Obviously it's slightly less accurate in the case of players as they don't always depreciate and can actually be 'worth' more than their book value. The opposite is also true of course, which is why a purchase price based system is probably the best option available. See Albert Luque Link to post Share on other sites More sharing options...
Dokko Posted January 15, 2014 Share Posted January 15, 2014 Basically safe with nothing to play for...perfect time to sell all your star players. Ride it out till the summer and sign all the frees, pay off £20-30m owed to him. Link to post Share on other sites More sharing options...
TRon Posted January 15, 2014 Share Posted January 15, 2014 If he had not tried to buy the club on the sly I am sure, even from his sick bed, Shepherd would have been only too happy to tell him about any problems with the club to try and put him off buying it. Wasn't the club up for sale unofficially regardless? I'm pretty sure there were a few others who had a look at the books and decided against buying. If Hall and Shepherd didn't want to sell the club, Ashley could never have bought it. The club spent £6 Million (I believe it was iirc) in the financial year previous to Ashley buying it in activities related to trying to sell it. Dividends were drying up/had dried up, they wanted out. Hall did, Shepherd didn't IIRC What difference does it make? He still sold at the end of the day. As a minority shareholder he had no choice once Ashley acquired a certain percentage if memory serves. He certainly didn't want to sell to Ashley. Well we don't really know that do we, although he certainly publicly gave the impression he didn't want to sell. He certainly knew that other interested parties had looked over the books with a view to buying the club so it's not like he can claim to have not been a party to the club being sold. Link to post Share on other sites More sharing options...
Toonpack Posted January 16, 2014 Share Posted January 16, 2014 If he had not tried to buy the club on the sly I am sure, even from his sick bed, Shepherd would have been only too happy to tell him about any problems with the club to try and put him off buying it. Wasn't the club up for sale unofficially regardless? I'm pretty sure there were a few others who had a look at the books and decided against buying. If Hall and Shepherd didn't want to sell the club, Ashley could never have bought it. The club spent £6 Million (I believe it was iirc) in the financial year previous to Ashley buying it in activities related to trying to sell it. Dividends were drying up/had dried up, they wanted out. Hall did, Shepherd didn't IIRC What difference does it make? He still sold at the end of the day. If anyone believes Shepherd didn't want out, they're mad IMO, he was the Chairman/CEO of a company that had spent £6Mill trying to find a buyer, so he must have sanctioned that spend, and yet we're supposed to think he didn't want to sell ! It just doesn't stack up. He played his sickbed attempt to leverage some more cash, into a "I never wanted to sell" story for the "Geordie nation's" consumption to near perfection. Link to post Share on other sites More sharing options...
Guest neesy111 Posted January 16, 2014 Share Posted January 16, 2014 If he had not tried to buy the club on the sly I am sure, even from his sick bed, Shepherd would have been only too happy to tell him about any problems with the club to try and put him off buying it. Wasn't the club up for sale unofficially regardless? I'm pretty sure there were a few others who had a look at the books and decided against buying. If Hall and Shepherd didn't want to sell the club, Ashley could never have bought it. The club spent £6 Million (I believe it was iirc) in the financial year previous to Ashley buying it in activities related to trying to sell it. Dividends were drying up/had dried up, they wanted out. Hall did, Shepherd didn't IIRC What difference does it make? He still sold at the end of the day. As a minority shareholder he had no choice once Ashley acquired a certain percentage if memory serves. He certainly didn't want to sell to Ashley. Well we don't really know that do we, although he certainly publicly gave the impression he didn't want to sell. He certainly knew that other interested parties had looked over the books with a view to buying the club so it's not like he can claim to have not been a party to the club being sold. He was unhappy to sell as he wanted to buy the club outright at somepoint. Link to post Share on other sites More sharing options...
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